S&P/TSX Composite Index

I'm not sure what is going on but I'm making a little money on my index funds these days. Up a couple of percent since April 20th. That beats the heck out of safe havens like GICs.

The TSX both comp and venture appear to be on jet fuel lately. I really don't care why...oil, banks, whatever. Maybe it's just month end buying by mutual fund managers or pension fund managers. I guess they have routines like all of us.

Those guys, the one's receiving all the savings from the "soon to be retired baby-boomers" have a lot of money to place somewhere. For one reason or the other additional money is going into the markets. It all works for me.

TSX Comp link
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=CA%3A89199000&sid=46938&o_symb=CA%3A89199000&freq=1&time=7

Update: I heard later in the day that a run on Alcan was responsible for the increase in the TSX Comp today (Monday). However, Alcan does not explain what happened to the index prior to today.

The chart for Alcan is interesting. (Link below)

I will not be betting any money on this prediction... but the Alcan chart strongly suggests a further price increase. The volume is decreasing as the price moves sideways near $90.00. Once the shares available for sale near $90 are sold any motivated buyers will have no choice but to pay a higher prices. There may also be some buy stop orders sitting just above this sideways price, aimed at riding the next wave upward. This could cause further gap ups. It will be interesting to watch.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ca%3Aal&sid=0&o_symb=ca%3Aal&freq=7&time=3

S&P/TSX Composite Index Will Come Back

The last few trading days have seen a significant short-term drop in the index. We have seen a total drop of about 700 point so far. This makes for a lot of nervous investors.

A David Berman March 6th article in the Financial Post reported… “The S&P/TSX composite index will be re-balanced in March — probably on or before the 14th”. It sounds like re-balancing is done every three months. Some stocks may be added and some may be removed. We can count on any “loser stocks” being thrown out to protect the index.

We can’t predict how low the index will go at this point but we can be very certain of one thing. No matter how low it goes, the S&P/TSX composite index will eventually rise back above the February 27th peak of 13433.

The high degree of certainty that the index will recover makes an index mutual fund attractive.