Economic News Continues Positive

Golden Cross
Technical Analysts rely on historical comparisons to determine their view of what the Charts Say. One of the strongest indicators watched is when Moving Averages (MA) cross each other. A shorter term moving average crossing a longer term moving average is considered a strong indicator.

A Golden Cross is when a 50 day MA crosses a 200 MA. This week the 50 day MA DJIA moved above the 200 MA, which means that recently, the Dow Jones Industrial Index has been substantially more positive and moving upward. This bodes well as a future indicator for the stock market.

Currency Fluctuations – the Strengthening US$
Because of the continuing realization in Europe, especially among the weaker members, that debt levels are becoming unsustainable, the Euro has been weakening recently against the US$. The Euro reached a low of .85 against the US$ in June 2001, and then relentlessly climbed to reach a high of 1.58 in March 2008. In order to buy 1 Euro, you had to pay $1.58 US$. Visiting Europe for Americans became quite expensive.

After reaching this high, the slide has been relentless, reaching $1.27 this week. In simple terms, the US$ is strengthening against most world currencies, and re-establishing itself as the premier world currency.

Chinese Renminbi v US$
The Renminbi (Chinese currency) has been strengthening since June 2010 when the Chinese government, under US pressure started allowing an adjustment in the value of their currency. It has moved in a gradual but continual pattern upward from .147 US$ to .158 US$. This represents approximately a 7% increase in value, which is substantial.

There are two large effects of this. Firstly, China is gradually moving higher in cost as a producer of goods and services, allowing other lower cost nations to compete more effectively against China as a cheaper location for manufacturing. Secondly, the inequity between major currencies is abating and China will gradually fall back into the pack following the USA.

Manufacturing Jobs in the USA
For the first time in some years, employers in the USA are actually increasing employment in the manufacturing sector. In recent years there has been a relentless decrease in the number of new jobs created in the manufacturing sector, and a reduction in the total number of jobs in this sector.

In the most recent statistics released, hiring has actually exceeded layoffs in the manufacturing sector in December 2011.

The Most Recent Headlines in the Republican Primaries
Amazingly, a recent headline this week stated that Mitt Romney’s newest problem, is the surge in positive economic activity in the US which bodes well for the re-election of President Barack Obama.

How perspectives can change in a short time.

The views expressed in this blog are opinions only and are not investment advice. Persons investing should seek the advice of a licensed professional to guide them and should not rely on the opinions expressed herein. This blog is not a solicitation for investment and we do not accept unsolicited investment funds.

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.

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