I have always had a real problem with developing a wave count for the Canadian stock exchange. This wave count is no different and chances are good I will have to rework it many times. The ETF to the TSE is far worse as this bullish phase developed sideways. Since Canada is commodities oriented, I may have to apply the big diagonal wave count. I would need a much bigger historical database, which I haven’t found at this time. I have no Gold/TSE ratio database as I would have to start one from scratch. Today this ratio is a bit below 11.8:1 which means it takes 11.8 gold ounces to buy just one unit of the TSE.
This makes it one of the most expensive indices I follow. We also have a big wedge that should slice the bottom trend line in due time. Eventually, the TSE could fall to the 2011 lows but an intervening counter rally should start well before that price level. The 2016 low might be a better price target for another “A” wave bottom in Primary degree, which may still take until 2019 to complete.
When I looked at this chart I instantly noticed the exact same pattern in this TSE chart during the 2015 crash as the SP500 -8-9 months. The only difference is this move did not expand higher, but otherwise, it is the exact same wave pattern we have been getting since the January 2018 peak. These are ugly patterns, but sure have characteristics of the commodities diagonal wave structure I use.
After the January 2018 peak, another expanded pattern developed, and still, the outcome will be the same. In the long run, the bottom trend line may not hold but at this time it is a bit early to speculate about it.
Canada is in serious trouble as our Fed is determined to crash the markets with their stupid outlook about inflation. The Bank Of Canada rate increase may not sound like much but what rate increases do is drain the liquidity from the economy. Very few people will have an appetite to borrow money for an overpriced home or condo. The bull market is over folks, as the anticipated bear market is going to last much longer, and fall much deeper than we can all imagine at this time.
The bears are slowly taking over in Canada as it is getting more and more difficult to keep painting Canada’s outlook with a rosy brush, at least in the short term. Since the 2009 bottom the TSX produces a diagonal 5th wave as well, which just about looks like the diagonal came off of the EWP book. I labeled it the lazy way this time, but it’s a diagonal that already has finished. I don’t think Canada is going to be insulated from world turmoil as it could get hurt the most if we can’t get pipelines to ship our crude oil out. Even the Permian has bottle necks with not enough pipelines sending crude oil out of the US Permian region.
Either way, no matter what, all trends must come to an end, busting the myth that stocks will stay permanently high! The majority of stock investors believe there should be no volatility in the markets with no crashes so when markets do crash, investors blame everyone else except themselves for buying in at extreme tops. They will find the evil culprit or a company that will bring the TSX down, if not they will make some shit up or create a “consensus opinion”.
I think this TSX has to crash below 11,000 which will produce a big support base at the same time. That price range should not hold as the previous 4th wave low is still closer to the 8,000 price level. If I painted for readers a bullish picture with SC or GSC numbers and letters, then I/m in the same bull trap as the investors presently are. That is unacceptable to me as mainstream media will not call a bull market top in fear of being mocked. Since 2000 this will be my third bear market that I’m counting down, but even that is not good enough if we haven’t learned anything from the two other bear markets!
I have covered some of the biggest markets in the world, looking for those mythical Cycle degree wave 3 tops I keep talking about. It is impossible for me to track them with the detail required to confirm any move and no one has stepped forward that wants to count down a Cycle degree bear market in any market I cover.
Elliott Wave 5.0 is all about locating all 5 waves in Cycle degree which must be found before we can ever enter any part of the SC degree world. Stepping from Cycle degree sequence into the SC degree world, is like stepping through a Stargate so we want to be extra careful to make sure we have the right combination of numbers and letters to let us through. You need to have the right passcode to let you join the SC degree world.
This TSX chart represents our main Canadian stock index. In the last few weeks and filled with bullish fundamental news flashes, this market has gone virtually nowhere, struggling trying to go higher. The bull market since the 2009 bottom can’t work as an impulse, but fits the pattern of a diagonal 5th wave pretty well.
Wave 4 crashed well into the previous wave 2 position, which has come close to its maximum retracement level. I haven’t developed good large degree wave positions this time, as the 2009-2018 bullish phase could be a “B” wave triangle top! That could only happen if the 2007 peak was an expanded pattern. The TSX contains a wide spectrum of different sectors, so it’s wave count is going to be elusive.
Our main index is not going to go through a USA stock bear market, where we can expect our stock market to not be influenced by what is happening south of the border. TSX 11,000 and 7500, are going to be two major support levels that could get retraced, but just getting past the 11,000 price level will be an achievement.
It’s not my top priority to keep detailed wave counts of our TSX index, but I will try and catch some of the bigger degree turns.