The Toronto stock market could be in for a choppy week of trading as momentum in the TSX rally that started in early March continues to slow.
But analysts say a retrenchment is a positive development after the TSX charged ahead as much as 41 per cent from March 10 to the highs hit on June 11. The TSX netted a gain of almost one per cent last week following a volatile series of sessions, which still leaves the main index up about 37 per cent from March 9.
“The market went very far in a very short period of time, so a bit of a pullback, consolidation ... is actually a healthy thing,” said Patricia Croft, chief economist RBC Global Management. “But I think the bigger question is, the markets have priced in the fact that the worst case scenario is off the table, we’re not going into depression, the financial system is not going to melt down. But I think the recent pullback also reflects the larger issue which is, where do we go from here?”