TSX Tumbles to New Low....

For those of us who have been opening their monthly investment statements be prepared to see a new low for the month of February. As if, the bottom of November 20th wasn't bad enough for the TSX. Today, we have seen a new bottom of 7647.67 basis points. 

This new bottom does not bode well for gains in the future. According to Adrian Mastracci of KCM Wealth Management in Vancouver, 

      Right now, I think there is a higher probability that markets will go down further than there is of them climbing higher because we still do not have a handle on all the problems that are out there. Stocks are driven by two things; confidence and earnings, and we don't have either.

Until investor confidence is restored the volatile ups and downs of the market will linger. 

Check out the Financial Post for more information

As Equities Bottom, Commodities Peak....Or Not?

Historically, there is an inverse relationship between the two types of assets. As equities rise, commodities fall and vis a vis. However, in the current market situation we have seen abnormal trends begin to appear.

As the TSX began to fall from its peak in June 2008 the natural inverse relationship was present with oil spiking @ approx. $140US in July of 2008 but as the market bottomed on Nov. 20th, oil too dropped below $50US.

Why is this? What happened to the predictions made by CIBC World Markets Chief Economist, Jeff Rubin that oil was to continue upward to $200?

There are a myriad of factors that have contributed to the fall in the price of oil that create a more complex relationship. To find out more, I suggest looking at Why are Oil Prices so Low?

But if Oil is so low then why is GOLD nearing its peak of Mar.08? According to Colin Cieszynski, analyst at CMC Markets Canada, "This rally, combined with a retreat in other commodities...suggests that significant fear over the global economy continues to overhang many markets and that precious metals continue to act as a haven for capital" Gold Futures Poke through $1000US an ounce

The current economic situation is giving us the opportunity to re-write the history books. As the financial markets become increasingly complex with the creation of more sophisticated investment tools there is no longer a simple solution to trend analysis.