Canada’s TSX 60 Index threatens to complete a large head and shoulders reversal with a break below support at 640. The first shoulder is in April 2010 and the second in March 2012. The recent iceberg on 63-day Twiggs Momentum warns of a primary down-trend. Failure of support would offer an immediate target of 560* and a long-term target of 460*.
* Target calculation: 640 – ( 720 – 640 ) = 560; 640 – ( 820 – 640 ) = 460
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
An iceberg is where the peak is just above the zero line, with at least 90% of the formation below the waterline — as with an iceberg at sea.