There is no triangle in the TSX. In fact there is a clearly impulsive first wave down, about 1600 points, followed by a clear A-B-C counter trend correction of roughly 1000 points. For the connoisseur it is a beautiful Fibo ratio. C is close to being equal to A, just a little more. The structure is perfectly clear. The RSI will soon be over 70%. This thing could turn down in a third wave any moment now.

Looking at the TSE it looks to me that we have done a B with from the lows of March 2009. The trend-lines etc.etc. all seem to support that notion very well. However it still could be possible that we need to go one higher. Personally my (subjective) take on the matter is that we go down NOW, but EW does not definitively support that as, as al ways, there is a lot of ambiguity. Looking at the chart on the right it is clear that the B wave COULD be incomplete. Both patterns in the circles could be A-B-Cs with the C being a diagonal as shown below on the left;

If this one applies we should go one higher even if the ultimate outlook does not change. If the one on the right, starting with a series of 1-2s , applies we are on the verge of dropping into a 3d wave and things will accelerate rapidly. Take your pick but I would go for the bear case when taking into account all other considerations, such as fundamentals, valuations, sentiment etc.etc.

Note that diagonals do not contain 5 wave legs (unless it is a type 2 pattern which arguable does not exist either) and consequently the count on the left is rather dubious. Also if we do go one higher both patterns within the circles would be similar and consequently there would be no alternation.

Just a quick update on the TSE . The retracement of wave 1 or A down could be over here (at wave 4) but it can just as easily continue to about the 62% level or higher. Then , as a minimum, we should get a second 5 wave move down. This could take us to the 12650 level or farther down, depending on it being either a 3 or C (the former typically can go a lot deeper).

So the TSE did its usual 1000 points and appears to have done so in a clean 5-waves. A pretty good correction should follow to ,perhaps 13750 or so. This may take longer than shown in the above chart. After that at least one other leg down should follow. 12750 or so would be a reasonable target.