TSX - March 25, 2009

charts courtesy of stockcharts.com

Whatever it was that caused the mad late afternoon dash on the US market did not cross the border into Canada

Since the last time we reviewed TSX, index has done quite alright.

But notice that the massive outperformance of TSX against S&P 500 has plateaued. It may resume, but for now, it has falttened. Also notice that the past few days, we have had some above average red volume bars.

Breadth has improved a lot since March lows.

There really isn’t much to complain about, only that we may have seen the best and most, if not all, of this leg of the rally.

This 60-minute chart of the index shows some signs of fatigue

Still, the short-term series of higher lows and higher highs is intact, but as long as the signs of short term weakness persist, I would be reluctant to establish a new long position.

The index has done really well. It also behaved very well into the March lows. The first rally has so far been clean and impulsive.

I need to see how it pulls back. As long as it does not collapse, and as long as index internals do not deteriorate badly, I will treat a pullback as an opportunity to establish new long positions.

My cut off point will be below the March lows.