By now, everyone is aware of the impact of the US Election on the Dow Jones Industrial Average (DJIA). What may not be as obvious is the impact it has on the TSX-Venture (TSX-V) and First Global Data (FGD.V).
Looking back five years (weekly) at the DJIA in relation to the TSX-V, we can detect seasonality. Except for 2013, from 2014 to 2016 the TSX-V was positively correlated to the Dow from April and July (See -CORR portion of graph),
However, in 2017, we get a different story, from April to July, the relationship between the DJIA and the TSX-V has made a full shift going from a positive correlation in April to now being a negative correlation. The DJIA now is in overbought territory with a RSI of 71 and has breached R1 at 21,349
In contrast to the DJIA, in the last 6 months, the TSX-V is breaching S1 and approaching oversold territory. Why should you care?
Well, if you happen to own shares or are interested in owning First Global Data (FGD.V) this may be of interest. Looking back 6 months, at the end of February FGD.V was positively correlated to the DJIA and the TSX-V. Since April, that is no longer the case. There is a reversal. Now FGD.V is still positively correlated to the TSX-V but it is negatively correlated to the DJIA. Coincidence? We think not. Our thinking is that money has been coming out of the TSX-V (including FGD,V) and going to the DJIA.
It's true that FGD.V has been filling the trading gaps in April, but from last post May 10th, the stock recovered until about the beginning of June,
However, from then it started to drop again despite the following releases:
May 8 - Partner with The Money Cloud ("TMC") to add global foreign exchange ("FX") comparison and purchasing services. will integrate mobile wallet to provide FX services to 140 countries. Also hired Renmark Financial Communications Inc. for 6 months - 8K/month.
May 8 - 1 Insider sold 100K at 0.54 cents another bought 100K at 0.60 cents.
May 17 - Lian Lian Pay Complete First Phase of Beta Testing on the WeChat Platform
May 25 - Opens an office in Indonesia. Indonesia ranked 14th among the world's recipients of migrant remittances. In 2015, with an estimated $10.5 billion sent from its nationals working abroad.
May 29 - Signed an agreement with Mansoor Brothers Enterprises Inc. ("MBE") for services.
May 30 - Settles debt by issuing 22,333,330 shares at 0.20 cents. to 7159618 Manitoba Ltd
May 31 - Reports Q1 Earnings: Revenue: Q1, 2017 were US$ 3,294,174 as compared to Q1, 2016 of US$ 1,115,407, Income: Q1 2017 was US$ 418,173 as compared to Q1, 2016 of US$ 97,716. Capital on hand - Q1, 2017 of US$ 7,3M as compared to Q1, 2016 of US$ 366,390
June 6 - Initiated strategic partnership agreement with ImpalaPay for mobile wallet deployment in Kenya and 18 other African countries. ImpalaPay has access to 7 national payment switches in Africa, ImpalaPay also in a universal agreement with UBA Bank - 17 Million subscriber
June 8 - Signs agreement with Bondhi Systems Pvt. Ltd (India) to add Micro Credit, Savings, and Mobile Payments for the Under banked
FGD.V is now below S1 and we do not believe that the current downward trend will sustain.
Our daily forecast for FGD,V indicates that the bottom is near - if not already here.
The latest interest rate rise by the Feds can create some turbulence in terms of re-positioning of assets in the short-term but the relationships between the DJIA, TSX-V, and FGD.V has been a factor. FGD.V may now have the flu but we think it will recover.
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