Cejay Kim of Palisade Research - Thu, Jan 21, 2016

TSX Venture Bear Market Update - Now At 1,200 Days And Counting

Bear Market pic

1,200 days and counting and the greatest loss in the TSX Venture's 25 year history.

TSX Venture 1990 - present, bear and bull markets

For those who follow this chart, we have extended the time frame to now include the defunct Vancouver Stock Exchange (VSE), a bourse that catered and serviced the junior mining frenzy during the early 90s. We also classified a bear market as a loss of 20% or greater over a period of least two months.

Brief History Lesson Of Canada's Venture Exchanges

In 1999, the Vancouver Stock Exchange merged with the Alberta Stock Exchange and the Winnipeg Stock Exchange, along with the micro-cap stocks from the Bourse de Montréal to create the Canadian Venture Exchange (CDNX), an exchange for emerging companies too small to make it to the big boards.

In 2001, the Canadian Venture Exchange was acquired by the TMX Group, owners of the Toronto Stock Exchange, and rebranded to the TSX Venture Exchange.

With the data of each exchange in hand, we were able to normalize the indices to produce one index to rule them all.

TSXV normalised performance

The key takeaway is that the Index has never been this low.

But how much longer can this go on for?

We do not know for sure, but 2016 and onward look to be filled with economic uncertainty and volatility, both ingredients to fuel a comeback in gold. Let's see what's on the docket:

  • Oil's demise - Even with continual Middle Eastern instability
  • Student debt crisis - Now at $1.3 trillion
  • Growing sub-prime auto loans - 40% of all auto loans are now subprime
  • Technology bubble - Over the top valuations, capital drying up
  • Leveraged ETFs and its ability to exaggerate financial volatility

Gold will always remain a safe haven and all charts and signs point to recovery. Here's to a bull run in 2016!

On another note, we are happy to announce our successful rebrand to Palisade Global Investments, please check out our new site: www.palisadeglobal.com.

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