TSX, Low-Momentum Market, FLAG-FORMATION Sets Up A HUGE PLUNGE!

Hello There!

Welcome to my new analysis about the TSX CANADIAN STOCK MARKET INDEX on the 2-day timeframe perspectives. When approaching this stock market index it is necessary to view the prevailing sector stocks market situations firstly, in the recent times a precarious devaluing in the Canadian Dollar CAD has taken place, this has shown up within the Canadian Dollar Currency Index CXY as well as the fact that the Canadian central bank is continuing with aggressive rate hikes to tackle a wildfire inflation. These factors are already setting the Canadian stock market and related business landscape into disposition and therefore give a indication of a likely drop in the price-action to come around within the index prices. If the Canadian central-bank should move on with further overarching rate hikes in the next times this dynamic will be accelerated and a drop in the currency index will follow along with a drop in the stocks index.

Now, considering the technicals marked in my chart the TSX is building this gigantic flag-formation, such a flag-formation is always a serious flag-formation that should not be underestimated especially when it has a low-volatility-cycle edge to it as it is the case here. Such low volatility is in a vast majority of 90% of cases a main indication that a high-volatility drop in the price-action is likely to follow up as the price-action shows no ability to continue with a high-volatility trend in which the price-action forms consecutive heights. Within this bear-flag the TSX is forming this coherent wave-count which is moving directly into the upper resistances from where a pullback is highly likely and once this pullback reached out the lower-boundary the TSX will continue with the wave C and a simultaneous drop to reach out to the marked target-zones.

Summarizing all the given indications here a broader bearish big picture can be seen for the TSX index and if there is no change in the high consumer price index CPI and a foreseeable reversal of aggressive rate hikes even when the inflation calms down this will penetrate also into the real TSX index price-action and the price is ready for a huge plunge. With sight on the TSX index it has to be said that this is a local consideration because when approaching the whole stock market there are indeed mixed signs with other indices showing other signs. Especially when this index turns it can lead to movements into the other direction with other sectors and indices. Considering the price-targets it will be crucial how the index is going to approach the final target-zones and if a reversal can set-up there or a continuation is likely to extend.

Thank you everybody for watching. It will be great when you support my idea and we move on forward together.

VP

Comment:

ANALYSIS UPDATE: The TSX is approaching the final bear-flag breakout-zone.

The completion of the formation is nearing.

Comment:

MACRO UPDATE: Continued inflationary pressure is likely to accelerate a bearish market sentiment.

A shrinking in the CXY is going to lead to a shrinking in the TSX as well.

Comment:

ANALYSIS UPDATE: The TSX continued to pullback bearishly within the main resistance-clusters to finalize the bear-flag with the breakouts below the lower boundary.

The TSXY is now setting up further continuation determinations likely to accelerate within the upcoming times.