BullMarketRun.com

Gold has traded between $1,187 and $1,198 so far today…as of 9:00 am Pacific, bullion is down $3 an ounce at $1,190…Silver has lost 4 cents to $16.47…Copper has retreated slightly to $2.89…Crude Oil is off its highs of the day but is still up 54 cents at $60.94…WTIC is now within a strong band of resistance between $60 and $65…the U.S. Dollar Index, meanwhile, has fallen a full point to 94.10 on ADP’s weaker than expected private jobs report for April…the Fed is running out of weather excuses…analysts who were calling for jobs growth of up to 275,000 in April are likely to be way off the mark when the Labor Department provides its numbers Friday morning…this could cause a major technical breakdown in the U.S. Dollar Index, as we’ve been explaining in recent days, which will support the Venture and commodities…

U.S. private sector payrolls once again expanded at a mediocre pace last month, according to ADP’s employment report this morning…private payrolls increased by just 169,000 jobs in April…economists surveyed by The Wall Street Journal expected ADP would report 205,000 new jobs were added last month…the March ADP increase was revised down to 175,000 from 189,000…

“Fallout from the collapse of Oil prices and the surging value of the dollar are weighing on job creation,” the report said…

Wave Goodbye To The Alberta Advantage

So, we woke up on this 6th of May and discovered that political history has been made in Alberta as voters in that province have elected, largely by accident (this was not a campaign based on ideology), an NDP majority government…the Progressive Conservatives deserved to be punished for their arrogance and sense of entitlement that really began to flourish under Premier Redford, who we referred to previously here as “Alison in Wonderland”…Jim Prentice had a glorious opportunity to be the face and the engine of change at this time in Alberta, but he fumbled the ball badly and snatched defeat from the jaws of victory…his political career is in shambles…

The charismatic Rachel Notley came from nowhere and filled the void of leadership…but behind her smile and great speaking abilities is a very weak team of NDP candidates (full of union reps, environmentalists, students, and even a Hugo Chavez aficionado from Chile) and a slate of policies that are destined, over time, to kill jobs and drive investment out of the province…the NDP would be smart to try to govern from the center, but chances are they won’t…human nature is such that they will delight in their first taste of the fruits of power, and they can be expected to attempt to “over-reach” and remake Alberta in their image…provincially across Canada, throughout history, NDP governments have almost always inflicted serious economic damage…Alberta benefited from that, drawing brain power and financial capital from those jurisdictions in years past…now the tables will be turned…

In many respects, the PC’s deserved to lose their 44-year grip on power…what Albertans don’t deserve, however, are job-killing, investment-killing economic policies that will no doubt be ushered in by the NDP which has a policy platform that is really no different than the one the B.C. NDP implemented to the destruction of that province’s economy in the 1990’s…capital – human and financial – shifted dramatically from B.C. to business and mining friendly Alberta in the late 1990’s, and now we’ll see the reverse of that over the next few years…B.C. and Saskatchewan will benefit the most as Alberta raises corporate taxes by at least 20%, targets the “rich” with higher personal taxes, conducts a royalty “review”, dramatically jacks up the minimum wage, and generally broadens the scope of government in that province…the flight of human and investment capital from Alberta will gradually increase over time…Christy Clark and Brad Wall are smiling this morning…they can be expected to exploit this opportunity, just like Alberta once did to B.C. and Saskatchewan…as investors, this is something to prepare for…as far as we’re concerned, Alberta now represents significant jurisdictional risk…

Investors have wasted no time in rendering their judgement of last night’s election results…money is being taken out of Canadian Oil and gas stocks again this morning (this actually started yesterday in anticipation of an NDP victory) as this development is being viewed as “extremely dangerous” to an industry already reeling from last year’s collapse in prices…

“The business climate in the Oil patch could turn a bit more difficult to navigate than in the past, as Notley has been one of the harshest critics on issues of royalties, taxes and environmental policy,” said a report from Desjardins Securities in Quebec.

What an understatement…

Today’s Equity Markets

Asia

China’s Shanghai Composite turned negative in the final hour of trading overnight, ending down 1.6% at its lowest level since April 21…this comes on the back of a 4% slump in the previous session after local media reported that several brokerage houses are implementing stricter margin financing rules…

Europe

European markets were down modestly today…on the data front, a final composite Purchasing Managers’ Index for the euro zone came in above expectations this morning…the April figure rose to 53.9 above a flash estimate of 53.5…

North America

The Dow is off 48 points as of 9:00 am Pacific…Federal Reserve Chair Janet Yellen today warned that equity market valuations were “generally quite high”, though she said the Fed was not seeing the hallmarks of a bubble…interesting that she would make those comments, and at this time…

Canadian markets, including the Oil-sensitive Venture, are under-performing in light of last night’s NDP sweep in Alberta…Premier-elect Notley may very well attempt to “soothe” the markets in the days ahead, but those will merely be words…actions will speak differently later…

In Toronto, the TSX is down 173 points as of 9:00 am Pacific while the Venture has fallen 9 points to 687…

TSX Updated Chart

The TSX is under pressure again today but bargain hunters will likely step in at and just below the 15000 level, an area highlighted by a wedge support line as shown in this 2.5-year weekly chart…the 200-day moving average (SMA) and the rising 100-day SMA intersect just above 14900…so there is plenty of support here (just like the Venture has around 680) and the outlook for the U.S. Dollar Index gives us added confidence that this support has an excellent chance of holding…

NexGen Energy Ltd. (NXE, TSX-V) Update

Given events in Alberta, all the more reason to be bullish about companies with strong projects and proven management teams in Saskatchewan and British Columbia…

With a rapidly growing high-grade uranium discovery, NexGen Energy (NXE, TSX-V) has increased its bought deal financing at 50 cents per share to $23.75 million (expected to close in about 3 weeks, just before the start of the company’s summer drill program at its Rook 1 Project in Saskatchewan’s Athabasca Basin)…

Previous chart resistance at 52 cents is now strong new support…looks like a powerful summer shaping up for NXE given this bullish 2+ year weekly chart…

NXE is unchanged at 55 cents as of 9:00 am Pacific…

Doubleview Capital Corp. (DBV, TSX-V) Update

The chart for Doubleview Capital (DBV, TSX-V) continues to look highly favorable:

1.  Confirmed breakout above the downsloping flag

2.  Confirmed breakout above Fib. resistance at 15 cents

3.  Confirmed breakout above the 200-day SMA which is now reversing to the upside

Buy pressure (CMF) is on the increase while the RSI(14) is at a very modest level (56%) on this 3-year weekly chart – plenty of room to move higher…

On the ground, it’s obvious that major progress in being made in expanding the Gold-rich Hat Copper porphyry system in terms of both volume and grade…importantly, the company has also found a way to significantly reduce drilling costs as reported April 21…

Final assay results from hole 23 and and a fresh round of drilling are imminent…

Note:  John and Jon both hold share positions in DBV.