The TSX Composite / S&P 500 Ratio
Note from dshort: After posting the second and third charts below earlier today, regular contributor Serge Perreault, a Chartered Professional Accountant and market technician in Canada, sent me a fascinating chart of the TSX / S&P 500 ratio.
|Relative to the S&P 500, this 3 year weekly chart shows that the TSX is in a downtrend formation, on falling momentum. What this means is that "smart money" gets out of more risky markets (such as the TSX which is heavy in Materials related stocks) before getting out of the less risky ones (such as the S&P 500). But, take note too that the reverse is also true ("smart money" gets in more risky markets first).|
Here was the earlier post that prompted Serge's email.
Note from dshort: In response to an email from Dana in Canada, here's a quick look at Canada's S&P/TSX Composite Index and how it stacks up in recent years against the indexes in my weekly world markets update.
The first chart below shows the behavior of Canada's S&P/TSX Composite Index since the turn of the century.
How does this index compare with the eight world markets in my weekly updates? The chart below has the latest "gang of eight" update, through Friday's close, with the TSX added (the bold red line).
Since the arbitrary start date of March 9 2009, which was a trough for several world indexes (including the TSX, Canada's benchmark index is now positioned at the middle of the pack.