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BMO Nesbitt Burns
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Newmarket, ON
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Technical Perspective:
An analysis of market trends and patterns, as well as pressures on price to gain insight into the future direction of the market.
Key Message:
After a rather typical and systematic climb up from the start of this year, we have seen market growth paused since mid-June. The market trend has been moving sideways and we continue holding on to some cash positions as we wait to see if this market will continue upwards as expected for the remainder of 2021 or if we will see a more significant pullback.  
We have been expecting a short term pullback in the near term, which would test the strength of the market, but perhaps this ‘pause’ in growth will be enough to restore confidence in investors. The longer the market goes sideways, the greater the chances of “shaking out” the market speculation and overbought scenarios.
The price of the market and trading volume in the market are relatively insignificant at the moment. Neither are pushing any notable boundaries or causing much attention. Although these measures are important data points, at present they aren’t telling us anything noteworthy to act on. Also worth noting is the historically low trading volume typically seen in the summer months, so this low volume may be the new normal in the coming months.
The Volatility Index (VIX) is roughly 16.76, which is one of the lowest numbers we have seen since the start of 2020. What this tells us is that investors are comfortable with where the market is and likely waiting to see where this market will move next. We may see an increase in volatility and trading volume after notes from the Central Bank meetings in the first half of June are released. 

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