When the noise factor is high, which is it now, once needs to step one time frame back from the noise and attempt to evaluate the trend. On the weekly charts, the TSX at best is in a range over the past year and if we draw the line back two years we are not meaningfully above where the markets were back then. In large part, what the TSX does has little to do with the Canadian economy and everything to do with the Chinese and emerging market economy demand for “stuff” that comes out of the ground. While Canada has lots of “stuff” our stock market is made up of 50% stuff. The 30% that are financial services and REITs are subject to the global systemic risks that are everywhere. The global backdrop for the next few quarters remains unclear, but government support via extraordinary debt monetization ought to provide support. But the central bank cannons and bazookas have been fired and if they do not work as Japan has experienced, then what. So yeah, the markets are likely to be very noisy for the foreseeable future.
