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Gold is testing support around the $1,700 level…as of 6 am Pacific, the yellow metal is down $17 an ounce at $1,706…Silver is 41 cents lower at $31.67…Copper is off 6 pennies at $3.53…Crude Oil is down 33 cents a barrel at $100.66 while the U.S. Dollar Index is up slightly at 78.72..

Events in the euro zone continue to guide the markets…yesterday’s bullish start to the week was tempered when S&P placed the ratings of 15 euro zone countries on credit watch negative citing “systemic stresses” in the region…U.S. Treasury Secretary Timothy Geithner arrived in Germany this morning for a three-day blitz of euro zone officials to urge them to take decisive action to backstop their currency union and resolve a crushing debt crisis…France and Germany appeared to make progress yesterday, reaching a “comprehensive” agreement on new fiscal rules for the beleaguered euro zone as a package of measures designed to save the single currency begins to take shape…the proposals, which include a commitment not to force private sector bondholders to take losses on any future euro zone bail-outs, were announced by “Merkozy” yesterday (German Chancellor Angela Merkel and French President Nikolas Sarkozy) in Paris…together with tough budgetary measures drawn up by Mario Monti’s new Italian government, they will form part of the “fiscal compact” demanded by the European Central Bank to enforce budgetary discipline in the single currency region…ECB President Mario Draghi has hinted that such a compact could be followed by aggressive action by the central bank to stop the recent crippling flight from euro zone sovereign debt…a more active ECB should be bullish for Gold and the markets in general…

Dow futures are pointing to a slightly higher open this morning…the CDNX jumped as high as 1561 yesterday, just below its still-declining 20-day moving average (SMA), but closed down 4 points at 1553 at its 50-day SMA which is now reversing to the upside…it would be bullish for this market to find support at current levels…at the very least, 1500 must hold…a year-end rally that takes out resistance between 1575 and 1700 is on the bulls’ Christmas wish list…

Canada Rare Earths (CJC, TSX-V) enjoyed a powerful day yesterday, climbing as high as 68 cents before closing at 63 cents on CDNX volume of 1.6 million shares…

We suggest readers perform due diligence on Rainbow Resources (RBW, TSX-V), a 1-year old CDNX company led by a powerful group mostly out of Calgary…it now has a major project to cut its teeth into, a slew of promising Gold-Silver-lead properties in a rich historical mining area in southeastern British Columbia…at 15.5 cents, the company’s current market cap is just under $4 million….we expect RBW to raise some money and aggressively tackle its land package, in particular its flagship International Property which interests us because of its Silver potential…a successful group is behind RBW including prominent Calgary businessman Robert Libin and mining veteran Jim Decker of Grande Cache Coal fame…technically, the stock’s 10, 20, 50 and 100-day moving averages are all in bullish alignment and a jump in volume is also a positive sign…

Focus Metals (FMS, TSX-V) has an attractive high-grade graphite deposit (Lake Knife) near Fermont, Quebec, and yesterday the stock jumped 14 cents on release of an initial 43-101 resource estimate for the project…an expanded, deeper and more comprehensive drilling program is planned for the spring of next year to upgrade and expand resources…FMS does face some technical headwinds, so we see no need to chase this at the moment, but it’s a stock worth keeping on one’s radar screen as the technical picture could brighten significantly during the first quarter of next year…a near-term breakout can’t be ruled out, as John outlines below, but it’s also possible a very attractive entry point could open up around the current 50-day SMA of 65 cents given the current technical picture…that price coincides with the strong support band John refers to in the chart below…

John’s other chart this morning is on the Volatility Index (VIX) which investors need to keep a close eye on…of course it measures fear (and greed) in the market…a breakdown in the VIX chart (VIX readings in the low 20’s for example) is essential for a year-end rally in the markets to materialize…we’ll likely get the answer to that very soon…

Gold is weaker this morning after encountering resistance around the $1,750 area…as of 6 am Pacific, the yellow metal is off $12 an ounce at $1,733 after dropping as low as $1,728…Silver is a nickel lower at $32.59…Copper is up a penny at $3.58…Crude Oil is 81 cents higher at $101.83 while the U.S. Dollar Index is off one-fifth of a point at 78.39…

Overall, Gold remains bullish and a minor pullback after last week’s move to the upside is very normal…commercial traders’ short positions in Gold are relatively low which supports a bullish case for December and going into 2012…their short positions in Silver are astonishingly low which bodes very well for that market…

The “Iran factor” is one of the reasons for Oil’s strength recently…rising tensions between Iran and the West have increased the risk of disruption to crude shipments by the world’s fifth-largest oil exporter…Iran warned the West yesterday that any move to block its oil exports would more than double crude prices with devastating consequences for a fragile global economy…it’s clearly a matter of economic and national security for Canada and the United States to produce more Oil in their respective domestic markets and forge ahead as quickly as possible with the Keystone Pipeline Project, but the environmental wing-nuts on both sides of the border are completely detached from reality and their actions are a threat to that security…this week’s meeting at the White House between Prime Minister Harper and President Obama should prove interesting as Obama, who seems to be afraid of angering his environmental constituency, needs a wake-up call and he may get one…

There is some good news out of Washington this morning…Senate Democrats plan to offer a new proposal today to extend a popular payroll tax cut amid signals that Republican leaders would accept a compromise that covers the cost to the federal Treasury…

Dow futures are pointing strongly higher as of 6:00 am Pacific…the CDNX starts the new week at 1557…the technical picture with the CDNX is showing some improvement and a move through 1600 this week would be a very bullish sign…

Canaco Resources (CAN, TSX-V) released more drill results from its Magambazi discovery in Tanzania this morning including 13 metres grading 4.78 g/t Au starting 30 metres below surface, east of the Magambazi Main Lode…drilling continues to infill and extend mineralized zones…Canaco closed Friday at $1.50…it’s hard to imagine it won’t enjoy a much better 2012 after falling from a high of more than $6 per share last spring…an initial NI-43-101 resource estimate for Magambazi is expected by the end of the first quarter…the company is sitting on more than $100 million in cash and has a current market cap of $300 million…

Some of our readers, in addition to our chart analyst, have scooped up shares recently in Canada Rare Earths (CJC, TSX-V) which has been motoring along nicely…it jumped 8 cents Friday to close at 52 cents…reversals in the 50 and 100-day moving averages (SMA’s) are very telling along with this updated 2.5-year weekly chart from John that takes out a lot of the daily “noise”…

It’s very much a pivotal week for the euro zone…French President Nicolas Sarkozy and German Chancellor Angela Merkel are meeting in Paris today under pressure to align their positions on centralizing control of euro zone budgets to stem a debt crisis that threatens Europe’s currency union…after individually outlining their views last week on closer fiscal integration, the two leaders must overcome remaining differences in order to fine tune proposals they want to present to EU leaders in Brussels on Thursday, on the eve of a summit…this will be a critical week for the euro zone with European Central Bank chief Mario Draghi signaling that a euro zone “fiscal compact” could nudge the bank to act more decisively to fight the crisis… what will be fascinating to watch over the coming week is the extent to which the markets try to exert their influence over the crisis…Merkel and Sarkozy could be “pushed around” if the markets aren’t happy with the way things are shaping up…the opposite is also true, so we’re sure to see more volatility in the markets…

Italian Premier Mario Monti takes a package of austerity and growth-boosting measures to a skeptical Parliament today…Monti is to brief both Parliament chambers on the package, which includes $27 billion of spending cuts and tax hikes, and $13.5 billion of measures to boost Italy’s anemic growth…it’s hard to see how tax hikes can be helpful when the root of the Italian problem is a government that has grown too big and simply can’t properly manage the money that it does have coming in…

The escalating sovereign debt crisis has already pushed the euro zone economy into a contraction that could be far worse than economists had expected, business surveys suggested this morning…Markit’s Eurozone Composite Purchasing Managers Index (PMI), which measures changes in business activity across the euro zone, showed the euro zone’s private sector economy contracting for the third month in a row in November…while rising slightly to 47.0 from 46.5 in October, the PMI was still far below the 50 mark that divides growth from contraction and the latest figure was trimmed from a preliminary reading of 47.2…survey compiler Markit said November’s composite PMI put the euro zone on course for a 0.6% economic contraction in the fourth quarter – worse than any forecast from more than 30 economists polled by Reuters last month…in addition, consumer confidence fell across the single currency area to a 27-month low in November, consumer purchasing power fell and there was evidence that labor markets in most countries have recently taken a serious turn for the worse…

Editor’s note…we are now endeavoring to post Morning Musings consistently by approximately 30 minutes prior to the opening of the equity markets Monday through Friday, which means by 6:00 am Pacific or 9:00 am Eastern…

TSX Venture Exchange and Gold

Aided by a sharp recovery in the major equity markets and firmer commodity prices, thanks to central bank intervention (or manipulation if you prefer), the CDNX posted a 52-point gain (3.5%) last week to close Friday at 1557.  As John pointed out in his most recent CDNX chart, last week would be an important test for the Venture and indeed it passed that test.  Support held at 1500, and what’s interesting now is that the 50-day moving average (SMA) appears poised to reverse this coming week to the upside – clearly a bullish development as the 50-day has been in decline since May.  However, as we know, the Index faces a major band of resistance beginning at 1575 and continuing to 1700 which is now just above the still-declining 100-day SMA.  And the 300-day SMA has reversed to the downside which is also a negative.  On balance, though, the November month-end rally that we correctly anticipated in the markets does appear to have some legs.  The next three weeks leading up to Christmas should prove very interesting.  A move through 1675 by year-end would bring the bulls out in force.

Risks: The euro zone situation, the potential for a worse-than-expected slowdown in China and the possibility of significantly higher oil prices (supply-demand factors, Iran) are all threats to the health of the global economy and the markets.

Gold

December is “decision time” for Gold as John’s charts have shown, and there’s every reason to believe the yellow metal will not disappoint.  Our outlook remains bullish, especially in light of  last week’s coordinated central bank action.   For the week, Gold jumped $65 an ounce to close at $1,745.  Silver gained $1.66 to $32.64, Copper jumped 28 cents to $3.57, Crude Oil surged $4.66 to $101.43, and the U.S. Dollar Index fell just over a point to 78.58.

A very favorable COT structure (commercial traders currently have low short positions in both Gold and Silver, and they are seldom wrong) supports our bullish outlook for precious metals which is based on a combination of technical and fundamental factors.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, is having a huge impact on Gold.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  It’s hard to imagine Gold not performing well in this environment.  The Middle East is being turned on its head and that could ultimately have major positive consequences for Gold.

What’s also driving Gold is the weakness of the United States, brought on in no small part by one of the most ineffectual Presidents the nation has ever been saddled with.  America has lost its way and the recent S&P downgrade is both a real and a symbolic reflection of that.  Since the summer of 2009, the U.S. economy has produced a net total of just two million jobs while federal spending has gone through the roof.  Throughout its incredible history, the United States has demonstrated an amazing resiliency and the ability to bounce back from major economic, social and political troubles.  It will do so again but this will take time and a real Commander-in-Chief in the White House by November, 2012.  By then Gold will have climbed another 50% or more.

Cap-Ex Ventures (CEV, TSX-V) surged Friday, jumping 20 cents on Venture Exchange volume of 3.4 million shares.  The company, which announced Friday it has arranged a non-brokered private placement at 85 cents to raise $10.2 million, has made a major iron ore discovery near Schefferville, Quebec, with more results pending.  The current market cap for CEV is a modest $52.3 million.

From a technical perspective, Friday’s action was clearly an important breakout as John’s chart illustrates.

Note: John and Terry do not hold positions in Cap-Ex Ventures (Jon does).

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.

Gold continues to look strong…as of 6:40 am Pacific, the yellow metal is up $4 an ounce at $1,749 after running as high as $1,764…Silver has gained 40 cents to $33.13, Copper is 2 pennies higher at $3.55, Crude Oil is up 53 cents to $100.73 while the U.S. Dollar Index is off slightly at 78.21…

Job creation remained weak in the U.S. during November, with just 120,000 new positions created (slightly less than market expectations), though the unemployment rate slid to 8.6%, a government report showed this morning…the rate fell from the previous month’s 9.0% which would reflect a drop in the participation rate among those without jobs…

Markets in New York and Toronto are positive in very early trading…the CDNX has climbed 8 points to 1556 while the TSX is up 78 points…the TSX Gold Index is unchanged at 420…

While Jon remains on special assignment, John has a new chart on the CRB Index this morning that clearly shows what this Index needs to do in order for the current rally in the markets to continue…this Index is approaching the resistance line of a down-sloping chart pattern that has been in place since last spring…if the CRB Index manages to break out of this pattern, then rest assured the outlook for the CDNX will improve dramatically…it’s critical to keep a close eye on the CRB Index over the coming days and weeks…as of 6:40 am Pacific, it’s up 2 points at 315…a strong move through the 320 area on a closing basis in the near future is what to watch for…

It’s also critical to keep a close eye on the U.S. Dollar which has generally benefited from the nightmare in the euro zone…John’s chart below is a 10-year monthly chart on the Dollar Index which shows there is plenty of room for this Index to move even higher in the coming months (to the top of the long-term symmetrical triangle)…a break below support would be very bullish for Gold as well as the CDNX (previous charts have shown a clear relationship between the CDNX in particular and the Dollar Index with the Venture performing strongly when the Dollar is weak and vice-versa)…

Gold is holding up well in early trading after yesterday’s big run…as of 5:00 am Pacific, the yellow metal is off $2 an ounce at $1,747 after touching an overnight low of $1,740…Silver is looking good (see John’s new chart below) and has gained 29 cents to $33.12…Copper is down 2 pennies at $3.54…Crude Oil is off slightly at $100.27 while the U.S. Dollar Index has retreated one-fifth of a point to 78.19…

Christmas came early for many investors yesterday as the Dow recorded its biggest one-day gain since March 23, 2009…we were expecting a month-end rally and it came with a bang, and this is now a rally that could have some legs to it…the fact central banks had to step in yesterday, however, shows how dangerous the European situation is…Europe’s already crippling debt crisis is sure to worsen in 2012, despite any assurances to the contrary from political leaders, when many of the region’s governments are forced to refinance huge amounts of debt – and at what yields?…how this European horror movie will unfold in the days, weeks and months to come is anyone’s guess, but one possible outcome – perhaps the only answer – is an even more powerful European Central Bank (ECB) that has the authority to print money like there’s no tomorrow and monetize the debt, an idea that Germany has so far completely rejected…at the end the Germans may have no choice…this would have inflationary implications and would be hugely bullish for Gold…

This is a another pre-market version of Morning Musings as Jon remains on special assignment (through tomorrow)…stock index futures are slightly positive as of 5:00 am Pacific…a slew of U.S. economic data is due out today, including car sales and chain store sales, that could give stocks another lift… non-farm payrolls come out tomorrow and expectations are building for a better-than-expected number after yesterday’s ADP private sector report showed 206,000 jobs were added in November…

Silver is looking interesting and another bullish factor is the continuing very low short position of the commercial traders…this has been the case for a couple of months now, and it’s never wise to bet against the commercials…this is an attractive chart (2.5-year weekly)…

Okay, now for the CDNX…John has an updated chart this morning after yesterday’s bullish action with the Index gaining 43 points to close at 1548…this market faces a lot of challenges, not the least of which now is a declining 300-day moving average (SMA) which in the past has always been a prelude to lower prices…we’re into tax-loss season and the previous support area between 1575 and 1600 was recently broken and will now provide resistance…on the positive side, 1500 has held so far as support and it could be tested again – we’ll see…