The outlook last night for the Toronto Stock Exchange was for stocks to probably try a bounce after falling to the 14000 level for the second time and managing to hold the level. As well both stochastic indicators and the Ultimate Oscillator were signaling up for stocks at the close on Tuesday. Instead OPEC stepped in and announced a decline in oil demand for 2015 which pushed the price of oil to another new low. This time though with European stocks down, the Canadian dollar down and new worries that the decline in oil demand pointed to a global slowdown for 2015, investors sold stocks as heavily as they had on Monday but this time there was no afternoon recovery rally.
This leaves the TSX up just 230 points on the year with a decline of 12 percent from its high for the year. At one time Canada was leading the global stock markets but no longer.
Crude hit $63.56 its lowest level since July 2009 before closing at $64.24. US Crude is at a 5 and a half-year low at $60.94 at the close.
TSX Intraday Chart for Dec 10 2014
Investors are now worried that the TSX is entering not just a correction value but also a possible new bear market. Today’s action below shows how swiftly the 14000 level broke. Much of the early morning was spent with stocks trying to regain the 14000 level, but each push back was met with a wave of selling. Eventually the market gave up and fell lower. By 3:00 PM the market was below 13800. A weak late-day rally for the last hour pushed the market back to close at 13,852.95 but a lot of technical damage has been done.
TSX intraday Dec 10 2014
The rest of this TSX market direction outlook and trade ideas is for Canada Members.
TSX Market Direction Outlook for Dec 11 2014
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