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Nexvu on Economics, Politics and the Markets

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Commodities and the TSX Exchange

Posted by nexvucapital on November 24, 2012

While browsing through charts this morning I came across a correlation that we all know about but I thought I would mention it anyway. I have charted the CRB and the TSX60 (Canadian Exchange) as represented by the XIU.TO which is the ETF for the sixty largest Canadian companies. What is interesting is the placements of the shoulders in the 2012 reverse head and shoulder chart patterns (S,H,S). The left shoulder on the TSX60 went far lower during the correction in Q4 2011 versus the CRB. But, interestingly the right shoulder on the TSX60 held up better than the CRB in the recent sell-off. This may be an indication that the commodity shares are getting set to outpace the performance of the underlying commodities in this next run versus a depreciating US Dollar. For the newbies commodities store value and hold that value against a depreciating US Dollar. Oh and the US Dollar is being depreciated.

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