INK Canadian Insider Index Freefalls 3.1%

Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. Last week, the INK Canadian Insider Index resumed its rapid downhill sleigh ride. The Index opened lower last week and after being unable to break above 1050, continued to head down, influenced by world market weakness and tax loss selling (which ends December 27th for Canadian stocks). The Index tumbled 32.71 points for a 3.1% loss.

MACD plunged 2.2 points to -2.8. RSI lost 5.29 points to slip to 28.2

Support is now at 1000 and 1015. These levels occupy an area where the Index ran up into, based for a month and then broke out to much higher levels back in June 2016. Resistance is now at 1040 and 1060.

The INK Canadian Insider Index looks to be in the throes of a final capitulation-type move that has been more in lockstep with the US markets than commodities (such as copper +0.11% or silver -0.4% over the last week) or large cap gold mining stocks which have been outperformers. So long as copper, the metal I see as key to all markets, continues to hold the uptrend it began in 2016, I see this INK CIN correction as temporary.

In fact, within the next 7-10 days, markets will reach one of the best risk-reward scenarios investors will see all year. For instance, over the past 15 years the S&P/TSX Venture Index has rallied every year from about the 22nd of December (give or take a day or two). Interestingly, on Friday it fell a mere 0.28% versus the S&P 500 which was down 1.85%. That made it the second Friday in a row Venture stocks outperformed the US markets. In fact, over the past two Friday sessions combined, the S&P 500 lost 5.44% while the S&P/TSX Venture Index showed a net gain of 0.82%.