Canada's main stock market, the Toronto Stock Exchange closed
lower on Tuesday as investors took profits after the index hit an
intraday 6-year high. Most sectors were lower, led down by Energy
and Metals and Mining but Health Care bucked the Trend.
ended the U.S. day session slightly higher, having hit a 10-week
high overnight on continuing safe-haven demand and technical buying
based on futures trading above key moving averages. But traders and
analysts surveyed by Bloomberg News reportedly aren't expecting the
euphoria to last. Bloomberg noted volatility in futures is near a
four-year low, at a time when trading volumes and open interest in
Comex contracts are waning.
Brent crude for August settlement rose 0.4% amid concerns about
violence in Iraq while West Texas Intermediate traded near US$106
in New York.
The technical picture for the TSX is not pretty. The TSX created
an outside day Tuesday. This occurs when the high is higher than
the prior day's high and the close is lower than the prior day's
The TSX has been printing an RSI (relative strength index)
reading above the overbought trigger level of 70 since June 12. The
RSI is moving lower along with price action which reflects
accelerating negative momentum, while printing at 70, which is
still in overbought territory.
Momentum on the TSX has turned negative with the short term MACD
(moving average convergence divergence) index has generated a sell
signal. This occurs when the spread (the 5-day moving average minus
the 13-day moving average) crosses below the 6-day moving average
of the spread.
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