In EW terms we now have overlap which means that this 3-wave counter-trend move up ( a correction in a bear market) can no longer morph into a 5-wave move. It could still become a more complex correction but given that it had already retraced 76% or so, this is highly unlikely. The HXD (inverse and leveraged 2 to 1) displays a very nice wedge c-wave and the RSI and MACD do NOT make new extremes.  On the basis of this evidence one cannot come to any other conclusion than that the long awaited bear market has, in fact, started. At least here in Toronto. Time will tell.

The TSX is relatively simple in its structure. The high was in early September and the initial drop was a clear 5-wave move. 5-wave moves never stand alone, there is either something in front of it (not in this case) or it will be followed by another 5-wave move in the same direction. Retracement of initial waves are usually quite large, almost equal to the initial move, so this may have a way to go yet. Even so retracements often stop near the 62% level, or near the 4th wave of 3 of the initial move, in this case just under the 15000 level. We are close, time will tell.

Our favourite HXD is, of course, doing the mirror opposite with leverage. The c of the a-b-c down appears to be forming a wedge. If correct it only needs one more little push down to complete. An excellent buy at these levels or slightly below.