TSX Index in a consolidation range
The following are the key points from the above chart analysis:
- The near-term trend is sideways.
- Trading in a consolidation range.
- Support is 12,000.
- Resistance is 12,500.
- Reference the Oct 3 post regarding major support of 11,000.
- I explained the double top reversal pattern in the June 18 post.
- Another post explaining the double top reversal pattern on May 6.
- The April 24 post warned of the double top.
- The possibility of a double top was raised in the April 14 post.
What is a reasonable trading strategy at this point in the market?
The TSX Index is trading in a near-term consolidation range as indicated on the chart. A neutral trading strategy with an above average cash position would be appropriate. A confirmed break (+2% for two days) above the 12,500 resistance level would be a reason to add cautiously to long positions. A confirmed break below support of 12,000 would be a reason to liquidate longs.
Past posts for the TSX Index provide continuity in the analysis:
Reference the last chart analysis dated Nov 4 for the TSX Index. This chart identified the harami cross candlestick pattern with a tweezers top. You can also review the TSX Index Category for a sequential listing of charts.
The following current articles are picks from the web:
Financial Post article dated Nov 12, 2011: Does anyone really want us to be financially savvy?
Financial Post article dated Nov 11, 2011: Mr. Market’s mood is picking up
Financial Post article dated Nov 11, 2011: Ride volatility with managed futures
Financial Post article dated Nov17, 2011: Run from debt to cash sparks sell off
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