The TSX 60 is testing support at 700. Respect would indicate an advance to the 2012 high of 725, but failure would warn of another test of primary support at 640. I do not place much faith in the broadening wedge formation: narrow wedges tend to behave like trend channels. Rising 63-day Twiggs Momentum suggests a primary up-trend but we need a trough above zero to strengthen the signal. And only breakout above 725 would confirm.
* Target calculation: 725 + ( 725 – 640 ) = 810
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.