TD.TO Monthly

A good proxy for the housing bubble in Canada is the banking bubble. All of the money is going into bank stocks and mortgages.

Equity in homes is then used for investment. Mostly what concerns Canadian investors is the oil & gas sectors. But you can bet that anyone with equity in their homes and looking to invest would be dedicating their attention to bank stocks.

If you switch from monthly to weekly, then the RSI and CCI are very strongly matched with a top. A top is denoted in every technical indicator.

So if a bear market ensues in housing and banking, then there is little or no leverage for investment purposes.

Gold miners have been successful at resting on the laurels of mining the markets, rather than controlling grades, so should a bear market ensue, they are going to have to meet with different expectations than solely gains on alpha, which was the first part of the bull market in gold.

The banks have also been overwhelmingly short gold miners through equity swaps.

Notable to the discussion is how the bull market in TD.TO is depicted in the ADX, where that last leg which was just completed, shows an almost complete deterioration of momentum.

I find it passing strange that Canadian banks are not engaged in bullion, while in German politics, repatriation of gold has been met with Federal Reserve stonewalling and regulatory constraints on gold price fixing in that country.

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-F6