BullMarketRun   BullMarketRun.com

A Daily, Vibrant Voice Focused on Speculative Opportunities,
Commodities, and Economic & Political Trends Impacting
The Resource Sector & Equity Markets
 

"Market-Trouncing Returns Through Unbeatable
Technical & Fundamental Analysis of Niche Sectors"

May 13, 2015

BMR Morning Market Musings…

Gold has traded between $1,191 and $1,220 so far today…as of 9:00 am Pacific, bullion has surged $21 an ounce to $1,214 with the greenback under pressure this morning…Silver has added 60 cents to $17.08…Copper is off slightly at $2.90…Crude Oil is 40 cents higher at $61.15 while the U.S. Dollar Index has tumbled a full point to 93.53

HSBC observed in a note yesterday, “The question facing Gold is will bullion derive more upwards thrust from a weaker dollar or will rising yields sap and possibly reverse the rally?  It appears that the currency markets are more influential in aiding bullion, at least near-term, although Gold is running into resistance at the $1,200 an ounce psychological level.”

Meanwhile, HSBC analysts, in an updated outlook for Silver released Monday, stated that half of all industrial demand for the metal this year could come from solar applications.  “The long-term demand for solar power – and with it Silver for photovoltaic and other applications – appears to be positive. According to two 2014 reports from the International Energy Agency, solar power could be the world’s largest source of electricity by 2050.”

Chinese Debt Could Contribute To Worse Than Expected Slowdown

It shouldn’t be a surprise that China is injecting its economy with all sorts of stimulus from rate cuts to infrastructure spending to an equity market on steroids…according to a senior Morgan Stanley investment strategist, the worst of the Chinese economic slowdown is likely still ahead because of the nation’s debt…obviously it’s this potential for a “hard landing” that has convinced Chinese authorities to get very aggressive on stimulus, which has potential positive implications for commodities – this helps explain the move in Copper, for example, as China consumes 40% of the world’s supply of that metal…

“China, to try and sustain its growth rate in the post-financial-crisis era, has engaged in the largest credit binge of any emerging market in history,” said Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley Investment Management…he was speaking yesterday at the Global Private Equity Conference in Washington, D.C., and predicted that the Chinese credit boom would cause problems…whenever a country increases its debt to GDP sharply over 5 years, in the following 5 years there’s a 70% chance of a financial crisis and a 100% chance of a major economic slowdown, according to Morgan Stanley research…

Oil Update

U.S. Crude inventories fell by 2.2 million barrels in the last week, compared with analysts’ expectations for an increase of 386,000 barrels, according to a report this morning by the Energy Information Administration…Crude stocks at the Cushing, Oklahoma, delivery hub fell by 990,000 barrels, EIA reported…

$54 was the key breakout level for Crude Oil as John’s charts showed during the 1st quarter, and what seems increasingly likely is that WTIC may challenge its declining 200-day moving average (SMA) in the upper $60’s…there is Fib. resistance at $60.41 and $64.26…at this point, given Crude’s technical posture and historical patterns, it certainly appears as if the $42.41 low in mid-March was a final bottom…strong new support at $54 which is also just above the rising 50-day SMA…

WTIC6(6)

Macro Enterprises Inc. (MCR, TSX-V) Update

Macro Enterprises (MCR, TSX-V), based in British Columbia, is a company that specializes in pipeline and facility construction and maintenance…we followed its powerful run from below $2 a share in early 2013 to an all-time high of just over $7 last year when it was a good time to sell given Fib. resistance levels and very overbought technical conditions…

The collapse in Oil last fall then took the stock to extreme oversold conditions that persisted from late last year into February…now MCR is making a comeback and appears very attractive once again below $2.50…keep in mind, this is a company that has over $40 million in working capital and has reported its 14th consecutive profitable quarter (Q4 2014) with net income of $3.7-million in what is a cyclical industry…

This 2+ year weekly chart shows strong technical support (Fib., 200-day SMA) around the $2.40 level…just beneath that is the rising 50-day SMA…if current trends hold up, the 200-day should start to flatten out and then reverse to the upside over the course of the summer…

MCR is off 2 cents at $2.43 as of 9:00 am Pacific

MCR1

TSX Gold Index Updated Chart

The overall trend continues to be positive for Gold producers with the TSX Gold Index once again attempting to clear resistance in the mid-160’s, which it should be able to accomplish…what’s beginning to unfold right now is a reversal to the upside in the 50-day SMA…we’re also seeing increasing buy pressure, and a bullish SS cross has occurred as well…this suggests that we could see an important near-term breakout in the Gold Index with a strong final half of May…

The Gold Index is up 3 points at 170 as of 9:00 am Pacific

SPTGD2(3)

Today’s Equity Markets

Asia

Japan’s Nikkei posted a nearly 1% gain overnight while China’s Shanghai Composite closed down 25 points to 4377…a fresh batch of economic indicators from China came in just shy of expectations…

Europe

European markets were mixed today…growth figures for the euro zone came in at 0.4% for the 1st quarter of 2015, below market estimates…individual country data today showed that France’s economy was gathering pace, while Germany’s growth figures came in below expectations…elsewhere, Greek figures showed that the struggling nation was back in a technical recession…

North America

The Dow has reversed earlier losses and is now up 3 points as of 9:00 am Pacific…retail sales data in the U.S. for April was disappointingly flat, with the ex-autos figure up just 0.1% despite the warmer weather…this was below estimates of a 0.5% gain…

In Toronto, the TSX has lost 61 points while the Venture is flat at 692

Bitgold Inc. (XAU, TSX-V)

Bitgold Inc. (XAU, TSX-V) begin trading on the Venture this morning and is off to a good start…the company has some big-time backers, including George Soros and Sprott Inc., and is the first serious financial services platform ever built around Gold…the on-line service allows users to buy Gold, store Gold, and pay for goods and services around the world using Gold as the currency…

Equitas Resources Corp. (EQT, TSX-V) Update

Equitas Resources Corp. (EQT, TSX-V) has released encouraging results from a VTEM plus airborne survey completed on its Garland Property, 30 km southeast of the Voisey’s Bay mine in Labrador…9 areas of conductivity prospective for Nickel-Copper sulphides have been identified with most responses at the very limit of, or significantly deeper than, detection limits of historic surveys…this is a speculative play to watch closely over the next several months…exploration on the target areas is expected to commence in late June…evaluation of the anomalies will include mapping and prospecting, 30 line km of large-loop EM surveys, and up to 4,000 m of diamond drilling…

Since the discovery of the Voisey’s Bay deposit in the early 1990’s, small parcels of Garland have been owned by 9 separate companies…this is the first time that this large property has been consolidated under 1 owner…

EQT is up 1.5 cents to 10 cents on strong volume (all exchanges) of more than 2 million shares…

Calibre Mining (CXB, TSX-V) Update

Over the past year, Calibre Mining (CXB, TSX-V) has been a standout performer in the challenging junior resource market…the company is working strategically with strong partners in the prolific northeastern part of Nicaragua (drilling continues at the Eastern Borosi JV with Iamgold) and also has some 100%-owned ground which it is now drilling as announced just recently…

Calibre’s Phase 1 program at its Montes De Oro Gold Project will consist of 2,000 m in 8 to 10 drill holes, designed to test 2 sub-parallel Gold-mineralized structures defined by surface exploration including trenching results of 52.3 m grading 7.1 g/t Au, 27.5 m grading 4.92 g/t Au, and 33.5 m grading 2.10 g/t Au…

Overbought technical conditions in CXB last September/early October unwound during November and December…Fib. support held between 9 and 12 cents held as expected, and now the turnaround is well under way…

The rising 200-day SMA (not shown on this 2.5-year weekly chart) is now providing excellent support at 13.5 cents…based on its current technical posture, and continued positive exploration developments, CXB is poised in our view to continue to be an “out-performer” as this year progresses…

CXB closed 2 cents higher yesterday at 16.5 cents as it attempts a breakout above Fib. resistance at 15 cents…

CXB2

Note:  John, Terry and Jon do not hold share positions in MCR, XAU, EQT or CXB.

12 Comments

  1. Took a position on EQT today. That is a nice up sloping chart. A lot of old time investors remember diamond fields.

    Comment by dave — May 13, 2015 @ 8:36 am

  2. Silver broke the down trendline. YFI looking good. EQT looking good.

    Where are those drills for WRR.

    Comment by dave — May 13, 2015 @ 9:43 am

  3. PXA- Jon do you have any updates on Phoenix Gold Resources? Their long overdue drill results from their EXCELLENT propertynight on the border on Newmount 8,000,000 good mine. Are the labs really that busy these days?

    Comment by Jeff — May 13, 2015 @ 9:29 pm

  4. Hi Jeff, we’ve never been interested in PXA—-weak management IMHO.

    Comment by BMR — May 14, 2015 @ 3:49 am

  5. GOLD/SILVER BREAKING OUT TODAY?!!! GOLD AT 1222! THAT IS THE BREAKOUT LEVEL?

    Comment by STEVEN1 — May 14, 2015 @ 5:23 am

  6. Gold broke up through the recent wedge yesterday, as the U.S. April retail sales numbers came in flat. No longer an issue about weather, the consumer has stalled, which is a necessary ingredient for stronger growth. The light bulb went off with the hawks, finally suggesting that the Fed will certainly not go in June and probably not in September and maybe not in 2016. The market initially rose on short covering, but once the $1,197 level was breached, and then the $1,202 target it was clean sailing to the $1,217 target. But, the $1,222 level remained elusive and will be needed to be overcome to continue bullish momentum. Perhaps today’s U.S. Producer Price index in the U.S. will provide the catalyst. A confirmation that inflation remains a distant threat should encourage the bulls to attempt an assault. A surprise with a higher number will resume the selling enthusiasm. The U.S. dollar continues to give back value against all major currencies, which continues to be price supportive as well. These markets are data sensitive and a trend to the upside cannot yet be confirmed, but we are close.

    Comment by STEVEN1 — May 14, 2015 @ 5:24 am

  7. Jeff, I was looking at PXA a while ago also, but I agree with Jon. Glenn Laing has been MIA, haven’t heard from the guy in about six months. Leaving investors in the dark all the time.

    Comment by Sam — May 14, 2015 @ 5:52 am

  8. The significant breakout in Silver is really encouraging, Steven, as it has pushed above the downtrend line that John showed Monday…Gold looks like it’s headed toward the top of the channel it has been in for more than 2 years…..with the Dollar Index languishing, the Venture has its best chance now to finally get through resistance at 707…certain quality Gold/Silver juniors that have been beaten down recently could explode in a hurry…

    Comment by Jon - BMR — May 14, 2015 @ 5:55 am

  9. Would that include WRR at 3.5?

    Comment by STEVEN1 — May 14, 2015 @ 6:09 am

  10. Yes. As luck would have it, the timing of the start of WRR’s drill program couldn’t be better.

    Comment by Jon - BMR — May 14, 2015 @ 6:30 am

  11. You guys REALLY need to take a look at v.XAU.BITGOLD is shooting through the roof today after debuting yesterday.Do your DD,because I think this has a chance to go right through the rafters!

    Comment by jim niles — May 14, 2015 @ 7:35 am

  12. We pointed out XAU yesterday, Jim. Looks great, especially with rising Gold prices…

    Comment by Jon - BMR — May 14, 2015 @ 8:06 am

Sorry, the comment form is closed at this time.

  • All Posts: