After a period of consolidation, stock markets in Canada, the US, Germany, and France are showing signs of resuming their uptrend. Positive economic indicators in these countries, such as increases in leading economic indicators in the US and GDP growth in Germany and France above expectations, suggest sustained economic expansion. While European growth remains negative, the ECB president noted signs of stabilization. The likelihood of the Canadian and US stock markets increasing beyond previous peaks seems highly probable as governments take steps to inject liquidity and the Canadian dollar rises.

1. After two weeks of consolidation of recent gains (Oct 3rd2011-February 1, 2012) in stock prices, Canadian and
U.S. stock markets indexes are showing signs of resumption of uptrend. Some positive figures i.e. LEI
(Leading Economic Indicator indicator = advanced) in the U.S. grew 0.5% in December followed by an
increase of 0.4% in January signaling sustained expansion of Canada's No. 1 trading partner.
Germany and France have announced economic figures above expectations. These ”rear view mirror'”type
indicators such as German GDP (gross domestic product for the fourth quarter-2011) registered a contraction
of 0.2% vs. expectations of -0.3%. However, a survey of European Center for Economic Research ZEW shows
that German investor confidence took a leap up to the highest level in last 10 months. Furthermore the second
largest economy in Europe, namely France published GDP +0.2% for the fourth quarter 2011. Experts were
expecting a contraction of 0.2%.
The president of the ECB (European Central Bank) Mario Draghi said that while European figures show
negative trends of economic pace last quarter, there are however signs of stabilization at a rate below average
but positive.
In Japan and China, the two governments have taken vigorous measures to inject liquidity into the financial
sector.
As such we have for the first time all the ingredients necessary for a spectacular assault of previous stock
peaks. It is time to overweight equities in investment portfolios.
Considering that Canada’s U.S counterpart the S & P 500 hasfully recovered the decline started in late April
2011 and the Canadian currency is also risingCanadian securities are likely to become increasingly popular on
a global scale.
The likelihood of increases past the previouspeak achieved on April 5, 2011 seems highly probable..
In this context S&P TSX is showing signs of “readiness” to resume the uptrend with the sights set on
exceeding the previous high (14,279). This would represent an increase of 14.55%.
Among the better known Canadian companies with more significant upside potential SNC Lavalin, CGI,
Descartes Systems, Canadian Tire, Tim Hortons, Vista Gold display positive technical buy signals.
I wish you all profitable investments.