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This is a pre-market and abbreviated edition of Morning Musings today due to travel commitments…Gold has been in positive territory during overnight trading…as of 3:00 am Pacific, the yellow metal is up $13 an ounce at $1,629…Silver is 31 cents higher at $30.98…Copper is 4 pennies higher at $3.27…Crude Oil is flat at $82.42 while the U.S. Dollar Index is up one-third of a point at 78.21…European and Asian markets are showing some weakness while Dow futures are off nearly 130 points…

Investors will be focused on some key U.S. economic numbers out today…personal income and consumption data for August will be released at 5:30 am Pacific…this will be followed by the Chicago purchasing managers report at 6:45 am and consumer sentiment at 6:55 am…St. Louis Fed President James Bullard speaks at 11 am in San Diego…

The world’s policymakers are in the driver’s seat and they are taking investors, companies and the global economy for a wild ride, according to Pimco CEO Mohammed El-Erian in an interview on CNBC yesterday…”Policymakers are in control today and they are driving this car very erratically; they’re not even telling you what the destination is, especially in Europe; and instead of looking through the windscreen, they’re arguing among each other…it feels really volatile and unsettling,” said the co-chief investment officer for the fund with $1 trillion under management…

One of the most volatile and difficult quarters for investors since late 2008 and early 2009 draws to a close today…the CDNX has plummeted 422 points or 22% this quarter entering today vs. an 11% decline for the Dow and a 12% drop for the TSX…the TSX Gold Index, meanwhile, is up 6%…what’s particularly troubling is that the CDNX, an extremely reliable leading indicator for the broad markets and the economy in general, has gone beyond what would be considered a normal and healthy major correction and appears to have reversed into a bear market…last week’s drop below the August low seems to have confirmed that…the CDNX has been in a slump for nearly 7 months and is down 35% for the year…we’d like to be able to say a reversal is right around the corner but the fact of the matter is, the Index has broken down…the recent technical deterioration in this market now makes it almost inevitable that the CDNX’s important 300 and 500-day moving averages will reverse to the downside at some point during the upcoming fourth quarter…the last time this occurred was just before the Crash in 2008…in retrospect, one could argue the bear market actually began back in March when the CDNX suddenly pulled back nearly 20%…the questions are, why is this happening and what does it mean?…we’ll be exploring that in more detail in the coming days but one very possible conclusion is that the global economy is in for a shock, that government and private sector economic forecasts for “slow growth” in the coming months and no recession are simply wrong and wildly over-optimistic…the recent weakness in Copper (it broke below important support) adds credence to that argument…

At the moment, the CDNX is trading within a support band from 1400 to 1500…as John’s updated 2.5-year weekly chart shows, the Index is clearly in oversold  territory (based on RSI) but this condition could persist for a period of time just like the 2010-2011 overbought condition lasted for several months…

John has also produced a chart for the Volatility Index which of course is an important gauge of investor fear…John says we need to keep a close eye on the VIX as it potentially could be ready to bust out to the upside…we wish we could be more positive this morning but we need to call ’em as we see ’em…

Gold is steady today after yesterday’s sell-off…as of 8:30 am Pacific, the yellow metal is up $12 an ounce at $1,622…Silver is 59 cents higher at $30.52…Copper is up 2 pennies at $3.23…Crude Oil is $1.23 higher at $82.44 while the U.S. Dollar Index is off half a point at 77.61…investors are cheering some encouraging U.S. economic news that came out this morning as well as the German parliament’s approval of crisis measures to bolster the euro zone rescue fund…

The CDNX, after a 68-point drop yesterday, was up as much as 14 points in early trading but has since fallen below 1500…as of 8:30 am Pacific, it’s off 13 points at 1490…the performance of the CDNX this month (down more than 300 points or 17%) is worrisome…it could not hold the August low and two critical long-term moving averages (300-day and 500-day) are clearly in danger of reversing to the downside sometime during the fourth quarter…the CDNX led the major markets into a bull phase in early 2009 and has been leading them, it appears, into a bear phase since March of this year…in otherwords, the lows for the year in both the Dow and the TSX are likely to occur during Q4…that’s what the CDNX is now telling us…protection of capital and an abundance of caution are warranted more than ever at the moment with the situation in Europe the most troubling and potentially damaging to the markets…a quick solution to the debt woes in the euro zone is simply not likely – the politics seem to be insurmountable – and the risk of a financial meltdown along with social unrest in that part of the world have to be considered significant…as bad as the situation in Greece is, it’s only one of five major countries that are now edging toward default…the other four – Ireland, Portugal, Spain and Italy – owe eight times more than Greece does…for the situation in the euro zone to stabilize and improve, one has to have an incredible degree of faith in politicians – the same ones who created the mess in the first place…there are many CDNX companies with outstanding projects and long-term prospects and we will continue to follow those situations closely, but a “capitulation” moment in this market has not yet occurred in our view…the good news is, fortunes are born at times such as this…the strongest companies will survive and flourish over the long-term…

On The Economic Front

The number of people seeking unemployment benefits in the U.S. has fallen to its lowest level in five months, though the reasons for that may have nothing to do with an improved employment picture…weekly claims slipped below the psychologically important 400,000 mark, falling 37,000 to 391,000…analysts had expected a drop of 3,00o (the four-week average, a less volatile measure, fell to 417,000, the first drop in six weeks)…meanwhile, the U.S. economy grew slightly more than previously reported in the second quarter, helped by consumer spending and export growth that was stronger than earlier estimated, according to a government report this morning that pointed to slow growth rather than a recession…gross domestic product grew at annual rate of 1.3%, the Commerce Department said in its third and final estimate for the quarter, up from the previously estimated 1%…the revision was a touch above economists’ expectations for a 1.2% pace and took GDP growth back to the government’s original estimate of 1.3%…the economy expanded at a 0.4% rate in the first three months of the year…while the expenditure side of the economy showed severe weakness in the first half, economic activity as measured by income fared a little better…gross domestic income rose at a 1.3% rate in the second quarter after increasing 2.4% in the first quarter…the report also showed after-tax corporate profits rising at a 4.3% rate in the second quarter, the largest increase in a year, instead of 4.1%…profit ticked up 0.1% in the first quarter…

Economists at Citigroup have again cut their global gross domestic product forecasts for 2011 and 2012 as growth prospects “continue to deteriorate quickly”…at a global level, the bank’s Citi Investment Research & Analysis unit predicted today that growth will slow to 3% this year and 2.9% in 2012… 2% global growth is seen by the International Monetary Fund and the World Bank as the classification for global recession…the cut marks Citi’s second in less than a month…it last downgraded the global economy on September 6…Citi downgraded its outlook for the United States, Canada, the U.K., Europe and Japan individually…it cut its view on China’s 2012 growth rate to 8.7% from 9%…

A closely-watched indicator of business and consumer confidence in the euro zone slumped for a seventh consecutive month in September, raising fears of a double-dip recession there…the European Commission’s economic sentiment indicator fell 3.4 points to 95.0, bringing it well below the long-term average of 100 and to its lowest level in nearly two years…the September fall comes on top of two large drops in July and August, prompting concern about the third quarter, which comes to a close this week…

An economist at Goldman Sachs is predicting a 40% chance of “stagnation” in the world’s developed markets…having analyzed 150 years of macroeconomic data, Goldman Sachs has found 20 examples of stagnation similar to those experienced by Japan in the 1990’s, most of which occurred during the last 60 years in developed economies…“During these episodes, GDP per capita growth hovers below 1% and is less volatile than usual…they are also characterized by low inflation, rising and sticky unemployment, stagnant home prices, and lower stock returns”…that’s the view of Jose Ursua, an economist at Goldman Sachs, as reported by CNBC this morning in an article by Patrick Allen…”Because these events are correlated with financial crises, the conditional probability of stagnation in the current environment is higher than normal,” Ursua stated…“Trends in Europe and the U.S. are so far still following growth paths typical of stagnations…”whether these countries manage to avoid a ‘Great Stagnation’ by a pick-up in the recovery is likely to depend on policy being able to restore confidence and putting in place reforms that can decisively jolt growth,” he concluded…

Federal Reserve Chairman Ben Bernanke, in a speech yesterday, stated the U.S. can learn how to boost long-run growth from successful emerging economies…”Advanced economies like the U.S. would do well to relearn some of the lessons from the experiences of the emerging market economies,” he said…emerging market growth shows “the importance of disciplined fiscal policies, the benefits of open trade, the need to encourage private capital formation while understanding necessary public investments, the high returns to education and to promoting technological advances, and the importance of a regulatory framework that encourages entrepreneurship and innovation (our emphasis) while maintaining financial stability,” Bernanke stated…

Gold has traded in a range between $1,633 and $1,670 so far today…as of 8:45 am Pacific, the yellow metal is down $5 an ounce at $1,645…Silver is 77 cents lower at $31.11…Copper is off 14 cents at $3.31…Crude Oil is 97 cents lower at $83.48 while the U.S. Dollar Index is down nearly one-fifth of a point at 77.60…new orders for long-lasting U.S. manufactured goods slipped in August on weak demand for motor vehicles, government data showed this morning, but a rebound in a gauge of business spending was an encouraging sign…the Commerce Department said durable goods orders dipped 0.1% after an unrevised 4.1% jump in July…economists polled by Reuters had forecast durable goods orders unchanged last month…orders were held back by an 8.5% drop in bookings for motor vehicles – the largest decline since February last year…non-defence capital goods orders, however (excluding aircraft), a closely watched metric for business spending, increased 1.1% last month after a revised 0.2% fall in July…this suggests that businesses, sitting on about $2 trillion in cash, have not responded to the recent financial market volatility by curtailing spending on capital goods, at least through August…economists had expected a 0.3% rise after a previously reported 0.9% decline in July…

The CDNX has given up almost half of yesterday’s gains as it’s currently down 21 points at 1549…it’ll be important to see some follow-through on yesterday’s advance by the end of this week and quarter…if the CDNX is unable to get through a critical resistance band (previous support) between 1600 and 1700 next month, it’s in trouble…what’s worrisome at the moment is that the 300 and 500-day moving averages are in serous danger of reversing to the downside during the fourth quarter and that’s an early warning of more potential significant downside action…this month’s sell-off, on the heels of the one in August, suggest in retrospect that the CDNX bull market actually may have turned into a bear market last March…we’ll have to wait and see but the probability of that has certainly increased…fortunes are born during downturns, however, so now is a critical time to search extensively for the strongest companies with the best prospects…

Yukon plays continue to get hit hard and that’s not a positive sign for the Venture entering the fourth quarter…ATAC Resources (ATC, TSX-V), which has declined 12 out of the last 13 trading sessions, fell as low as $3.78 this morning but has since bounced back and is now up 2 pennies at $4.05… the most obvious support appears to be the rising 1,000 day SMA around $2.50…Pacific Ridge Exploration (PEX, TSX-V) took a haircut yesterday following drill results from its Mariposa Project, while Kaminak Gold (KAM, TSX-V) is trying hard to keep above the $3 level…all three companies, and many other companies active in the Yukon, continue to have great projects but market sentiment has turned negative – at least for the time being…

Golden Predator (GPD, TSX) released solid results within the last half hour from its Clear Creek Project in the Yukon including 25.5 metres of 2.19 g/t Au from a depth of 15 m from Hole CC11-043; 46.5 metres of 1.69 g/t Au from a depth of 19.5 m from Hole CC11-049; and 52.95 metres of 2.26 g/t Au from a depth of 3.05 m from Hole CC11-051…GPD is currently off 2 pennies at 86 cents…

While Gold remains at very favorable levels, the CDNX is not immune to global influences – in fact, because of its highly speculative nature, it’s usually the first Index to catch a cold before all the others and this is what happened in March…the mess in the euro zone continues and until policymakers can come together and “overwhelm” the problem, as Canadian Finance Minister Jim Flaherty recently stated, markets will continue to be volatile and under pressure…it has become painfully obvious, especially in recent months, that political leadership throughout the world just isn’t sufficient to tackle the debt and growth problems that are plaguing many countries right now and threatening to throw the global economy into recession…Canada is not excluded from that problem and one only had to watch last night’s Ontario leaders’ debate as proof of that…the National Post’s John Ivison summed it up well:  “The overall impression was of three leaders squirting black ink into the water, like a giant octopus, trying to obscure the fact that the province is about to enter a period of retrenchment”…the political situation in Ontario (election coming October 6) is important for investors to keep an eye on because while it’s true there has been a significant shift in both economic and political power in Canada from east to west over the last decade, Ontario is still a critical economic engine for this country…if it stalls, or if Ontario becomes a less friendly business climate, the fallout will be widespread…the nightmare scenario is the strong possibility of a Liberal-NDP minority government in Ontario with NDP leader Andrea Horwath’s “warm fuziness” masking a toxic policy prescription of corporate tax increases ($9 billion) and protectionist “Buy Ontario” policies…she is also no friend of the mining industry…she has a nice smile and can give a good speech, though, which unfortunately reminds us of an American President who has been leading his country down a dangerous economic path…all three Ontario leaders last night avoided discussion of two very critical issues – the long-term unsustainability of the province’s health-care system and how to effectively deal with Ontario’s staggering debt of more than $200 billion…Premier McGuinty, who has racked up more debt for Ontario than all his predecessors combined, seemed equally out of control in last night’s debate, flailing his arms around like a windmill as he lectured everyone on “clean energy” and how David Suzuki backs his platform…good grief…the mushy “progressive” conservative Hudak wasn’t much more impressive and couldn’t directly answer most questions…Ontario’s in trouble and that’s not good for any of us…

This is a somewhat abbreviated version of Morning Musings due to travel commitments…Gold has traded between $1,630 and $1,678 so far today…as of 9:05 am Pacific, the yellow metal is up $32 an ounce at $1,660…Silver has jumped $1.34 to $32.09…Copper has climbed 14 cents to $3.44, Crude Oil is $3.36 higher at $83.60 while the U.S. Dollar Index is off half a point at 77.61…markets are buoyant today with the CDNX rallying out of deep oversold conditions…the Venture is currently up 54 points at 1581 but faces a stiff band of resistance beginning at 1600…

Despite Gold’s sharp move off its early Monday lows near its 200-day moving average (SMA), it remains in a consolidation phase as demonstrated by John’s chart last night…he has been extremely accurate on this consolidation phase and called for it when Gold was trading around $1,900, so it’s wise to stick with his call…Gold has strong resistance just above $1,700, a critical area that must be overcome before the next major up-leg can kick in (as we expect it will at some point during the fourth quarter)…that will require patience on the part of Gold bugs…a re-test of Monday’s lows can’t be ruled out so traders/investors have to be careful here…Gold is prone to another sell-off in the event of any widespread additional liquidation of assets across the board should the economic situation in Europe or the United States deteriorate…we are distrustful of most major political leaders in the world right now, President Obama among them, and their collective ability to do what needs to be done in order to effectively address debt issues and create the necessary environment for private sector economies to generate economic growth and wealth…

American consumers’ confidence in the economy remained weak in September after dropping to a post-recession low during the month before amid continued concerns about high unemployment and low wages…the Conference Board, a private research group, said today that its Consumer Confidence Index was at 45.4, up slightly from a revised 45.2 in August…economists surveyed by FactSet had expected a reading of 46…the August reading, which was the lowest since April 2009, was almost 15 points below July’s reading of 59.2…a reading above 90 indicates the economy is on solid footing…economists watch the number closely because consumer spending accounts for more than two-thirds of U.S. economic activity…

As mentioned, the CDNX is enjoying a strong day…Trade Winds Ventures (TWD, TSX-V), which got a takeover offer from Detour Gold (DGC, TSX) yesterday, and Canaco Resources (CAN, TSX-V) are the two most active Venture stocks today…Visible Gold Mines (VGD, TSX-V) is rebounding nicely after falling as low as 26 cents during the CDNX plunge…VGD announced yesterday that drilling is ready to commence at Wasa East…in addition, a second drill rig has been added at the Joutel Project which is interesting…a Phase 2 program at Wasa Creek will start following receipt of all remaining Phase 1 assay results and the completion of an induced polarization survey and downhole geophysics…VGD is currently up 2 pennies at 31 cents…Richmont Mines (RIC, TSX), which fell as low as $10.15 yesterday, has jumped $1.11 to $11.98…

Spanish Mountain Gold (SPA, TSX-V), which has been one of the best-performing stocks on the Venture this year, dropped as low as 66 cents (its rising 100-day SMA) during yesterday’s continued weakness on the CDNX…it’s currently up 9 cents at 78 cents…Spanish Mountain has a very attractive low-grade but high-tonnage advanced Gold project in central British Columbia that it’s hoping to bring into production within the next few years…B.C. Premier Christy Clark, in a speech last week to the Vancouver Board of Trade, embraced the importance of the mining industry in that province…she said she expects eight new mines to open in B.C. by 2015, along with the expansion of nine existing mining operations, generating $1.6 billion in annual revenue, sustaining 5,000 jobs and creating 1,800 new jobs…”If government can get out of the way, these goals will be realistic,” she said…it’s refreshing to hear a politician say that…

We’ve had some inquiries regarding Adventure Gold (AGE, TSX-V)…we’re currently preparing an article on AGE’s Pascalis Colombiere Gold Property near Val-d’Or which is showing excellent potential…AGE is up 3 pennies this morning to 47 cents and John updates the chart below…

The CDNX fought back from a 47-point intra-day loss to finish down just 18 points today, setting the stage for a possible month-end rally out of deeply oversold conditions. John updates the chart below.

The action we’ve seen in Gold in recent days is actually very bullish for the longer-term as the yellow metal’s technically overbought condition needed to unwind.  Gold found support overnight just a few dollars above its rising 200-day moving average (SMA) which it has not breached since January, 2009.  We’d like to say that Gold is now on a one-way ticket north, but that’s not really the case just yet as more consolidation and volatility in both directions can be expected over the near-term given current and previous chart patterns.  The 2.5-year weekly chart, as put together by John, shows a very reliable trendline that Gold managed to hit early today before staging a powerful intra-day reversal.  Bulls have to reclaim the $1,700 area but that’s not likely to happen right away.

Welcome to our site, or at least the initial version of it!  BMR has been online for two years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.  While we focus very much on the Gold market and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on undiscovered junior exploration companies or small producers, 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.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. Always perform your own due diligence and please read our disclaimer at the bottom.

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. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  If it’s the other way around –  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly –  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) 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 and entertainment 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 adviser, 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 Advisers. 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 Adviser 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.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.