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Gold has traded between $1,134, just above its 50-day moving average (SMA), and $1,156 so far today…as of 9:00 am Pacific, bullion is down $19 an ounce at $1,136…Silver is off 13 cents at $14.65…Copper has added a nickel to $2.30…Crude Oil has gained $1.18 a barrel to $39.42 while the U.S. Dollar Index has jumped by more than a full point to 94.61 after touching Fib. support just below 93 yesterday…overall, however, the Dollar Index is still looking vulnerable entering September with resistance at the now declining 100-day moving average (SMA) at 96.30…that’s supportive for Gold…

China’s net Gold imports from Hong Kong rose in July as a decline in prices and a stock market rout spurred some investment demand…net inbound shipments rose to 40.7 metric tons last month from 22.1 tons in June and 21.1 tons a year earlier, according to data compiled by Bloomberg from the Hong Kong Census and Statistics Department today…

A positive reaction in North American equity markets this morning to China’s stimulus measures announced following the close of trading on the Shanghai which plummeted another 245 points or 7.6% overnight to close at 2965…China’s central bank cut interest rates for the 5th time since November and lowered the amount of cash banks must set aside, falling back on its major levers to stem the country’s biggest stock market rout since 1996 and a deepening economic slowdown…the 1-year lending rate will drop by 25 basis points to 4.6%, while the 1-year deposit rate will fall a quarter of a percentage point to 1.75%…the required reserve ratio is being lowered by 50 basis points for all banks to cover liquidity gaps, the PBOC stated…

What China’s Real GDP?

While Chinese authorities reported 7% GDP growth in Q2, other estimates have come in much lower…London-based Capital Economics looks at freight activity, electricity, property development, passenger travel and sea shipments, and concludes that China’s economy expanded much more slowly in Q2 than the official Chinese estimate…Lombard Street Research, also a London research outfit, uses another approach, including a different measure of inflation, and comes up with just a 3.7% growth rate…

An economic slowdown in China (as opposed to a more serious broader financial system meltdown and civil unrest there) is not likely to drag the U.S. into a recession…U.S. exports of goods and services to China are equal to less than 1% of U.S. GDP, and just 2% of S&P 500 company revenues are explicitly attributable to China, according to Goldman Sachs…one benefit to the U.S. of a Chinese slowdown is lower Oil prices – that puts more cash in the pockets of consumers who account for 70% of economic growth…

Perhaps the Fed’s biggest problem with China is what will developments there do to a pace of U.S. inflation that already isn’t anywhere close to its 2% target…

Yesterday’s North American Market Meltdown

The S&P 500 Index came within 34 points of setting off a marketwide circuit breaker yesterday that would’ve shut down trading for 15 minutes to restore order (or create more panic)…more than 2 billion shares changed hands in the first 30 minutes, almost one-third of what usually trades in a day…

Meanwhile, more than $50 billion (U.S.) of market value was erased from the world’s 10th biggest company, General Electric Co. (GE, NYSE), in yesterday’s opening meltdown (GE suffered its biggest intra-day loss since 2007)…at its worst, about $1.2 trillion of market value had been erased from U.S. shares before prices began to rebound…trading of U.S. stocks and ETFs was paused more than 1,200 times in the early going as the market experienced extreme volume and volatility…

For what it’s worth – they have made some excellent calls – Goldman Sachs  doesn’t think China, commodity prices and emerging markets are going to doom the U.S. equity market…

Tim Cook’s Strategic Email To Jim Cramer

Did a very strategic email from Apple CEO Tim Cook to CNBC’s  “Mad Money” host Jim Cramer help bail out the market yesterday?…some are speculating that it did, as reported in this morning’s Financial Post…rightly or wrongly, Apple is seen by many as a litmus test of the health of the Chinese economy…

According to an image of the note posted on Twitter by one of Cramer’s colleagues, Cook said that iPhone activations in China had accelerated during the past few weeks and that the last 2 weeks were the best for the App Store this year in China…

Volatility Index (VIX) Update

The “Fear Index” spiked to 53 yesterday before closing at 41 – the highest level it has reached since the 2008 Crash when it surged as high as 90…RSI(14) on this 10-year daily VIX chart even exceeded the 2008 Crash high as it closed at an extreme 89% yesterday…significantly, the 3 previous highs (summer 2011, spring 2010, and the Crash of 2008) in the VIX all corresponded with important market lows…

Today’s Equity Markets

Asia

China’s Shanghai Composite ended at an 8-month low today, closing below 3000…that was followed by the central bank announcement, so this battered market should see a turnaround tomorrow…meanwhile, the yuan has dipped to its weakest level against the dollar since 2011…

The latest market decline in China comes at an embarrassing time for the communist government’s leaders…the country has already shut down parts of central Beijing in preparation for a September 3 parade that will feature about 12,000 troops and nearly 200 aircraft. Marking the 70th anniversary of the end of World War II, the parade is meant to celebrate China’s achievements since then…the other big event, the world track and field championships, serves as a reminder of better days in China – held in the Birds Nest stadium built for the 2008 Olympics, it marks a time when the country was coming off 3 years of nearly 13% annual growth…

Japan’s Nikkei fell 4% overnight…meanwhile, India’s S&P BSE Sensex recovered 1% after its biggest single day percentage drop in nearly 7 years yesterday…for the year, India’s market is down 6.4% – its lowest point in 13 months…

Europe

European markets rebounded sharply today, though Goldman Sachs  reduced its 3-month recommendation on European equities from “overweight” to “neutral”….

North America

The Dow has recovered 342 points as of 9:00 am Pacific…improvements in the labor market gave a boost to consumer optimism which beat expectataions according to the latest data from the U.S. Conference Board this morning…its monthly Consumer Confidence Index rose to 101.5 from July’s reading of 91…this beat expectations as economists were expecting to see only a small rise to 92.8…

In Toronto, the TSX has jumped 294 points as of 9:00 am Pacific…

Below is a 6-year monthly chart showing how the TSX fell slightly below its still-rising 1000-day SMA yesterday, and then quickly rebounded as was the case in the spring of 2013…there is obviously strong support in the immediate vicinity of the Fib. 50% level (12829) which was an area of resistance for about a year-and-a-half during 2012 and 2013…

Venture “Awareness” Chart

The Venture is enjoying 1 of its best days of the year, adding 13 points to 531 as of 9:00 am Pacific…

Below is John’s updated Venture 4-month daily “awarenss” chart…again, a critical 1st sign of a reversal will come when the Index breaks above the EMA(8) – then, for confirmation, the EMA(20)…those are currently declining at 551 and 573, respectively…

Several encouraging aspects regarding this chart:

1.  Sell pressure peaked in July

2.  RSI(14) landed at previous support yesterday in deeply oversold territory

3.  DI levels are at extremes

4.  Estimated Fib. support at 515 held yesterday – the big test will be if it can hold through month-end

Garibaldi Resources Corp. (GGI, TSX-V) Update

As we’ve reported, there are many reasons to be excited about Equitas Resources‘ (EQT, TSX-V) upcoming drill program at its Garland Nickel Project near Voisey’s Bay…at the other corner of the country, in northwest British Columbia, all eyes may also soon be on Garibaldi Resources (GGI, TSX-V) which has an excellent opportunity in our view for an important new discovery in the emerging Sheslay district where the drill hole success ratio over the past 2 years, and historically, has been remarkable…

A drilling discovery at the Grizzly, which features many of the same geological, geophysical and geochemical signatures as those observed at the adjoining Hat and Star properties, would confirm just how important and “pregnant” this district is…

As reported by Garibaldi August 14, crews are now on the Grizzly to determine final drill targets at this 270 sq. km project…2 specific areas are the focus of this last round of surface exploration – the vast Grizzly Central region, and the newly acquired Golden Bear claims immediately to the south-southeast where an historical high-grade Gold showing is being investigated along the Golden Bear access road…

Below is a Google Earth map we’ve adapted from the GGI web site (it’s a view from the northwest – Grizzly West area – looking toward the southeast)…generally, on a regional scale, the Sheslay district is lining up as a series of NW/SE trending corridors of Cu-Au porphyry mineralization that already hosts 2 growing deposits and likely a cluster of them spread throughout a broad area…the Grizzly has yet to be drilled…as Doubleview Capital (DBV, TSX-V) made a grassroots discovery at the Hat that helped ignite the Venture in early 2014, so too could Garibaldi in the very near future…with a current market cap of only $4.5 million, GGI’s potential upside just based on speculation in the weeks ahead is significant…

While we’ve yet to hear from Doubleview since that illegal blockade at the Hat in early July, Garibaldi’s news plus the “rumor mill” suggest some excitement is in the works for both companies – and we could all use a good dose of that after the last couple of months…the Sheslay district has the potential to draw widespread market interest in the coming weeks…

GGI 2.5-Year Weekly Chart

This is clearly 1 of the more promising charts on the Venture at the moment…GGI has broken above both a price downtrend line and an RSI(14) downtrend line…the bearish trend has peaked according to the ADX indicator, and sell pressure has been replaced by growing buy pressure…strong support now exists at the downtrend line (6 cents) which also coincides with the 50-day moving average…that SMA has flattened out and is threatening to reverse to the upside…very bullish…

GGI is unchanged at 7 cents as of 9:00 am Pacific…

Canada Carbon Inc. (CCB, TSX-V) Update

Canada Carbon (CCB, TSX-V), with its Miller Graphite Project in Quebec, has been one of the top-performing Venture plays since the spring of last year, and (amazingly) has managed to hold its uptrend support line despite the 50% plunge in the Index since last summer…that, in itself, is quite a feat…

CCB has met very persistent chart resistance around 30 cents since the beginning of last year, so that’s the key level to watch…the duration and strength of that resistance will make any breakout that much more powerful…no news from Miller since mid-July…watching closely for potential developments over the next several months that could finally lift CCB over The Wall…

CCB is off half a penny at 27.5 cents as of 9:00 am Pacific…

Silver Short-Term Chart

After posting 4 straight weekly gains, Silver is again on the defensive and testing Fib. support at $14.50…the band of Fib. resistance between $15.30 and $16.60 is strong as demonstrated during this latest rally, which also indicates how the narrative of a slowing global economy has created some significant headwinds for this metal…

Silver Long-Term Chart

An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that could develop…

It seems possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce, though it’s impossible to predict in these volatile markets if indeed that was a final low…RSI(14) has so far managed to hold support which goes back to 2001…

Sell pressure continues to remain very strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which started modestly in early 2013, could continue for a while yet…this should be viewed in a larger context as a bullish contrarian indicator given historical patterns…it doesn’t necessarily mean, however, that Silver has found a bottom just yet…

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