INK Canadian Insider Index rises, follows commodity rebound

Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. Last week, the INK Canadian Insider Index continued the late week bounce from the week prior, adding 8.5 points last week to close at 1270.90 for a gain of 0.7%.

The INK CIN's Relative Strength Indicator continued its climb 6.5 points or 16.4% to close at 46.05, registering an impressive 31% increase over these last 2 weeks. The 'W' pattern in RSI did indeed follow the same bottoming pattern we saw in February and has now guided the Index higher as we speculated. The long-term momentum indicator, MACD, flipped back to positive, adding 5.6 points to 2.33. The fast and slow lines remain sub-zero and have yet to break out of their spiraling downtrend, something they'll need to do if the Index is to get back on track and rejoin the running of the bulls.

Support remains at 1250 and 1263. Resistance is at 1269 and 1282 (200-day moving average).

The INK Canadian Insider Index is now 40 points off its lows and momentum is showing rapid improvement. Most importantly, the Index seems to be following the rising footsteps of copper and other commodities (which have been shorted to tremendous extremes) as the US dollar has weakened and appears poised for a deeper correction. Indeed, the amount of potential short covering plus the sizeable quantity of speculative capital on the sidelines is precisely the recipe for a tremendous multi-week rally in the Index as well as commodities.