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An assault on the $1,700 area by Gold in the near future appears almost certain given recent trading action, and this would also be in accordance with John’s bullish technical outlook even in the midst of the plunge to almost $1,500 in late December…so many fundamental factors continue to support Gold including negative real interest rates which are in place for some time to come…the euro zone crisis appears to have stabilized and the ECB is providing necessary liquidity with the IMF also seeking to double its war chest by raising $600 billion in new resources to help countries deal wiht the fallout of the crisis…what has also been impressive lately is how Gold has fared in the face of a stronger U.S. Dollar…watch out for Silver as we mentioned yesterday…technically, Silver is now breaking out – just refer to John’s latest chart on Silver that we re-posted yesterday…it’s up another 32 cents as of 5:45 am Pacific to $30.84 and has pushed through the top side of a wedge…Silver is looking very bullish at the moment which is why it’s time in our view to be gobbling up good Silver plays like the three we mentioned yesterday – Rainbow Resources (RBW, TSX-V), Wildcat Silver (WS, TSX-V) and Great Panther Silver (GRP, TSX-V)…

As of 5:45 am Pacific, Gold is $2 an ounce higher at $1,661…Copper has gained 4 pennies to $3.78 and hit a 17-week high this morning – very bullish…Crude Oil is up $1.26 cents to $101.85 while the U.S. Dollar Index has lost one-quarter of a point to 80.23…

Spain passed its biggest test of market sentiment so far this year today, selling far more longer-term debt than expected as the government pressed ahead with efforts to tackle its problems with the help of an ECB backstop…in Paris, meanwhile, France also drew strong demand at its first bond auction since Standard and Poor’s stripped the country of its triple-A credit rating…

The number of Americans who filed requests for jobless benefits sank by 52,000 last week to 352,000, the lowest level since April, 2008, the U.S. Labor Department reported just a few minutes ago…now if only the Americans would have a President who wouldn’t pander to environmental radicals and understood Wealth Creation 101…

Dow and S&P 500 futures are pointing toward another positive day…the S&P broke above its late October high yesterday, finishing at 1308, which bodes well for the broader market…the Dow and TSX have to yet to do so but aren’t far off…the Venture Exchange should really begin to accelerate once it pushes through resistance around 1575…it’s interesting to note, by the way, as pointed out this morning in a Globe and Mail article by David Rosenberg, the forward price-earnings multiple for the S&P is just very slightly below 12…there has only been one other time in the past quarter-century when it was this low on a one-year forward basis, and that was the first quarter of 1988…a year later, the S&P rallied 15%…there’s plenty of cash sitting on the sidelines right now to fuel a major market move to the upside…

The Venture Exchange’s 30-day moving average (SMA), which has mostly been trending lower since last March, is now reversing to the upside which suggests the current rally is going to pick up some steam…by early February, we expect the 50-day will reverse decidedly to the upside for the first time since last spring – in otherworks, folks, this market is about to “turn the corner” as John showed in a chart last weekend…

We have charts this morning on Gold Canyon Resources (GCU, TSX-V) as well as Cap-Ex Ventures (CEV, TSX-V) which released more positive drill results yesterday from its iron ore discovery near Schefferville, Quebec…John also has another updated chart on one of our favorite opportunities for 2012, Rainbow Resources which continues to motor along…given the scenario we see unfolding in the markets as the year progresses, and all the fundamental factors concerning Rainbow, we strongly believe RBW is one of the best opportunities we’ve put forward over the last two-and-a-half years and we’ve had several 10-baggers during that time including another B.C. play, Richfield Ventures, which was taken over by New Gold Inc (NGD, TSX) last year…

Gold Canyon, which is expected to release an updated 43-101 resource estimate for its Springpole Project in Ontario any day now, jumped 39 cents yesterday to close at $2.27…the stock fell from just above $3 in early November to the $1.70’s in December and January where it was obviously a strong buy considering Springpole is believed to be at least a 5 million ounce deposit…from a technical perspective, there’s a good chance GCU will move higher but keep in mind there is overhead resistance (the declining 100 and 200-day moving averages are currently situated between the $2.40’s and the $2.60’s) including major downsloping resistance at $3.20 as John shows below…

Note: John, Jon and Terry do not hold positions in GCU.

We remain bullish with regard to Cap-Ex Ventures which is clearly developing a world class iron ore deposit and has a strong management team in place to succeed…more solid results came out yesterday, in the wake of the closing of a $10 million financing, but the market took a “sell-on-news” approach and CEV fell 8 cents to 90 cents…there is plenty of fundamental value with CEV and John’s chart shows various areas of strong support, so we would regard any additional weakness as an opportunity…CEV has tremendous long-term potential, so stay focused on the “big picture” with this one…there will be swings and smart traders can take advantage of periods of weakness and strength…

Note: John and Jon hold positions in CEV (Terry does not).

Rainbow Resources has overcome important resistance at 17 cents and the technicals and fundamentals are in powerful alignment…RBW was essentially a shell just six months ago and its fortunes changed dramatically once it acquired privately-held Braveheart Resources last fall…we’re eagerly awaiting what should be a very interesting and detailed geological report on the land package the Braveheart group assembled in the West Kootenays, with Rainbow having completed some exploration work on the properties during the fourth quarter…airborne geophysics are also now taking place…the company has aggressive plans including other potential Silver and Gold property acquisitions…this one has a lot of “legs” and we expect it’s going to generate a lot of interest in 2012…at 18.5 cents, the current market cap is only $4.8 million…John updates the chart below…

Note: John and Jon hold positions in RBW (Terry does not).

Gold hit short-term resistance again yesterday near $1,670 and pulled back during the day to close at $1,652…as of 1:45 am Pacific, an early posting due to travel commitments, the yellow metal is up $2 an ounce at $1,654…Silver is ahead 2 cents to $30.08…Copper is down a penny at $3.71…Crude Oil is 16 cents higher at $100.87 while the U.S. Dollar Index has retreated one-third of a point to 80.75…

Fund managers have started 2012 with a “reawakened sense of optimism towards the global economy and a greater appetite for risk”, according to a survey by Bank of America-Merrill Lynch and reported in yesterday’s Financial Times…the monthly survey recorded the biggest one-month improvement in its outlook for global growth since May, 2009, with only 3% of those surveyed saying the world economy would weaken in 2012 compared to 27% in December…this translated into lower levels of cash holdings, down to an average 4.4% of portfolios from 4.9% in December, as investors shifted slowly into riskier assets…

The Venture Exchange climbed as high as 1553 yesterday before closing down a point at 1538…overall, the Index is looking much healthier these days and any slight pullback (expect one) should be viewed as an opportunity…a reminder (we posted this chart Sunday) – a test of the neckline support, as shown below, w0uld be a normal technical development…

Silver is our theme this morning…as regular readers know, we’re very bullish on the long-term prospects for Silver (very compelling story) which is currently trading above a support band and threatening to break out from the top side of a wedge as John shows below…

We’ll be reviewing a number of Silver stocks in the coming weeks beginning with three this morning:  A speculative but highly prospective exploration play (Rainbow Resources);  2) An advanced exploration play with a growing deposit (Wildcat Silver Corp.) and (3) an established producer (Great Panther Silver)…

Rainbow Resources (RBW, TSX-V)

Very occasionally, one comes across a particular situation in the market that has the perfect “feel” to it…you just know you’ve found a winner and it’s only a matter of time before that’s confirmed…yes, there is never a “sure thing” in the market but when examining upside potential and downside risk with a certain stock, there are times when the “no brainer” label is definitely applicable…that’s how we see it with Rainbow Resources (RBW, TSX-V) which is a newly-listed Venture company whose prospects changed dramatically a few months ago when it acquired privately-held Braveheart Resources, an Alberta-based exploration deal involving some very respected Calgary entrepreneurs including David Johnston and Bob Libin…

Rainbow is hitting the ground running with its Silver-Gold-lead-zinc land package in the West Kootenay region of southeast British Columbia because of several years of hard work by the Braveheart group, intimately familiar with all aspects of the prolific West Kootenay geological setting…they invested their own money and raised some privately and did some initial pre-drilling exploration work which yielded very encouraging results including high-grade, near-surface mineralization…then Braveheart met Rainbow and the rest, as they say, is history…

There is a lot that is still to come out with regard to the Rainbow story, as the company’s geological consultant is preparing a detailed report, but we know enough from what has been disclosed already (and from a property visit) to be able to tell that this one certainly appears to be a “no brainer” at current levels…I added to my personal position yesterday and John’s updated RBW chart shows a breakout after yesterday’s 17-cent close on the stock’s highest volume since January, 2011…

Note: John and Jon hold positions in RBW (Terry does not)…

If you’re bullish on Silver, which we are at BMR, you can’t help but drool over this production statistic – 1,973,250 ounces from just 26,476 tonnes milled…that’s an average grade of approximately 2,100 g/t Ag or 74.50 ounces per tonne – an eye-popping number which, BMR has learned from the B.C. Energy and Mines web site, constitutes the historical production (mostly from the early 1900’s) from Rainbow’s Ottawa Property, the top former producer in the Slocan Mining Camp…if that doesn’t grab your attention, I don’t know what will – and that’s not even what Rainbow considers to be its #1 property (yes, this story gets even better)…

Rainbow is one of our favorite speculative opportunities, immediately and throughout 2012, and at 17 cents it sports a very modest market cap of $4.4 million…

Rainbow’s December 16 news release stated, “Moose Mountain Technical Services, Rainbow’s resource consultant, is currently preparing a comprehensive report on these properties (Ottawa, International, Tin City, President, Gold Viking and Rhea) based on exploration work carried out during this fourth quarter and in recent years by Braveheart Resources, plus valuable historical data going back to the early 1900s. The company expects the report, which will be completed in the near future, will underscore the potential of these properties and identify numerous high-priority drill targets.”

Given the above statement, we anticipate there will be a tsunami of news regarding Rainbow’s British Columbia land package in the coming weeks…so now is the best time for one to get positioned in RBW as we’re convinced it will quickly develop into a very strong Silver and Gold exploration play given the people involved…Ottawa is just one of six properties which makes up what Rainbow is now calling its “Big Strike” Project…I recently visited the Gold Viking Property as part of my extensive due diligence on this company…rest assured, the Rainbow team has assembled a first-rate property package (the 4,000+ hectare International Property, about 200 kilometres north of Nelson, has fascinating potential) and they are determined to build shareholder value and take this company to a whole new level…Rainbow is also actively looking at other possible Gold/Silver opportunities in favorable jurisdictions, so this is not going to be one-trick pony..

The rich West Kootenay region historically has produced more than 5 million ounces of Gold and more than 30 million ounces of Silver…the forest industry has suffered immensely in this part of British Columbia but mining and exploration are on the rebound thanks to higher Gold and Silver prices, and a government that’s encouraging investment in the sector…many properties in the region have gone under-explored since the mining boom of the early 20^th century…there is plenty of untapped potential and the chance of another major discovery has to be considered significant…Rainbow aims to be in the forefront…

The Best Place To Find A New Mine Is Near An Old Mine

Rainbow’s Ottawa Property also produced 793,852 pounds of lead, 28,162 pounds of zinc, 1,748 pounds of copper and minor amounts of Gold according to B.C. Energy and Mines…as the saying goes, the best place to find a new mine is near an old mine…from what we understand, the Ottawa Property has undergone very little drilling or none at all – the oldtimers went after the obvious super high-grade material near-surface and who knows what they may have overlooked…

Between just the Ottawa Property and the International, where high-grade Silver also exists, Rainbow has all the ingredients to become a thrilling drill play…

In summary, just some of the reasons we like Rainbow so much at the moment and why I have personally taken a strong position in the stock…as always, perform your own due diligence and never invest more than you can afford to lose with these speculative juniors…

1. The People Involved

Very solid and powerful group that includes well-known and successful Calgary businessman Bob Libin, a former broker with interests in mining, oil and gas, and the hospitality industry…he’s also very involved with the Calgary Flames and the Calgary Chamber of Commerce…there is a lot of depth on the Rainbow team with highly respected geologist Bruce Durham; David Johnston (director of the Chamber of Mines for eastern British Columbia) who’s also well-known and respected in Calgary (he also headed up Braveheart); and Jim Decker of Grande Cache Coal fame who has more than 30 years’ experience in senior management, mine operations and engineering…this kind of a team plays to win…their track records prove it and they have the ability to raise all the capital they require;

2.  The Land Package

Rainbow has assembled a land package in southeastern British Columbia which appears to have an abundance of high-grade, near-surface Silver-Gold drill targets…the company has six properties and results from a fourth quarter work program are pending…high-grade, near-surface mineralization is a winning combination if Rainbow can indeed verify impressive historical showings and expand on known mineralized systems…keep in mind that due to the work of Braveheart over the last several years, Rainbow is hitting the ground running with this property package;

3. The Capital Structure

Just 26 million shares outstanding at the moment for a market cap of $4.4 million…insiders hold nearly 25% of the outstanding stock…the company was listed only a year ago and hasn’t had its first major “run” yet;

4. The Chart

Few companies on the Venture right now have a technical posture as favorable as Rainbow’s with rising moving averages and numerous other positive indicators as John outlined in the above chart…

WildCat Silver Corp. (WS, TSX)

We have featured Wildcat before at BMR and the company continues to deliver strong drill results from its Hermosa Property in Santa Cruz County, Arizona…WS will be issuing an updated resource estimate and preliminary economic assessment for the Hermosa Project early this year (current indicated resource is 36 million ounces of Silver while inferred resources total 85 million ounces)…WS is not only hitting solid Silver grades at Hermosa but manganese, zinc, lead and copper as well which will help immensely with the economics of the project…

Technically, the stock has been in consolidation since last spring…it closed yesterday at $1.53…take a look at John’s chart and watch for a possible breakout in the near future…as you can see, there is very strong support at $1.25 while the 500-day rising moving average (SMA) – not shown in the chart – is sitting just above the $1 level, so the downside risk really appears to be quite limited with WS…

Note: John, Jon and Terry do not hold positions in WS.

Great Panther Silver (GPR, TSX)

Great Panther has been one of our favorite Silver plays since late 2010…it has been volatile, like Silver itself, but overall GPR has performed well…the company expects to produce 1.72 to 1.90 million ounces of Silver at its Mexican mines this year, up from 1,495,000 in 2011…Gold, lead and zinc production are expected to increase as well though Silver accounts for about three-quarters of the company’s income…

Technically, Great Panther is trading just above its rising 500-day moving average (SMA) and was a great buy just below that level in December…again, the risk-reward ratio here is attractive…GPR closed at $2.29 yesterday…like WS, though, it may need a little more time to consolidate so patience is the key…

Note: John, Jon and Terry do not hold positions in GPR.

Gold is marching higher this morning on strength in the euro and bullish news out of China…as of 6:10 am Pacific, the yellow metal is up $16 an ounce at $1,659…Silver has jumped 34 cents to $30.31…Copper is up 4 pennies to $3.70…Crude Oil has gained $1.90 to $100.60 while the U.S. Dollar Index is off its lows but is down nearly half a point at 81.06…

Spain took in its stride today the first test of investor appetite for its debt since a two-notch ratings downgrade, selling 4.88 billion euros ($6.2 billion U.S.) of treasury bills ahead of a far trickier hurdle later this week…

China – Will Today’s News Quiet The Critics?

China’s economy expanded 8.9%  in the fourth quarter of last year, exceeding expectations but extending a slowdown that began at the start of 2011 and is expected to continue into 2012…the “China Crash Theory” seems increasingly suspect, however, especially considering the Chinese government is now squarely focused on propping up growth with inflation much more under control…

Yesterday, John provided an interesting chart on the Shanghai Composite Index which just recently started to show some bullish signs…indeed, today, the Index shot up 4.2% as it gained 92 points to close at 2298… that’s the biggest single-day gain for the Chinese market in 27 months, fueled in part by investors’ relief at the strength of the growth data and the prospect of further monetary easing…in addition, China has been granting a flurry of approvals to foreign institutions to invest in equities as it steps up its attempt to lure more cash into the country’s stock market…

A potential strong rebound in the young and speculative Chinese stock market is another reason why we believe the Venture Exchange has likely bottomed out and a new uptrend has started…you won’t see this anywhere else – a 12-year comparative chart from John showing the Shanghai Composite and the TSX Venture Exchange…they have tracked each other quite closely and they’re both down substantially from their 2007 highs…

There are different views on China, but the one individual whose opinion on China we trust the most is Frank Holmes of U.S. Global Investors Inc. which you can check out at www.usfunds.com…Holmes is well-known (some of our readers have no doubt heard him speak at various shows) and has spent a considerable amount of time in China, so he definitely has his pulse on what’s happening there…below is an excerpt of a piece Holmes wrote last weekend at www.usfunds.com as part of his Investor Alert…

Holmes:

“The overwhelming debt burden in developed countries translates to an expected slowdown in imports from the emerging world. However, the grandest of those countries, China, likely won’t be affected as much as some people assume. This is “the biggest misconception” about the country’s economy, says CLSA’s Andy Rothman. Exports only play a supporting role for the Chinese economy. The world’s second-largest economy is actually largely driven by domestic consumption from a population more than 1 billion strong with more padding in their wallets.

“Andy says 10 years of tremendous income growth and little household debt, make China the “world’s best consumption story, for everything from instant noodles to luxury cars” in 2012.

“According to December Chinese trade figures, month-over-month and year-over-year imports of aluminum and copper increased significantly. This may be a result of China restocking ahead of Chinese New Year, but M2 money supply growth rapidly rose in recent months, a sign the government is attempting to reaccelerate the economy. Also, the urban labor market has been robust over the past two years, with an annual change just below 5 percent—a record high over the past 15 years.

“Along with rising urban employment, income growth has been tremendous as well. CLSA says that last year was “the eleventh consecutive year of 7 percent-plus real urban income growth,” with disposable incomes rising 152 percent over the past decade.

“Investors shouldn’t expect China’s growth to be as robust as it’s been, as the country’s fixed asset investment growth drops below the 25 percent year-over-year pace of the last nine years, says CLSA. China’s 12th Five-Year Plan has less infrastructure spending compared to the 11th five-year plan. Transport and rail spending is also expected to drop, with only water and environmental protection spending growth rising.

As shown in the BCA chart above, GDP growth has declined below 10 percent, but the growth is currently not the lowest we’ve seen in recent years. CLSA believes that China will prevent GDP growth from slipping below 8.5 percent for the full year, as “Beijing has the fiscal resources and political will to quickly implement a much larger stimulus.”

Judging by the record number of articles mentioning a hard landing in China in late 2011, investor sentiment has swung from euphoria to excessive pessimism, according to BCA Research. Last fall, more than 1,000 articles discussed the risk of a “China Crash.”

As I’ve mentioned before, contrarians view extremely bearish sentiment as a potential attractive entry point. BCA believes the pessimism has been priced in, as technical indicators as well as valuations for domestic and investable markets appear “deeply depressed.”

– From www.usfunds.com, Jan. 13, 2012.

Yes, there are plenty of China skeptics out there…some European hedge fund managers are among them and they are betting that China’s once red hot economic growth will cool dramatically this year, hitting companies, economies and commodity prices that have been fueled by the world’s second largest economy in recent years…managers are taking bets ranging from short positions on equity markets or the currency to buying credit protection on companies that export to China…others are shorting natural resources stocks in other countries that rely on Chinese demand…

“China is an inflated castle in the air,” said Pedro de Noronha, managing partner at London-based hedge fund firm Noster Capital, who is using futures to short Chinese H-shares and is also holding a short position on the yuan (he was quoted in a CNBC article)…

“We’re quite skeptical and worried,” he added…”China needs a healthy U.S. consumer and it’s not getting it right now…China could be a catalyst for a severe leg-down in markets,” he stated…(actually, the U.S. consumer is quite a bit healthier these days)…he also cited recent cases of fraud in China and the country’s booming real estate sector as issues…

“Corporate governance and the rule of law is very different from the West,” he said,”…”and there’s a huge bad loans issue in banks…the real estate market is probably in the biggest bubble in the world we have right now”…

Meanwhile, the Emerging Sovereign Group (ESG), one of the few hedge funds that saw the euro zone crisis coming, is one of the world’s biggest private equity groups and it told its clients recently, according to a Financial Times report, that “We have a gathering sense that the next act of this rolling global debt crisis may well play out in the East”…ESG apparently sent a team for a two-week “deep-dive research trip” to China in October…”Even though an aggressive stimulus program allowed China to sidestep a post-Lehman recession, rendering events there, for a time, secondary to developments in the U.S. and Europe, the Chinese economy could soon take centre stage”, the firm said…

Rainbow Resources, Sandspring  Resources

John has two company charts this morning, the first one on Rainbow Resources (RBW, TSX-V) which is one of our favorite exploration plays and a “no-brainer” at current levels between 15 and 16 cents…Rainbow was essentially a “shell” until it acquired privately-held Braveheart Resources last fall…what the company now holds is a promising package of Silver and Gold properties (the “Big Strike” Project), including the highly prospective International Property (Silver) that was being developed by Braveheart...but Rainbow has much more going for it than just the International Property as we just discovered through some due diligence on the B.C. Energy and Mines web site…we’ll have more on this tomorrow, but 26,000 tonnes at an average grade of 74.53 ounces per tonne (2,113 g/t) produced 2 million ounces of Silver at the company’s Ottawa Property, mainly in the early part of the 1900’s…lead (793,852 pounds) and zinc (28,162 pounds) were also mined along with minor amounts of Copper and Gold…the Ottawa Property is developed on nine levels and has to be considered an excellent geological target as much was likely overlooked by those working the property a century ago…it’s also amazing how much land in the West Kootenay region has gone under-explored over the years, but there are various reasons for that including a general economic downturn brought on by troubles in the forest industry…we see higher Gold and Silver prices as the year progresses and that should translate into even stronger interest in mining and exploration in the area…

John’s chart shows accumulation of Rainbow in the 15 to 17 cent range makes sense given the bullish technical posture of the stock and what we expect will be strong fundamentals…RBW has yet to have its first major “run”, so this we believe is a unique situation…

Note: Jon and John hold positions in RBW (Terry does not)…

Sandspring Resources (SSP, TSX-V) is a quality situation that we have mentioned on occasion but not for a while…Sandspring may have bottomed out around the $1.20 level and is worthy of serious consideration after closing yesterday at $1.42…

Note: John, Jon and Terry do not hold positions in SSP.

Gold has enjoyed a strong start to 2012 though a slight pullback could be in order after some resistance was encountered at the $1,665 level last week…Gold, which is up 8% from its December 29 low, has gained $3 an ounce to begin the new week and is trading at $1,642 as of 6:00 am Pacific…Silver is 6 cents higher at $29.83…Copper is up 2 cents to $3.65…Crude Oil has gained 62 cents to $99.32 while the U.S. Dollar Index is off one-fifth of a point to 81.44…

U.S. stock markets are closed today as the nation pauses to remember the Rev. Martin Luther King Jr. who would have turned 83 this year had a bullet not cut short the civil rights leader’s life…

Asian markets were off by more than 1% today but trading in Europe is generally slightly positive despite Friday’s mass credit downgrade of euro zone countries which was not unexpected…Late on Friday, Standard & Poor’s cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and France, Austria, Malta, Slovakia and Slovenia by one notch each…

The TSX Venture Exchange has climbed in 7 out of the first 9 sessions so far this year…it begins the new trading week at 1536 though volume today will be light due to the U.S. holiday…as we mentioned in our Week In Review, the overall technical health of the CDNX is improving…if we’re correct in that analysis, we’ll see a breakout in the Index through 1575 sometime this quarter and likely within the next month…be prepared first however for the possibility of a test of the “neckline” as John showed in yesterday’s chart which could mean a drop of 3 or 4% from current levels to just below 1500…we would view such a modest pullback, should it occur, as a last-chance buying opportunity before the Index marches higher…we’ll see how things play out…

There are bullish signs as well in the TSX which has broken out above a downtrend line…

Another market we’re looking to for clues with regard to a global stock market recovery is China where the Shanghai Composite Index jumped 5% last week…it gave up 38 points or 1.7% today to close at 2206 but evidence points toward a strong recovery in Chinese stocks…that’s actually a good sign for the Venture Exchange as both markets have a speculative bent to them and have followed similar trading patterns in recent years…below is a chart from John on the Shanghai Index after Friday’s close…

We’ll have more on China tomorrow…

Cap-Ex Ventures (CEV, TSX-V) has closed the second and final tranche of its private placement financing announced December 2…total proceeds raised, at 85 cents, came to $10.2 million…Cap-Ex has made a significant iron ore discovery near Schefferville, Quebec, and more results from drilling late last year are expected in the near future…we like how this story is unfolding…Cap-Ex gained 9 cents Friday to close at 96 cents…

As the week progresses, we’ll be unveiling more individual situations as part of our new “strong play” list and “watch list”…Cap-Ex is one of our “strong plays”…another situation we’re keeping an eye on is Focus Metals (FMS, TSX-V) for which John has a chart update this morning…FMS closed at 81 cents Friday…

U.S. Gold Corp. (UXG, TSX) jumped 62 cents last week and its chart continues to look bullish which bodes well, we think, for the overall sector…below is an updated UXG chart after John’s initial chart Friday…

At BMR, we are long-term Silver bulls.  Silver, which closed Friday at $29.77, is trading about 10% above a very strong support band and is now attempting to break out from the top side of a wedge as John shows in the chart below.  We believe it’s only a matter of time before Silver regains its bullishness after months of consolidation.

There are several several producers we like and we’ll be reviewing them in the near future.  For the more adventurous, our favorite speculative Silver play under 20 cents is little-known Rainbow Resources (RBW, TSX-V) which has a market cap of only $4 million.  We expect Rainbow to make some noise with a promising Silver-Gold land package in the West Kootenay region of British Columbia, particularly if the Venture Exchange heats up this quarter which we now anticipate it will.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than 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.

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TSX Venture Exchange and Gold

The Venture Exchange is showing increasing strength and while a test of the 1500 level can be expected, we’re beginning to see signs that the bear market that started last March is winding down.  We base that statement on a close examination of various charts and careful consideration of fundamental factors.  We’ll present more of our case as the week progresses.  This market still faces some headwinds but we believe that within a month or so, a lot more investors will have turned bullish.  First, let’s take a look at the latest chart for the Venture Exchange which closed up 10 points last week at 1536.

As John’s chart shows, a test of the neckline support just below 1500 is very possible.  The rising 20-day moving average (SMA) currently sits at 1488, so that is certainly a strong support area.  There is significant resistance around 1575.  When the Index pushes through that level, as we expect it will sometime this quarter, that’s when things should really start to heat up.  It makes sense, therefore, to start accumulating some beaten-down juniors that have good prospects over the next 12 months.  We’ll soon be coming out with a list of “strong plays” and stocks to watch.

Trading on the Venture will be light tomorrow as U.S. markets are closed for Martin Luther King Day.

Gold

Gold continues to move as expected with the next major resistance at $1,700 as John’s most recent chart detailed.  Gold closed Friday at $1,640 an ounce, a gain of $23 for the week after advancing $52 the week before.  Gold has had a nice run the last couple of weeks – a modest pullback should be expected and that should open up some good buying opportunities in the Gold stock sector.

Silver jumped $1.02 for the week to $29.77, Copper gained 20 cents to $3.63, Crude Oil fell $2.66 a barrel to $98.70, while the surging U.S. Dollar advanced another one-fifth of a point to 81.46.

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 that won’t end anytime soon (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.

Gold has traded between $1,636 and $1,650 so far today…as of 6:00 am Pacific, the yellow metal is down $11 an ounce at $1,638…a modest pullback is no surprise given the fact Gold has enjoyed its biggest two-week rise in two months…Silver is off 48 cents at 29.77…Copper is down 2 cents at $3.61…Crude Oil is up 37 cents at $99.47 after taking a hit yesterday on reports the European Union’s possible embargo of Iranian imports would be delayed by up to 6 months…the U.S. Dollar Index, meanwhile, is up more than one-third of a point to 81.22…

Hope in the Euro Zone

The European Central Bank said today there were “tentative” signs of economic stabilization in the euro zone as successful Spanish and Italian government bond auctions also pointed to at least a temporary easing of the region’s debt crisis…although Mario Draghi, ECB president, tempered his cautiously optimistic tone by saying that financial market tensions continued to hit euro zone economic activity, markets reacted positively to his comments and the bond auctions…the euro gained almost 1% against the greenback…the ECB’s provision last month of 489 billion euros in three-year loans to euro zone banks had, meanwhile, averted liquidity shortages in the financial system and reduced the risk of a “credit crunch” significantly, Draghi stated…

Italy’s three-year debt costs fell below 5% at the country’s first longer-term bond sale of the year today, though demand failed to live up to the success of a Spanish sale the previous day which points to challenges ahead as Rome tackles a heavy refinancing load in the next few months…

Encouraging Signs In China

Despite a 30-point drop today on profit-taking, it has been a good week for China’s Shangahi Composite Index which is up 5% from its January 6 low of 2133…after falling over 60% since its peak in 2007 (a similar drop to that of the Venture Exchange), the Chinese market could be on the rebound after the country’s premier and securities regulator sought to boost confidence in equities this week and pledged to enact a fresh round of reforms…investors have also been emboldened by speculation that Beijing will allow money and credit growth to accelerate in the coming months, giving rise to a wave of liquidity that could impact the stock market…using standard valuation metrics, China shares are already cheap…the Shanghai Composite Index is trading at a one-year forward price-to-earnings ratio of about 9.3, a whisker above its record low…it’ll be important to keep a close eye on developments in China over the coming weeks…

North American Markets

Dow futures are pointing toward a slightly negative open this morning…the Venture Exchange has posted gains in 7 out of the first 8 sessions this year and closed yesterday at 1540.50, just above its still-declining 50-day moving average (SMA)…there’s strong resistance at 1575 and solid support around 1500…

Gold Bullion Development (GBB, TSX-V) enjoyed a powerful day yesterday, jumping 3.5 cents on total volume (all exchanges) of 1.7 million shares…it appears GBB finally bottomed out at 13 cents in December and if that’s the case, a turnaround in GBB we would argue is also a sign that the Venture Exchange may start to flex its muscles again later this quarter…GBB has been quite a reliable “leading indicator” of the direction of the CDNX over the last couple of years…with a new geological consultant in place (SGS Canada) and a NI-43-101 resource estimate for the LONG Bars Zone due sometime this quarter, 2012 is off to a promising start for Gold Bullion…

John has two charts this morning that provide additional encouragement regarding the “big picture” outlook for Gold stocks…in the first chart, you’ll see how Yamana Gold (YRI, TSX) broke out of an ascending triangle yesterday on high volume…

U.S. Gold Corp. (UXG, TSX) has been in a downtrend since last April but that trend could be in the process of reversing as John shows in this morning’s second chart…