The TSX-V continues to bounce after finding a low of some kind
Canada’s junior index, the TSX-V held above the SMA 200 before putting on the bounce that is in play into today. In NFTRH we speculated that the low could be put in above the March low of 541 as opposed to the April low of 562. That would provide a test of the SMA 200 and keep the higher lows progression in place (again, assuming the minor low in April was not the key low). As it is, TSX-V did hold that low after a brief dink below it.
If this is the next upturn in da ‘V’ then this speculative sign would be positive for many other asset markets in the short-term. The inspiration? A would-be Dovish Fed, Trumpism or just manic animal spirits. Whatever it is, it is not healthy from a risk standpoint * but it is going according to the 2024 plan.
* Although with the deeply oversold readings in some commodity areas, the risk/reward actually looks good. So it’s a bifurcated market to a degree. Big sexy headline indexes vs. the much wider and broader market.
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That Chinese stocks are shorted to a level from which they have always at least firmly bounced, doesn’t hurt either. Not sure it will last beyond the shorter term, though. When you move gradually from a higher inflation situation to a deflationary one, there is (almost by necessity) a transitioning phase in between where all seems to be working out (coined by Gary as Goldilocks). When the FED moves from tightening to easing, there is that transitioning phase in between where investors can easily be fooled into believing that things are looking up whilst often they’re not. Bart