INK Canadian Insider Index loses 1.6%: will 1050 hold?

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Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. The INK Canadian Insider Index followed through on its late-week bounce from the prior week and soon ran 16 points to 1093.40 on Monday. However, with tax loss selling and wild volatility continuing in US markets, those early gains were short-lived and the Index sliced through all levels of support down to a new 2018 low at 1050.64, losing nearly 17 points or 1.6%.

MACD was largely unchanged, falling 0.02 to 0.61. RSI lost 4.5 points slipping to 28.33.

Support is now at 1030 (June low in 2016) and 1050 (major support May-June 2016). Resistance is now at 1065 and 1070.

The INK CIN has certainly had a tough ride along with other markets over recent weeks and is now back to its mid-summer 2016 trading levels. A positive takeaway from the past week includes the fact that with a 1.6% loss, it strongly outperformed US market indices like S&P 500 SPDR (SPY*US) last week which declined 4.4% including a 2.3% loss on Friday (versus 0.8% for the INK CIN).

What's more, 1050 holds potential to be a major support for the Index just as it did from mid-May to the end of June in 2016 (Though we note there was a brief two-day blip down to 1030 before returning to 1050.) Also, despite the major volatility we're seeing, copper's uptrend from 2016 has remained intact, and as I have noted many times, copper underpins the economy, commodities, and markets. For the week, copper was only down 1% and was quite notably in the black on Friday, with a gain of 0.6%. Gold was up 2% for the week and closed 0.7% higher on Friday. Large-cap miners that typically lead the performance of gold showed excellent relative strength. For instance, Agnico Eagle Mines (AEM) was up 3.59% on Friday and a surprising 13.7% on the week. Lastly, the heavily beaten down S&P/TSX Venture Index was also an outperformer and rose most unexpectedly 1.1% on Friday in the face of huge losses in US markets. All of the above provides seeds of optimism for investors, as does the fact we are rapidly approaching the end of tax loss selling (typically around mid-December), where investors buy shares 'on sale' for an upward ride into January.

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