A major sell off is underway on over-inflated global commodities and stocks that were looking for any excuse to trade lower from liquidity induced mania over the past several months. A good excuse arrived in the form of weak global economic data over the past few weeks. But the inevitable contagion amongst risk markets is predictable thanks to a dominance of over-levered “players” who are being forced to liquidate assets in bulk in order to meet margin calls across the world. The Canadian market is being hit particularly hard of course, thanks to our rocks and trees focus; but Canadian financials–the last leg of support the past few months–is also faltering. The effect is that the Canadian market has now broken its Q’Eternity support as shown here below. The 11,000 range becomes the next test area for potential support.
Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.
Cory’s Chart Corner
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