Can The TSX Breakout Tomorrow

The TSX is up approximately 10% this week as financials have rallied off of their lows as the major banks and brokerage firms in the US are indicating that they should have positive results for the first quarter of 2009.

Retail sales in the US were stronger than forecast and strength in crude oil has lead to higher prices for oil stocks. The next question for alot of investors is whether we have hit bottom?

Some investors swear by something called “Technical Analysis” where charts are looked at to determine whether to buy in or sell out of an underlying investment.

I took a look at a chart that shows the 50 day moving average of the TSX. Over the last 6 months, the TSX has briefly touched the average before heading lower. I have attached the chart that you can see by clicking here.

When the “Green Line” breaks above the “Blue Line” on the chart, the market is trading above the 50 day moving average.

Traders will be looking closely at the charts tomorrow as we are trading at the moving average now and a slight breakout to the upside could lead to alot more cash going into the market.

What are your thoughts? Did we hit the bottom of this market cycle? Your comments are greatly appreciated.

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