Today after the close one of the indexes that has been such a strong performer due to the resource rich lands of Canada has finally weakened to the point that a sell signal has triggered. It’s been down 7/8 past sessions and slightly oversold, so I passed on opening a short position on EWC, but it’s something I’m going to consider if we get a light volume bounce. The high/low index (noted by the area behind the chart) has been very negative and is suggesting more downside action is coming.
Under normal conditions I would think this is a good buy signal with the current move below 40, but given the weakness in the US markets and everything else going on in the world, these aren’t normal conditions. A move below 30 would confirm the current sell signal and would be cause to “look out below”.
I’ll be watching the 60 min chart below for a move above 60 to look for an area to open that short position.
