Say Hello to revisiting the USA Style Crash of 2008, not in USA, but this time for Canada -- 4144 is critical crash level for DJ Wilshire Canada Index ( currently resting at: 4178.52 as of July 21st, 2015 close ) -- then when this level is breached, a sudden and persistent market with dramatic expression and follow-through ( based on DJ Wilshire Canada Market Index ) is imminent.
Banks like TD and RY in U.S.Dollar Terms are at risk for a 35% to 55% haircut or worse -- upside beta to downside beta is 2 to 1 -- so asymmetric beta orientation ( bias ) for market upcoming makes this a very dangerous tail-risk situation. Be on high alert and standby for future updates from RunningAlpha.com.
Given this unfolding situation in earnest, based on historical precedent, there is a good chance that to avert the full consequences of a pending recession of epic magnitude in Canada, the of Canada will likely continue lowering rates relative to the USA into late this year and early next year, and as such this can put tremendous pressure on the Canadian Currency. So even though can kick in over the short term before lower lows, it should be well contained to within the last area of resistance. So intermediate to long term risks remain very highly elevated in Canada for the foreseeable future.