It looks like the markets are definitely in correction territory now. At one point today, the TSX was down over 500 points! Luckily for people still invested, it recovered to close “only” 200 points down on record volume of over 700 million shares. Financials and resource stocks seem to be the hardest hit as the credit crunch moves investors to less risky investments. The TSX is now down 12% from its July highs.
Now the question becomes, will the global economy slow down and drag commodities down with it? If so, the TSX has a way to fall but if not, all the fundamentals of the economy seem strong enough for the market to drift back up to 14500 territory.