On Monday we saw strong relative performance out of Canadian equities during the market sell-off that pushed U.S. stocks 2+% lower. This has pushed the ratio between the Canadian ETF ($EWC) and the S&P 500 ($SPX) up to resistance, making this the topic of my TraderPlanet article for this week.
Here’s a piece:
Looking at the relative performance chart of $EWC and $SPY, we can see that when the green line is falling, $SPY is rising more or falling less than $EWC. With Monday’s bullish relative move in $EWC we are now approaching the multi-month trend line since October of last year. We also have a bullish divergence in the Relative Strength Index (RSI), a momentum indicator. As the ratio between these two equity ETFs made lower lows, the RSI indicator began to make higher lows which is a positive sign for Canadian equities relative to U.S. equities.
Read the rest: Is Canada Ready To Rebound? (TraderPlanet)
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