Globe editors have posted this research report with permission of Phases & Cycles Inc. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:
The Toronto market is on a knife-edge. The 12,975-13,000 level was the important breakout point for the major Leg 3 advance that took the S&P/TSX composite index to its all-time high of 15,685 in late-2014. For the past two months Toronto has tried to make a stand near these levels and it is essential that this area is defended. Unfortunately for the bulls, every rally attempt is being met with further selling pressure, no sectors have yet emerged to act as leaders for a sustained advance, and any further weakness in New York will drag Toronto down further.
At the same time, there are signs that Toronto's internal strength is improving and this may help reverse the downtrend. But any sustained action below the 12,705 low of late-August would be very bearish.
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