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August 14, 2019

7 @ 7:00

Visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,496 and $1,519 so far today as it rebounds from yesterday’s profit taking…as of 7:00 am Pacific, bullion is up $13 an ounce at $1,514…Silver has pushed back above $17 an ounce, climbing 18 cents to $17.10…key nearest Fib. resistance is in the $17.20’sGold is hot but there’s another metal which is hotter – Nickel…up 30% over the past 2 months, Nickel has delivered more than double the performance of Gold and the gap could get wider as the supply of Nickel stagnates and demand accelerates…Nickel bulls also seem to have declared war on shorts who may soon have to capitulate…Nickel jumped as high as $7.29 overnight but is currently off 8 cents at $7.13…Copper has slid 3 pennies to $2.59 while Zinc is down 2 cents to $1.02…Cobalt continues to rebound, up 91 cents at $13.83…Crude Oil is under pressure, $2 lower at $55.10…Global Oil markets were impacted overnight by soft economic data out of China and Germany while the American Petroleum Institute’s reading of domestic Crude stockpiles rose by a much larger-than-expected 3.7 million barrels last week…the U.S. Dollar Index is flat at 97.81…Frank Holmes, CEO of U.S. Global Investors, told Kitco News, “Europe is such a basket case of taxation and regulation that they can’t get their economy going to they’ve gone to zero interest rates, in fact, Denmark is paying you to take out a mortgage”…Canada is also becoming a basket case of taxation and regulation and must reverse course quickly at the federal level to avoid the European disease…news just out that Canada’s Ethics Commissioner has found Prime Minister Trudeau contravened the federal Conflict of Interest Act in relation to the SNC-Lavalin (SNC, TSX) scandal…Mario Dion has found that after taking months to review “troubling” evidence relevant legal and constitutional principles, Trudeau contravened section 9 of the Act, which states that public office holders are prohibited from using their position to seek to influence a decision that furthers the interest of a private 3rd party…

2. Global growth concerns flared up again today after a trio of softer-than-expected economic data releases from China, including the weakest industrial production figures in 17 years, and news that Germany’s economy contracted 0.1% over the 3 months ending in June, thanks in part to a slump in exports linked to U.S.-China trade tensions…the weak readings for China and Germany, alongside the ongoing political turmoil in Italy and Argentina and the simmering protests in Hong Kong, snuffed out yesterday’s rally on Wall Street…China’s move to fix its currency north of the $7 mark again today also suggests yesterday’s trade detente may not signal a near-term breakthrough in negotiations between the world’s 2 biggest economies…

3. Inverted yields and the stock market, separating fact from fiction:  The yield on the benchmark 30-year Treasury bond plunged to a new record low this morning as a global hunt for safer assets threatened to send the rate below 2% for the first time in history…shortly before 5 am Pacific, the yield on the U.S. 30-year bond traded at 2.015%, well below its prior all-time low of 2.0889% hit in the days following Britain’s June 2016 referendum to leave the European Union…along with the record low in the 30-year yield, plunging long-term rates caused the 10-year yield to fall below the 2-year rate, normally a reliable recession indicator…however, historical analysis shows that stocks typically have another 18 months to rally before equity markets start to see signs of trouble…while an inversion has preceded each recession over the past 50 years, the lead time is extremely inconsistent…historically, an inverted yield curve has been accompanied by a variety of other ominous economic signals including layoffs and credit deterioration…that isn’t happening now…data from Credit Suisse going back to 1978 shows that 1) The last five 210 inversions have eventually led to recessions; 2) A recession occurs, on average, 22 months following a 210 inversion; 3) The S&P 500 is up, on average, 12% 1 year after a 210 inversion; 4) It’s not until about 18 months after an inversion when the stock market usually turns and posts negative returns…

4. Gravity and CSAMT key geophysical ground surveys conducted at American Pacific Mining’s (USGD, CSE) Tuscarora Gold Project, optioned to OceanaGold (OGC, TSX), have unlocked more of the geological mysteries surrounding this promising land package in Nevada that has delivered some impressive high-grade numbers…Tuscarora is a high-level, epithermal Gold/Silver district containing numerous precious metal veins within the project area…mineralization is coeval with that found in the nearby world-class Carlin and Cortez trends but differs in that it is hosted in a 40-million-year-old volcanic rock sequence on the flanks of an ancient caldera…historic drilling along the South Navajo zone has intersected high-grade mineralization from the South Navajo vein, just 1 of many veins that project into the property and are covered by pediment gravels…historic exploration efforts have focused on the interpretation that all veins are parallel to the South Navajo vein…the Navajo vein system has a north-northwest trend and dips to the west, with past drilling directed toward the east to intersect the vein…the newly interpreted geophysical data, in addition to geologic mapping, indicate that there are several structural trends ranging from northeast to north-south to northwest trending, and that dips are both east and west…no past drilling has addressed the east-dipping structures and no holes in the district have ever been drilled to the west to intersect this structural trend…the newly defined target areas, thanks to he gravity and CSAMT data, have very little drill data and open up entirely new project-wide exploration potential…drilling begins during the 2nd half of August…USGD is up half a penny at 17.5 cents through the first 30 minutes of trading…

5. The Dow has given up all of its gains from yesterdayand then some, in early trading today…the Dow has tumbled 457 points as of 7:00 am Pacific on global growth concerns…bank stocks are leading the declines as it gets tougher for the group to make a profit lending money in a lower rate environment…in Toronto, the TSX has slipped 188 points with the Gold Index bucking the trend, up 5 points at 252Nighthawk Gold (NHK, TSX) has climbed another 3 cents to 66 cents as the stock takes aim at levels not seen since early 2018/late 2017…the Venture is 1 point lower at 586 with cannabis stocks acting as a headwind again…Eric Sprott has jumped into Kootenay Silver (KTN, TSX-V), acquiring 31.25 million units at a price of 16 cents per unit in a $5 million private placement announcement yesterdayJames McDonald, KTN President and CEO, commented, “We are very pleased to have the support of Mr. Eric Sprott as a major investor in Kootenay.  Having Mr. Sprott make a significant investment in the company is a strong endorsement of our Silver asset base.  This financing puts us in a very strong financial position and allows us to move aggressively forward on not just Columba, but our other key assets as well”Kootneay is up another half penny at 22 cents in early trading…Global Energy Metals (GEMC, TSX-V) announced this morning that it’s carrying out a geophysics program next week at its Lovelock mine in Nevada (Nickel-Copper-Cobalt) to further define targets for a first-ever drill program at the property…the airborne geophysical and topographical surveys are being carried out by MWH, industry leaders in drone technology…

6. The Canadian Marijuana Index is off sharply in early trading and is now just 15 points above a 52-week low…Charlotte’s Web Holdings (CWEB, TSX) has retreated 10% to $26.18 after releasing financial results for the 2nd quarter ended June 30, 2019, showing organic consolidated year-over-year revenue growth of 45% to $25 million (U.S.)…a 75% gross margin produced profit of $18.8 million with net income for the quarter of $2.2 million, 9% of consolidated revenue…elsewhere, Chemesis International (CSI, CSE) has signed LOI’s with 34 private liquor stores in British Columbia for distribution of its hemp-based chew products…Chemesis expects to begin distributing its products throughout the Lower Mainland and other densely populated areas of B.C. by early Q4 2019Chemesis anticipates strong demand in the Canadian market, as its tobacco-free, smokeless product is a healthier alternative to otherwise similar products that are currently available…an IBIS World’s Cigarette & Tobacco Manufacturing research report published in November 2018 estimates the market for such products at $2 billion (CDN) with an annual growth rate of 8% since 2013

7. Over 20 million electric vehicle charging points are expected to be deployed globally by 2030, consuming over 250% more Copper than in 2019, according to consultancy Wood Mackenzie in a new report…Henry Salisbury, Wood Mackenzie research analyst, stated, “Copper is a cornerstone of the EV revolution.  At the heart of the electric vehicle, it is used throughout because of its high electrical conductivity, durability and malleability.  The need for Copper is even more significant when it comes to charging stations and supporting electrical grid infrastructure”…by 2040, Wood Mac predicts that passenger EVs will consume more than 3.7 million metric tons (mt) of Copper every year…in comparison, passenger internal combustion engine vehicles will need just over 1 million mt…Jefferies projects a 1 million mt Copper deficit in 2024 without more capital commitments from miners…Wood recently forecast a roughly 4 mt ton supply gap by 2028, based on annual production of about 25 million mt at that time…

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  1. Why the GEMC sell-off today?

    Comment by Don — August 14, 2019 @ 10:13 am

  2. Trudeau, that is plain and simple obstruction of justice, he should resign TODAY. He will never get re-elected. GOTYA…..

    Comment by Laddy — August 14, 2019 @ 10:25 am

  3. 2 things, Don: a) PP paper coming free trading; 2) This morning’s news…Mitch should have had the drills turning by around this time rather than doing drone surveys and talking about a fall program…tremendous opportunity at this Nevada property but it’s how you execute that matters…

    Comment by Jon - BMR — August 14, 2019 @ 10:56 am

  4. I think tomorrow is a key day for Canada Cobalt. Do we find support again at these levels or do we break down to new 52 week lows. It wasn’t a positive finish.

    Comment by Danny — August 14, 2019 @ 6:13 pm

  5. I picked it up a little more today but it wasn’t a good day for the markets period, Danny, except some Gold producers – the 2 worst back-to-back days on the Venture in quite a while, but that’s the kind of wild trading that can happen in August. The 2nd half of the month is typically much better so this when it usually pays to be brave.

    The market is putting pressure on the Fed, just like it did last December, so no doubt we come out of this with the Fed getting quite a bit more aggressive in terms of loosening monetary policy…

    Comment by Jon - BMR — August 14, 2019 @ 6:27 pm

  6. Mr. Jon, GGI is holding up quite well…

    Comment by Jean — August 14, 2019 @ 6:36 pm

  7. And that’s unusual, Jean, in the sense that most companies that have put out news just recently (Sun Metals being a great example) have had investors use the news as a liquidity event…GGI pushed higher Friday, breaking its trend on news, and investors have eagerly absorbed any loose shares his week…continues to trade above where it was the day before news…that tells me we’ll see some strong activity during the 2nd half of the month…lots to speculate on – we’re going to see some amazing results from hole 53…again, the Venture is prone to significant turnarounds during the last half of August…

    Comment by Jon - BMR — August 14, 2019 @ 6:46 pm

  8. I guess ggi dodged the sell on news bullit this time around, a friend who works up in that area also told me that the weather really hasn’t been all that favourable the past month or two,let’s hope it gets better.should see more results soon as per nr.

    Comment by Laddy — August 14, 2019 @ 7:59 pm

  9. Jon, you draw similarities of current events in the stock market to Dec. 2018?

    Comment by Jean — August 15, 2019 @ 7:02 am

  10. In the sense, Jean, that the Fed was perceived to be behind the curve then, and it’s likely the case now…the U.S. economy has a lot of resilient strength, as seen by today’s retail numbers, but you have this trade battle with China and Europe is in a mess, so more help from the Fed is needed to counter those global headwinds…look what other central banks are doing…the Fed will come around – the market will force it to – so we’ll come out of this August funk with a roar quite possibly…

    Comment by Jon - BMR — August 15, 2019 @ 7:39 am

  11. Nickel on the move, 8 soon.?

    Comment by Laddy — August 15, 2019 @ 8:07 am

  12. Mr. Jon, not to be redundant as I’m not trying to find ways to talk about GGI for no reason, have to say I’m really enjoying the buying again on GGI today. Low volume drop, sits for a bit, buyers come in and soak up some of the selling…especially given what’s happening in the broader market…

    Comment by Jean — August 15, 2019 @ 9:34 am

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