By Shawn Langlois, MarketWatch
According to recent Google search data, more Americans than ever before appear to be, at the very least, concerned enough about the political landscape to contemplate a move north of the border.
While they’re at it, they might want to consider hitching their investment dollars to Canada as well, according to J.C. Parets of the All Star Charts blog . But his case for buying the TSE Composite Index /zigman2/quotes/210598478/delayed CA:GSPTSE -2.75% and shorting the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.72% has nothing to do with whether Donald Trump, Hillary Clinton or anybody else takes the White House. It’s purely technical.
“I treat Canada and the U.S. the same way as I would treat Indonesia, China, Peru, soybeans, cocoa, Japanese 10-year yields or Aussie dollars,” he wrote. “It’s just letters and math to me, so I don’t care if Apple /zigman2/quotes/202934861/composite AAPL -1.51% doubles in price or goes to zero. The implications of market moves are nothing I can control or worry about. I’m just here to try and profit form the changes in price.”
In that spirit, he’s been keeping an eye on this chart since January and likes what he sees from an investment perspective. Basically, it’s a look at a potential shift in the trend of the U.S. market trouncing Canadian stocks in recent years:
“I still believe that the failed breakdown earlier this year will be the catalyst to continue to take this higher toward the upper of these two parallel trendlines,” he said. “It looks like we’re heading back above 7 [in the ratio between the TSE Composite and the S&P], where I would take tactical profits and re-evaluate.”
In fact, a “monster breakout” could be in the offing, he predicted.
“I would continue to buy Canada and short America with equal nominal amounts,” Parets wrote. “As long as we’re above the lower of these two converging trendlines, I want in!”
Here’s a zoomed-in look at the same chart: