Gold has traded between $1,116 and $1,133 on this “jobs report Friday”…as of 9:30 am Pacific, bullion is down $4 an ounce at $1,121…Silver has retreated 15 cents to $14.57…Copper has fallen 7 cents to $2.31…Crude Oil is off 61 cents at $46.14 while the U.S. Dollar Index has declined one-tenth of a point to 96.24…
Particularly encouraging today is the behavior of the Venture and how well it has held up with triple digit losses on the Dow and TSX, while commodities have come under some pressure as well…that’s yet another sign the Venture may have put in an important low at 509 intra-day August 24…the key for the Venture in the days ahead is to push above resistance at its 20-day moving average (SMA)…
The big news impacting markets today is this morning’s final U.S. jobs report prior to a crucial Fed meeting later this month…the Labor Department’s numbers potentially muddied the waters instead of providing clarity…non-farm payrolls rose a seasonally adjusted 173,000, well short of the 220,000 predicted by economists surveyed by The Wall Street Journal…but the unemployment rate fell to 5.1% from 5.3%, and some of the other underlying numbers (such as wages) picked up…
Traditionally, for some strange reason, the August non-farm payrolls have been the quirkiest of the year…August reports have been clunkers in that 11 of the past 12 years the report has come in weaker than expected after the first go around – revisions later, however, have generally been the largest of the year…so there’s a good chance today’s number will be revised up, but not until after the Fed meeting…
Meanwhile, the labor force participation rate edged lower to 10.3% but remains mired near its lowest level since the late 1970’s at 62.6%…
Former Fed Chairman Alan Greenspan made a lot of sense this morning during an interview on CNBC…he said if countries don’t tackle fiscal problems, monetary policy will “become utterly irrelevant”…gridlock by Democrats and Republican on solving the problems posed by the spiraling costs of entitlements, namely Social Security and Medicare, has created a situation the Fed can’t solve, Greenspan said. “Both (parties) have been afraid to touch the third rail of politics.”
Greenspan added that he’s “baffled” that a 25 basis point hike by the Fed would have a major impact on economic conditions around the world…
Schiff On Fed
Well-known dollar bear and Gold bull Peter Schiff has a different take on Fed matters than Greenspan, not surprisingly…in an interview with Kitco News, Schiff said he doesn’t think the central bank wants to raise interest rates, as markets perceive. “I don’t think they’re really considering it,” he stated. “I think they know that if they raise rates, everything is going to collapse and they’re going to have to cut rates back to zero and look like complete fools.”
Schiff also stated that the Fed’s best course of action is to simply let markets take their course and face the crisis the Fed “interrupted” a few years back with its easing measures. “They never actually committed to (raising rates), it’s just the markets that have made that assumption,” he said. “The Fed has not gone out of its way to correct that assumption, but I think that’s by design.”
U.S. Dollar Index Updated Chart
The U.S. Dollar Index is at a key point and needs to be watched closely…an important move, one way or the other, seems likely this month… our consistent position for the past several months – based on chart patterns and global events that may curtail the Fed’s desire to initiate a rate hike until sometime next year – is that the greenback peaked for 2015 in the March-April period, and that the final quarter of this year could be much different for the dollar than Q4 2014…that would also have implications for the Venture and commodities…
For now, the immediate challenge for the Dollar Index is to overcome resistance around the 96 level…RSI(14) has been showing decreasing momentum since the spring but has so far managed to hold support at the 50% level…the crowded dollar trade has the potential to correct quite a bit more to the downside (below support at 93) before the year is out if the right dynamics emerge…
Oil Update
OPEC finally expressed concern earlier this week about low Oil prices, and that could be a signal their “line in the sand”, so to speak, has been drawn around the recent low at $37.75…that’s one factor that has allowed WTIC to push above $45, though a strong band of resistance exists between $45 and $55 which is where the downtrend line currently intersects on this 2-year weekly chart…
A modest firming up or even a stabilization in Oil prices can only be beneficial for the Venture given the high correlation between the two markets…
Copper Long-Term Chart Update
In the face of continuing strong sell pressure, Copper is desperately trying to hold critical support at its long-term uptrend line which also currently intersects through the bottom of a downsloping channel which has been in place since 2011…
Meanwhile, RSI(14) is approaching “decision time” by the end of this year – it will either break above its downtrend line, which would be very encouraging, or it will fall below long-term support at the 30% level…
Today’s Equity Markets
Asia
Japan’s Nikkei tumbled 390 points or 2% overnight to close at 17792…China’s Shanghai Composite resumes trading Monday following a 4-day weekend to commemorate the anniversary of the end of World War II in Asia-Pacific…
Europe
European markets were down significantly today, generally near 3%, extending losses after the U.S. jobs report came out…
North America
Volatility continues to reign supreme in New York…the Dow has posted triple digit losses or gains in 10 out of the last 12 sessions…as of 9:30 am Pacific, the Dow is down 293 points…
The best environment for stocks is when the VIX (Volatility Index) is below 25…it’s currently well off its recent multi-year high of 53, reached intra-day during the “flash crash” August 24, but it’s stubbornly remaining just above 25 on a closing basis…it’s possible that the VIX may not settle down until after the Fed meeting is out of the way mid-month – or perhaps there will be an extended period of volatility (the “new norm” for a while)…
In Toronto, the TSX has lost 150 points while the Venture is down just 1 point at 553 as of 9:30 am Pacific…
The Canadian economy gained 12,000 jobs in August (vs. expectations of a loss of 4,000), bolstered by a gain in full-time employment, but more people were looking for work and the unemployment rate ticked higher for the first time in months, Stats Canada reported this morning…the unemployment rate increased to 7% per cent for the month, up 0.2 from 6.8%, where it had held steady for 6 consecutive months…
Pure Energy (PE, TSX-V) Update
Pure Energy (PE, TSX-V) has displayed pure power in the market over the last couple of months in particular with its moves continuing to correspond with important Fib. levels on John’s 2.5-year weekly chart…very predictable technical patterns here, supported by increasingly encouraging fundamentals including the company’s initial NI-43–101 inferred resource estimate for its Clayton Valley South Lithium Brine Project in Nevada…the Lithium space is attractive to a lot of investors at the moment, and of course there’s also a tech angle to Pure Energy – Tenova Bateman Technologies’ Lithium extraction technology which gives this project the potential to be a low-cost producer of battery-grade Lithium materials…
The August breakout above the ascending triangle was a bullish chart development and allowed PE to reach Fib. resistance bang-on at 47 cents…a gap was then filled with a retrace to support in the mid-30‘s as expected, followed by another test of the high 40’s, a breakout above that key area, and now perhaps a test of the next Fib. resistance…
PE is up a nickel at 64 cents as of 9:30 am Pacific after reaching another multi-year high this morning of 67 cents…
Amarc Resources Ltd. (AHR, TSX-V) Update
The deal announced yesterday between Amarc Resources (AHR, TSX-V) and Thompson Creek Metals (TMC, TSX) regarding AHR’s IKE Project in south central British Columbia is clearly favorable for Amarc’s prospects in our view, especially if drilling begins shortly at IKE as suggested in yesterday’s news…
Under the terms of the agreement, Thompson Creek can earn a 30% interest in the project under a stage 1 option by financing $15 million of expenditures on the property before December 31, 2019, of which $3 million is committed for 2015…
As AHR Chairman Robert Dickinson stated in yesterday’s news release, “Amarc currently holds a permit issued by the B.C. government for a 50-hole drill program at IKE. Crews are to be mobilized to the field for the 2015 exploration season in the near term. Drill activities will focus on the IKE porphyry system to determine the known deposit’s full resource potential as defined by Amarc’s 2014 drill results and postdrilling geological, geochemical and geophysical surveys.”
Technically, Amarc is showing some fresh strength…key resistance is 10 cents where it’s trading at this morning…this is not a high-volume play at the moment like Equitas Resources (EQT, TSX-V), but AHR could nonetheless enjoy a strong finish to the year if they’re able to drill dozens of more holes into IKE…worth keeping a close eye on given the quality of the project, the people, and now some serious money to prove up a discovery…
Note: John and Jon both hold share positions in EQT and PE.
PE – A September to remember … I don’t think she’s done yet…. give us some news and away we go! John & Jon, Thanks for the chart and analysis.
Comment by vepper — September 4, 2015 @ 8:55 am
“Selling on Wall Street accelerated on Friday after the monthly jobs report for August was viewed as solid enough for the Federal Reserve to consider an interest-rate hike in September.”
Oh boy.
Comment by Concerned Citizen — September 4, 2015 @ 9:23 am
Markets need to calm down for the Federal Reserve to pull the trigger on the first interest rate hike in more than nine years, Bank of America Merrill Lynch’s co-head of global economics research said Friday.
“If they met today, there’s no way the Fed would hike interest rates. There’s too much volatility in the markets.”
“It’s not a question of whether they’re going to go. The economy is very much on track. It’s a question of whether you really want to hike into a stock market correction. I wouldn’t do it,” he said.
Comment by Concerned Citizen — September 4, 2015 @ 9:33 am
Anyone watching the volume today on AAO.V?
Comment by BigRig — September 4, 2015 @ 10:05 am
BMR , any chance of a update on DBV and the Sheslay district this weekend ?
Comment by Les — September 4, 2015 @ 10:36 am
We’re currently working on some material related to the district, Les, for posting at some point over the long weekend. Much more to come as the month progresses and we get some news from the companies.
Comment by Jon - BMR — September 4, 2015 @ 10:43 am
EQT – looks like it may break out.
Comment by Dan1 — September 4, 2015 @ 10:47 am
EQT – looks like it may break out, but I expect the MM’s to try to keep it down before the close.
Comment by Dan1 — September 4, 2015 @ 11:18 am
By the way. I am the same Dan, but had to add the 1 at the end as required 4 characters when logging in.
Comment by Dan1 — September 4, 2015 @ 11:19 am
AAO facing .065
Comment by BigRig — September 4, 2015 @ 11:27 am
Jon, one of the site enhancements I would like to see is the ability to edit the comments after submitting. Give it say 5 minutes grace period. Thanks.
Comment by Dan1 — September 4, 2015 @ 11:39 am
Testing
Comment by Greg — September 4, 2015 @ 12:08 pm
DBV gave a little heart beat today…..its still alive…..lol. Hope we hear from DBV next week.
Comment by D4 — September 4, 2015 @ 12:22 pm
D4 – I agree, Farshad needs to file paperwork to keep Chad day off the works site. it’s well within our right to drill, he’s been polite for too long at his and shareholder expense. The 10 trades that happened today and up .035 cents is encouragement that something is stirring…. let’s get in on!
Comment by vepper — September 4, 2015 @ 12:40 pm
Vepper, surely it should have not taken this long to get action against the Chief.
Comment by Les — September 4, 2015 @ 1:12 pm
Interesting that there was selling in GGI today while DBV had a good day? Dan, you had mentioned earlier that you sold GGI to buy more EQT, was that you that accounted for most of the selling volume in GGI?
Comment by Danny — September 4, 2015 @ 2:17 pm
Les – Only guessing here, but I feel Farshad has been trying to be diplomatic over the last 2 months with many parties involved including government. It’s time consuming doing it that way. Imperial Metals did not fool around back when Tahltan put up a blockade with them at Red Chris site. I believe it took them 21 days to get the injunction. On the flip side, something tells me there may have been a verbal agreement between Day and Shirvani, seems coincidental things are stirring “after summer is over”. I don’t think things when well over the two months or as Chad Day had hoped.
Comment by vepper — September 4, 2015 @ 2:31 pm
No, I only sold 15,000 shares of GGI at 8 cents.
Comment by Dan1 — September 4, 2015 @ 3:45 pm
Thanks Dan, I definitely understand why you wanted to load up on EQT as it seems that it will be the more interesting play in the short term and I own both EQT and GGI. At least EQT will be able to drill, no native land issue rights in Newfoundland are there? Although I hate to admit it, it seems like Chad Day knew what he was talking about when he said DBV wouldn’t drill in the summer, I think vepper is bang on with his assessment.
Comment by Danny — September 4, 2015 @ 4:16 pm
Hey Dave – thx for bringing the EQT opportunity to us and BMR and for their coverage as well .. the more DD I do the more exciting it is!! appreciated.
Comment by Joe — September 4, 2015 @ 4:29 pm
Danny…..Chad Day, actually, had NO idea what he was talking about when he landed on the Hat in July with his rent-a-protest team (picture of certain individuals we have from other illegal blockades). That’s for another day. Anyway, we can be pretty sure that much has been going on behind the scenes with various stakeholders recently, just based on what GGI announced…as frustrating as it has been for shareholders the last couple of months, with the DBV situation in particular, my instincts tell me there are a lot of benefits to flow out of all of this in the very near future. Too much focus on Chad Day at this point, he’s actually the one with the biggest problem. It’s all about the Land Use Plan.
Comment by Jon - BMR — September 4, 2015 @ 4:39 pm
Whew long day, missed all the action today. Phone calls and the daughter took the day away.
First, congrats to our PE, nice 16% gain. EQT, what can you say, 11% gain and the PP still not announced. This was not suppose to close at .145 today. I figured .135. It only shows where we are going. Next week should be a good week. We possibly may hit that double from .12 to .24 by weeks end. I firmly believe we see the .30’s by end of Sept. or first week of October. If target B hits big, we leave the double digit pricing.
Comment by dave — September 4, 2015 @ 4:49 pm
No land issues whatsoever Danny
Comment by Dan — September 4, 2015 @ 4:52 pm
Never mind raising interest rates— Ray Dalio, founder of the world’s largest hedge fund, is predicting that the Federal Reserve will launch a fresh round of quantitative easing rather than tightening at its coming policy meeting in September.
Mr. Dalio points out that since 1981, every cyclical peak and cyclical low in interest rates were lower than previous points until short-term interest rates eventually fell to 0%, which prevented a further rate cut. In response, central banks had to print more money and buy bonds.
One question for Mr. Dalio, who manages some $169 billion, is whether he is actually putting his money where his mouth is.
Quantitative easing seems like an unlikely proposition given that Fed Chairwoman Janet Yellen (and other Fed members) has been very vocal about her desire to normalize monetary policy.
With volatility stepping higher, the most likely move by the U.S. central bank might be a delay in a rate increase to later this year or next, as Barclays has recently predicted.
Comment by Concerned Citizen — September 4, 2015 @ 4:58 pm
Jon, I have no doubt that talks have been going on behind the scenes but summer is almost over and perhaps Chad Day was just lucky with his call. I have no doubt this is all about money, that is generally what most disputes are about.
On a positive note, another site I like to follow for technical analysis is stockscores.com (not trying to promote another site here). They give EQT a Signal (current rating) Stockscore rating of 98 which is the highest technical rating they can give a stock. Looking very bullish.
Comment by Danny — September 4, 2015 @ 5:03 pm
Danny – Recogina has given EQT a price target of .47 to .55 intermediate term. That is a 30 to 45 day window.
Comment by dave — September 4, 2015 @ 6:21 pm
Jon and EQT members:
https://youtube.com/watch?v=moFCcqsSwT8
Comment by dave — September 4, 2015 @ 7:30 pm
Its not taking for some reason. You can go to you tube and in the search type in the rest and it will pull up Jeb.
Comment by dave — September 4, 2015 @ 7:32 pm
Vepper , now I’m curious as to what kind of verbal agreement they might have had. Please speculate even if it’s only rumor.
Comment by Les — September 4, 2015 @ 9:42 pm
Link to recent pic from EQT Twitter page. Hmmmmmm
Garland Project Area | Proterozoic Paragneiss Raft in Diorite | #nickel #Labrador #mineralexploration
https://pbs.twimg.com/media/COFJD2wUEAApiE2.png:large
Comment by Dan1 — September 5, 2015 @ 4:39 am
Oh Dan, rock and roll soon
Comment by dave — September 5, 2015 @ 6:33 am
Dan – There is a book written by Alex Tobi titled “Deep Proterozoic crust – North Atlantic Provinces”. The book covers mostly Labrador, pics on page 153. More Hmmmmmmmm.
Comment by dave — September 5, 2015 @ 6:56 am
Looks like speculation is really going to increase over this long weekend, I think Tuesday morning will be very interesting. We just need the PP to close! Any thoughts on why it’s taking longer than many have suggested it would? Are they trying to get more people in?
Comment by Danny — September 5, 2015 @ 7:31 am
Oh yeah Dave, interesting pic. Wonder if they have sampled the area around this rock? I bet they have and probably the reason for the excitement in Goose Bay last Friday. I haven’t read the book, by Alex Tobi, but sounds interesting.
Comment by Dan — September 5, 2015 @ 8:04 am
Danny – Hardy changed coarse on who to allow in. Very significant decision he made and the right move on the chess board. It will close any day now. Be a little patient and start making out your Christmas list.
Comment by dave — September 5, 2015 @ 9:20 am
The photo is removed from the EQT website now. Wonder why? Anyway, I save the pic and if you look close you can see a rock that is overturned and appears to be shiny. Just my opinion the way I see it. Also you can see the edge of the red stained rock that appears to also have a shine to it. I wonder if this rock was covered by a thin layer of overburden and it was removed. It looks like the slab has been broken off and moved a bit to expose the edges. Anyone else have an opinion on it?
Comment by Dan — September 5, 2015 @ 9:42 am
One thing I have is patience although it may not sound that way sometimes. Thanks dave.
Comment by Danny — September 5, 2015 @ 9:45 am
Dan – Google: Paragneiss raft, near the top is the title Deep proterozoic crust – North Atlantic province. That is his book. Page 153 pics of labrador.
Comment by dave — September 5, 2015 @ 9:56 am
Here is pure speculation on my part regarding the PP. Perhaps EQT is very confident they have something, they want to reward company employees by giving them more time to take part in the PP (hence a little more insider selling on Friday). Again, just speculation on my part.
Comment by Danny — September 5, 2015 @ 10:06 am
Danny – very good. Also remember some 60% held by insiders, so it keeps Hardy in total control of the company.
Comment by dave — September 5, 2015 @ 10:40 am
Dave, that is a very good point. 60% ownership means skin in the game and control in the event of a hit, and any potential early takeover bid can be rejected! This is good.
Comment by Dan — September 5, 2015 @ 10:54 am
Absolutely, control is important if they hit something good. Things are starting to make sense now, I think.
Comment by Danny — September 5, 2015 @ 12:13 pm
Exactly Dan, and we need Hardy in control making the decisions, not someone else.
Comment by dave — September 5, 2015 @ 12:16 pm
Like I said, just worry about your Christmas list.
Comment by dave — September 5, 2015 @ 12:17 pm
Les – I’m sure I remember this correctly, right when the blockade happened Chad Day stated that Farshad and he agreed not to drill over the summer. Farshad later denied this …. coincidence that we have not drilled yet and things are stirring … I’m not sure.
Comment by vepper — September 5, 2015 @ 7:26 pm
Vepper, Chad has made a number of misstatements and misleading statements regarding many issues related to the Hat and the district since May 21 – it’s a very long list. So who to believe? Pretty obvious, I think. We also interviewed a driller who was on the scene – this was a forced shutdown by Chad Day, accompanied by some others who had previous involvement in other blockades….not a case of Farshad simply agreeing not to drill over the summer after a “friendly” visit from the government leader.
Jim, thank u for your comment…yes, we’re getting an excellent response.
Comment by Jon - BMR — September 5, 2015 @ 7:44 pm
Vepper, in any case summer is over , anything to get the drill bit turning is what’s important. If Jon’s lead is correct we should hear something this coming week , if that doesn’t happen be prepared of more selling pressure. The least Farshad could do is give us an update or state which options DBV will take.
Comment by Les — September 5, 2015 @ 9:00 pm
Lot of talk on another board about the IR person for EQT heading to the drilling site? Anyone know if there is any truth to that?…I’ve really never paid attention to other stocks I own if the IR person ever went to the actual drill site or not, seems sort of unusual though to have the IR person or IR company themselves at the actual drill site.. thoughts anyone?
thanks
Comment by Greg — September 5, 2015 @ 9:14 pm
Yes,it’s on his Twitter page.
Sean Adam Kingsley @Canuckoholic 10h10 hours ago
Looking forward to travelling across #Canada to #Labrador tomorrow to visit the #Garland Project. #MineralExploration
Comment by jim niles — September 5, 2015 @ 11:11 pm
Sean Kingsley leaves Vancouver this morning and overnights in St. Johns tonight. Likely tomorrow he’ll catch the flight to Goose Bay, then Voiseys and on to the Garland. He’s an integral part of the Equitas team, has done a fantastic job of promoting their company and imo deserves to be there in the thick of it. I sure as heck would like to be there right now. 🙂
Comment by Treb — September 6, 2015 @ 3:13 am
What that tells me, Treb, is that there’s news very imminent, a new phase in this is about to begin as we alluded to in our Friday report.
Comment by Jon - BMR — September 6, 2015 @ 6:36 am
Wow this could really get exciting
Thanks Jim and Treb
Comment by GREGH — September 6, 2015 @ 9:16 am
I think so too,Jon.How often have you ever heard of an IR or communications person being brought to a drill site?I’d say very rarely,if ever.
Comment by jim niles — September 6, 2015 @ 12:16 pm