BullMarketRun.com

Gold shot up by more than $20 an ounce to $1,350 in early trading today as the G-20 finance meetings in Seoul, South Korea, over the weekend produced nothing concrete in terms of a resolution of the currency “wars”…as of 8:30 am Pacific, Gold is at $1,339, well off its high of the day but still up $11 an ounce…Silver is ahead 32 cents to $23.61…the U.S. Dollar Index is down nearly one-third of a cent to 77.02…the CDNX got as high as 1903 this morning and is currently at 1893 for a gain of 15 points…Gold Bullion Development (GBB, TSX-V) is off a penny at 56 cents…things have been quiet on the Gold Bullion front lately while the company has been completing an $8 million financing…the closing of that financing is imminent and we expect the strong underlying fundamentals of the Granada Gold Property will come back into sharp focus very soon with the financing out of the way and the company armed with a treasury of more than $10 million…Seafield Resources (SFF, TSX-V), which is coming off a strong week, is off half a penny this morning at 24 cents…the stock faces resistance at 25 cents but we do expect that will be overcome as exploration continues at Seafield’s highly prospective package of properties in the Quinchia District of Colombia…BMR will be interviewing Seafield President and CEO Tony Roodenburg on Wednesday for an update on Seafield as well as Roodenburg’s other company, Greencastle Resources (VGN, TSX-V), which has re-entered the Gold exploration space after a 3-year absence…Currie Rose Resources (CUI, TSX-V) has started drilling its promissing Sisu River Gold Property at its Mibale Hills Project in Tanzania…we’re learning more about Currie Rose which in our view has an underrated portfolio of properties in Tanzania in addition to its Scadding Property near Sudbury which Trueclaim Exploration (TRM, TSX-V) is advancing under an option agreement…we’ll have more on Currie Rose throughout the week…CUI is unchanged at the moment at 14 cents…GoldQuest Mining (GQC, TSX-V) has pulled back from a 52-week high of 32.5 cents earlier this month to the low 20’s where it has very strong technical support…we encourage investors to do their due diligence on GQC which has properties of considerable merit in the Dominican Republic and Spain…GQC is currently down a penny at 22 cents…

Welcome to our site, or at least a sneak preview of it!  The final version may look much different than this as we continue to develop a very unique investment and money-management resource site.  An important component of this site is original research on small and undiscovered junior resource companies, mostly in the gold exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop.

Disclaimer:

BullMarketRun.com is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company.  We strongly recommend that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions.  The stocks we cover, by definition, are highly speculative and potentially very volatile.  Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisors. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.  It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

The BMR Portfolio

Gold Bullion Development (GBB, TSX-V)

Gold Bullion continues to ride its 100-day moving average and was off a penny for the week at 57 cents on relatively low volume (3 million CDNX shares) as it completes its $8 million financing…word on the street is that the closing of the financing is imminent, within a matter of days…after exhaustive research and 3 visits to the Granada Property over the last 8 months, our faith in this project is absolutely unshakeable and there is not a better time in our view to be a Gold Bullion shareholder…armed with a $10 million+ bank account upon the closing of the financing, and supported by the geological expertise of GENIVAR as well as a rising Gold market, we fully expect Gold Bullion to finish 2010 in very strong fashion…the visuals reported last month give us a high degree of confidence that the next sets of assays, when they come, will be positive with excellent potential for some breakthrough results from the Eastern Extension…mineralization has been encountered over a very wide area at Granada so far and our understanding of the geology of this property is that it is truly a major structure…this deposit will be all about volume, all about tonnage, so all Gold Bullion needs to do is drill, drill, and drill some more which is Frank Basa’s strategy…the consolidation pattern we’ve seen over the last several weeks is typically indicative of a stock that is about to break to the upside…this is supported by the fundamentals which, based on the latest news, confirm more than ever the blue sky potential of Granada….GBB is up 714% since we first uncovered it for BMR readers last December…

GoldQuest Mining (GQC, TSX-V)

GoldQuest has corrected significantly from its recent 32.5 cent high but the stock is still up 18% since we introduced it to BMR readers in late September…the stock closed Friday at 23 cents, down 2.5 cents for the week…earlier this month GoldQuest exploded just beyond the 30 cent level after breaking out of a 2-year base…this is a classic pullback from a technical perspective and presents a major opportunity, especially with the bullish outlook for the CDNX over the next several months at least…GoldQuest has a tremendous portfolio of properties in the Dominican Republic including advanced staged projects (Gold, silver and base metals) such as Las Tres Palmas and Las Animas…in northwest Spain, GoldQuest holds the Toral zinc-lead-silver deposit along with a second polymetallic project (Lago) under application with many similarities to Toral…Toral covers a 6 km strike length of the prospective Lower Cambrian Vegadeo Limestone Formation…this geological structure is regionally mineralized along more than 40 km of its extent and includes the Rubiales zinc-lead-silver deposit located 30 km northwest of Toral…Rubiales reportedly contained an estimated 18.6 million tonne mineral resource grading 7.3 % Zn, 1.3 % Pb and 13 g/t Ag and was mined by Cominco from 1976 to 1991…sulphide mineralization at Toral closely resembles the coarse-grained sphalerite and galena mineralization at Rubiales but Toral contains significantly more silver…a 43-101 resource estimate for Toral is currently being prepared (historical non-compliant resources were reported as 5.4 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag)…

Richfield Ventures (RVC, TSX-V)

Gradually and methodically, Richfield continues to develop its Blackwater Project in central British Columbia as a potential multi-million ounce Gold deposit with some silver and copper mixed in as well…Richfield came out with more positive results last week which were in line with market expectations…BW-81 was the best intersection out of 6 new holes reported…it extended the zone southeastward, returning 171 metres grading 1.04 g/t Au and 8.5 g/t Ag…Richfield is operating with 2 rigs in a fully winterized camp…the company is armed with $16 million in cash and will continue to drill over the next several months…the stock closed the week at $2.69 for a loss of 11 cents…the rising 50-day moving average at $2.40 provides rock-solid technical support…Richfield has jumped 124% since we added it to the BMR Portfolio last December…

Sidon International Resources (SD, TSX-V)

Sidon’s weakness since early August in the face of a very powerful CDNX move has been frustrating for shareholders, some of whom abandoned ship and moved on to other plays…the stock probably got a little ahead of itself last summer when it more than tripled in value in a month’s time…the bottom line, however, is that Sidon continues to have all the blue sky potential we wrote about when we first uncovered this fledgling company last March at a nickel…the fact so many artesinal miners (1500 at one point) would descend upon part of Sidon’s Morogoro East Property in Tanzania clearly illustrates the Gold potential that exists there…Sidon’s team is busy on the ground at Morogoro, preparing for an upcoming drill program, and we have every reason to believe the company is also actively searching for additional land in the general area…Sidon, which improved its balance sheet last month by raising $1.7 million, closed unchanged for the week at 10 cents…

Seafield Resources (SFF, TSX-V)

Seafield had a good week, jumping 3 pennies to 24.5 cents on decent volume…technically, the stock needs to overcome resistance at 25 cents on high volume in order to re-capture some major momentum…we strongly believe in the potential of the company’s Quinchia District properties in Colombia but the pace of exploration there has been a concern…we’re currently arranging an interview with President and CEO Tony Roodenburg which we hope to conduct by Wednesday or Thursday…

Excel Gold Mining (EGM, TSX-V)

Excel finalized a $763,000 flow-through financing last week and also announced that a 4,000 metre drill program will begin at its Montauban Mining Camp Project, 120 kilometres west of Quebec City, by the end of the month…drill targets were selected based on information provided by the most extensive historical compilation of geological data (including over 900 drill holes) ever assembled on Montauban which is a former Gold, silver and base metals producer…the stock closed unchanged for the week at 16 cents…

Colombian Mines (CMJ, TSX-V)

Colombian was off 4 cents for the week at 77 cents, closing exactly at its 100-day moving average…for more than a month now the stock has traded in a tight range between its 100-day SMA and its 200-day SMA…our expectation, based on technical and fundamental factors, is that CMJ will ultimately overcome resistance at 95 cents and break out to the upside…traders should be watching this one closely for if and when CMJ gets through 95 cents, its move will likely accelerate rapidly just based on technical factors…on October 13 the company reported assay results for 7 more holes at its Yarumalito Property with the best result being a 151 metre section in porphyry from YAR-24 grading 0.64 g/t Au…YAR-14 returned 95.5 metres of 0.70 g/t Au…Yarumalito continues to show promise but these are still early days and much more drilling is required…CMJ is one of the best positioned companies in Colombia with a history in that country and a large package of properties…the stock is up 28% since our introduction of it late last year (it was up as much as 170% at $1.62 in March)…

Editor’s Note: North Arrow Minerals (NAR, TSX-V) has been deleted from the BMR Portfolio… more on this Monday.

CDNX and Gold

It was another banner week for the CDNX as it posted its 10th consecutive weekly advance, adding 56 more points to close Friday at 1878.  The CDNX has climbed a whopping 40% since the early July low of 1343 and is quickly approaching our near-term “target area” – a resistance band between 1900 and 2000 with a declining 200-week moving average in the middle of that range.  Investors who are waiting for a major pullback to jump in are likely going to be disappointed.  At some point in the coming weeks there will be a pause or a minor reaction but there are many fundamental and technical reasons for believing the CDNX is in the midst of a massive move of historic proportions that could ultimately (sometime over the next 12 to 18 months) take this Index over 3,400 to a new all-time high.

We’re not even close to a “mania atmosphere” at the moment with the CDNX or Gold mining stocks in general.  When my next door neighbor borrows a bunch of money to invest in the market and starts giving me a list of CDNX stocks that are about to double in a week, that will be the warning sign that it’s probably time to exit this market.  Right now my next door neighbor isn’t even aware the CDNX has jumped over 500 points in less than 4 months.  He’s scared of the market because of what happened 2 years ago.   He’s also spending far too much time glued to American news channels and is freaked out about the mess “the economy” is in.  He has no global perspective and doesn’t understand the impact emerging markets (China, India, Brazil, Russia, etc.) are having on the demand for metals, minerals and resources across the board.  The copper price, for example, used to very closely track the performance of the American economy.  Now that’s no longer the case.  We’re in a long-term commodities “Super-Cycle” (it did not end with the Market Crash in 2008, it was only briefly interrupted) – a wild global scramble for resources – which is extremely bullish for the CDNX.  The CDNX also has a lot of catching up to do just based on the Gold factor.  Gold is up nearly 70% from this time 3 years ago while the CDNX is down about 40%.

Speaking of the yellow metal, it’s now unwinding its overbought condition which is a positive development from a technical perspective.  Gold actually fell this week for the first time in 6 weeks, closing Friday at $1,327 for a weekly drop of about 3% or $42.  Technically, some minor chart damage certainly occurred this week (for the first time in over 2 months Gold fell below its EMA-20) and BMR’s technical analyst has pointed out 2 Fibonacci target levels ($1,300 and $1,273) that Gold could hit in the immediate future.  However, the primary trend is still very bullish, physical buying has consistently supported any technical weakness in this market, and the action in the CDNX strongly suggests that any near-term downside potential in Gold is very limited.  The pullback we saw in Gold this week, and any additional weakness if there is any, should merely lay the groundwork for another explosive move to the upside with the next target being $1,500.

Much was made of China’s quarter-point interest rate hike this week, the first time in 3 years the Chinese have raised their rates.  What that showed is just how strong the Chinese economy is right now and it’s not likely to slow down significantly anytime soon.  It’s important to point out that China still has negative real interest rates (inflation is running higher) which means there’s no opportunity cost for Gold.

G-20 finance leaders are meeting this weekend in Seoul, South Korea. Currencies will no doubt be the hot topic of conversation.  In this war, no guns are fired and no enemies are killed.  Instead, each country tries to outdo the other with bigger and bigger money printing or devaluations.  Our guess is that some sort of mushy statement about “cooperation” will come out of these meetings but any kind of publicly declared “truce” or  “joint effort” will soon be broken.

The “Quote of the Week” goes to U.S. Treasury Secretary Timothy Geithner who was trying to talk up the Dollar this week.  When asked if the greenback would lose its status as the world’s reserve currency, Timothy responded (in words that may go down in history), “Not in our lifetime”.

Gold has traded in a range of $1,315 to $1,330 so far today ahead of this weekend’s G-20 meeting of finance ministers and bank governors in South Korea…curriences will no doubt be the hot topic of conversation…in this war, no guns are fired and no enemies are killed…instead, each country tries to outdo the other with bigger and bigger money printing or devaluations…our guess is that some sort of  mushy statement about “cooperation” will come out of these meetings but any kind of publicly declared “truce” or  “joint effort” will soon be broken…support for Gold around $1,320 may not hold, as John outlined in his piece last night, but the downside from here is limited (most likely a bottom in the range of $1,273 to $1,300)…Gold’s overbought technical condition is in the process of unwinding which is a positive development and sets the stage for the next explosive move to the upside which is when the yellow metal will likely take a run at $1,500…as of 9:00 am Pacific, Gold is down $2 an ounce to $1,324…Silver is off 4 cents to $23.12 while the U.S. Dollar Index is up nearly a 10th of a cent to 77.57…the CDNX is performing extremely well in the face of Gold’s weakness and is about to register its 10th consecutive weekly advance…the Venture is currently ahead 8 points to 1869…the action in the Venture, a leading indicator, is important evidence that any additional weakness in Gold is likely to be limited…rumor has it that Gold Bullion Development (GBB, TSX-V) has indeed wrapped up its financing and official word should be coming any day now…GBB is off a penny at 56 cents….Currie Rose Resources (CUI, TSX-V) enjoyed a strong day yesterday, climbing 3 cents to 14.5 cents on volume of nearly 3 million after announcing some prospecting results and the start of drilling (beginning tomorrow) at its Sisu River Property in Tanzania…we started following Currie Rose last month when the stock was trading around the 10-cent level…what first attracted us to it was its impressive looking chart…what we have have since discovered is that this company has some properties of considerable merit in both Tanzania and Sudbury (a drill program is also just starting at CUI’s Scadding Property in Sudbury which TRM, TSX-V has an option on)…CUI is currently off half a penny to 14 cents for a modest total market capitalization of $11 million…as always, we suggest investors do their own due diligence…we will be continuing ours shortly as we are attempting to line up an audio interview on BMR with company President Harold Smith…Excel Gold Mining (EGM, TSX-V) is getting ready to commence another drill program at its Montauban Property in Quebec…EGM is off half a penny to 15.5 cents this morning and we’ll have more on Excel as part of our regular Week In Review feature over the weekend…

John: Tonight we look at the price of Gold (continuous contract) in Part 4 of our series on indexes and the Gold Sector.  Gold opened today at $1,346, got as high as $1,349, and then fell sharply to a low of $1,318 before closing at $1,326 – down $20 (1.52%) on the day.  The primary trend in the price of Gold is still very bullish and some consolidation right now is actually a positive and healthy development from a technical point of view as this sets the stage for the next leg up:

Looking at the 6-month daily chart above, we see there has been a significant divergence between Gold and the RSI (mauve sloping lines). This is one reason why the RSI can be such a powerful indicator. A second significant feature of this chart is the breakdown today of the Gold price below the daily EMA(20). This is the first time Gold has closed below this moving average since the beginning of August.  The EMA(20) has provided consistent bullish support between August and today.

The last 5 trading sessions have started the process of unwinding the previous overbought condition which began in September.  Gold today bounced off weak support at $1,320 (short green horizontal line) but I will be surprised if $1,320 holds. The Fibonacci levels (blue horizontal lines) show that Gold can expect significant support at the 61.8% retracement level at $1,300.  Other Fibonacci support is at $1,273 (50%) and $1,246 (38.2%).   Note the 38.2% level provides very strong support as it coincides with the strong pivot support (horizontal green line) – this is our “worst case” scenario for a decline.

Given the strength of the CDNX, our very reliable leading indicator which has held up extremely well in the face of significant single-day drops in Gold on 2 occasions now this week, and the strong support we identified the other day at 380 on the TSX Gold Index, a powerful case can be made that Gold on any additional weakness (quite limited) will most likely not drop below the middle Fibonacci level cited above at $1,273.  Note that the 50-day moving average is currently at $1,283 and also provides support.

Looking at the Indicators:

The RSI is being unwound from the overbought condition.  It’s now at the 40% level and pointing down. I expect this to continue down to the 30% level.

The Slow Stochastics has both the %K (black line) and the %D (red line) falling sharply at 35% and 53% respectively. This too is unwinding the overbought situation and I expect these indicators to continue falling to possibly below the 20% level.

The ADX (black line) trend indicator has the +DI (green line) slightly below the -DI (red line) at 20 and 21 respectively. The +DI is falling sharply and the -DI is rising. I expect them to continue in these directions for the immediate future. The ADX (black line) trend strength indicator has reversed downward at 33 indicating a weakening of the bullish trend. Note the +DI peaked before the ADX black line.

Outlook:  Gold is completing the overbought unwinding process and appears to be heading lower to find a support level, most likely between the Fibonacci levels from $1,273 to $1,300.   At present Gold is sitting on weak support at $1,320 but the indicators show that further weakness is to be expected in the immediate future.  Remember, however, the primary trend in Gold is still very bullish and this consolidation is both positive and healthy in terms of laying the foundation for the next explosive move which could take the yellow metal to $1,500 and beyond.

Gold has traded within a range of $1,336 to $1,349 today…as of 8:35 am Pacific, the yellow metal is down $7 an ounce to $1,339…Silver is off 18 cents at $23.75 while the U.S. Dollar Index has firmed up slightly to 77.16…the CDNX is digesting yesterday’s whopping 56-point jump and is currently ahead 1 point at 1872…this is shaping up to be the 10th consecutive weekly advance for the CDNX which is now up 40% from the early July lows…the Index is now approaching a resistance band we’ve identified between 1900 and 2000, so it’ll be very interesting to see how the Index behaves in that area…we’re certainly not expecting a major correction…last night in “Technically Speaking”, John highlighted Rare Earth Metals (RA, TSX-V) which is up half a penny at the moment to 46 cents…other oppportunities in this space that we suggest investors perform due diligence on are Great Western Minerals (GWG, TSX-V) and Stans Energy Corp. (RUU, TSX-V)…rumor has it that the closing of Gold Bullion Development’s (GBB, TSX-V) $8 million financing is imminent and will be announced by early next week at the latest…with the financing completed, the company can ramp up exploration efforts in the LONG Bars Zone with a lot of drill results expected over the final 2 months of the year…GBB is currently off a penny to 57 cents…a company we haven’t mentioned for a little while that continues to have a very attractive chart is Currie Rose Resources (CUI, TSX-V)…Currie Rose announced this morning that a 3,000 metre RC drill program is beginning this weekend at its 100% owned Sisu River Property in Tanzania with an immediate follow-up program of another 3,000 metres based on results…of 13 samples recently collected at Sisu River covering an area 150 metres x 30 metres, 6 returned better than 5 g/t Au with the highest grade being 89.2 g/t Au…a drill program has also commenced at Currie Rose’s Scadding Property in Sudbury…Trueclaim Exploration (TRM, TSX-V) is the operator with an option to earn a 51% interest in Scadding…Currie Rose’s market cap is a modest $10.5 million…it’s currently up 2 cents to 13.5 cents…

The CDNX rocketed 56 points higher today to another new 52-week high of 1872 (it closed at 1871).   As BMR readers know, we are not the least bit surprised by this incredibly bullish activity in the CDNX – we boldly predicted it.  What’s unfolding with the CDNX is a move of historic proportions (ultimately we could certainly see a new all-time high in the Index) fueled not only by rising precious metals prices but strongly driven as well by an overall commodities and resources “Super Cycle” that was merely just briefly interrupted by the 2008 Market Crash.   The world has changed as the 21st century unfolds and the “power shift” to the emerging markets (China, India, Brazil, Russia, etc.) is a hugely important “big picture” theme and a reality that investors need to fully grasp in order to maximize profits in the weeks, months and years ahead.

China has been on a huge resources grab around the globe over the last several years and the Chinese are also a major miner of many of the world’s critical minerals including rare earth elements.  In fact it’s believed China currently controls over 90% of the world’s production of rare earth metals which have become increasingly important in the scientific, environmental and industrial arenas and in our everyday lives (China now appears to be cutting back on exports of these metals, in part to meet domestic demand but also for other strategic reasons, which has drawn considerable attention and concern).

At BMR we focus a lot on the Gold sector but tonight in “Technically Speaking”, John examines the chart of Rare Earth Metals (RA, TSX-V).  Is this a case of showing up late to the “REE Party”?  We don’t think so, especially if you hold our view that the CDNX could power well past 2000 by early next year in a “Nasdaq-style dot-com” surge (too many people haven’t caught on yet to what’s really unfolding with the CDNX and the world’s growing hunger for minerals and resources).  We encourage our readers to do some immediate due diligence on Rare Earth Metals as it has a strong portfolio of properties and a healthy cash position ($7 million).  Today’s close of 45.5 cents gives the company a market cap of $33.5 million:

John: Tonight, Technically Speaking introduces BMR readers to Rare Earth Metals (RA, TSX-V) which opened today at 41 cents, its low, then rose to a high of 50 cents before closing at 46 cents for a gain of 6 cents (13.75%) on very strong CDNX volume of 3.7 million shares.

Looking at the chart we see that RA bottomed at 14 cents in early July and during the past 3.5 months has climbed in a steady and orderly manner to reach today’s high. Note how the daily EMA(20) provides close support for bullish moves and the daily SMA(50) provides long-term support. Both are pointing up and thus are in bullish orientation.

We also see that the last 16 trading sessions formed a downsloping flag and then today, on high volume, RA broke out above the top of the flag (blue line) to a high of 50 cents.   This flag has effectively unwound the overbought condition that surfaced in September. I have drawn in a resistance (horizontal blue line) at 52 cents which is in line with previous highs.

There are 2 Fibonacci Target levels shown, the first is at 54 cents and the second is at 78 cents.   With the first target being so close to a resistance level, the stock can expect to meet resistance between the 52 cent and 54 cent levels.

Looking at the Indicators:

The RSI has formed a “W” formation at the 50% level and is pointing up – very bullish. It has plenty of room to move up before becoming overbought.

The ADX trend indicator has the +DI (green line) above the -DI (red line) and pointing up – bullish. The ADX trend strength indicator (black line) has reversed its downward move and is pointing up, suggesting the strength of the bullish trend is increasing.

The Slow Stochastics has the %K (black line) above the %D (red line) at the 42% level and pointing up. There’s plenty of room for the stock to move up without becoming overbought.

Outlook: Rare Earth Metals should continue to move up if the volume remains high and it should also be able to overcome the 52 – 54 cent resistance band in the near future.  Given the bullishness of the overall market, RA has a good chance in the short to medium term of reaching the Fibonacci target of 78 cents.