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TSX Venture Exchange and Gold

The Venture squeaked out a 1-point gain last week to close at 1293 but there are signs the coming week could bring a convincing breakout through the 1300 area, allowing the Index to start gaining some important traction.  Markets overall could flip into “risk-on” mode given weekend developments in the euro zone (the $125 billion bailout of Spain’s banks plus movement on the euro bond issue), as well as China, and this would certainly be helpful for the Venture which technically appears poised to move higher.

A reversal to the upside in the 20-day moving average (SMA) for the Venture appears imminent (within the first 3 trading sessions of the coming week).  The last time this occurred was in early January and this was followed by a powerful move that took the Index to a high of 1696 by the end of February.  The 20-day has been in decline since early March and we know what has happened since then – a painful 28% drop from February 29 to the May 16 low of 1215.

John’s latest CDNX chart is quite interesting.  What it shows is that the Index is currently in a 3-Wave “corrective phase” with a short-term Fibonacci target of 1402.  That would be a nearly 10% move from current levels which is a healthy advance that will send some stocks significantly higher than that.  The question is, what happens if and when the Venture makes it to the 1400 level?  The simple answer is that we’ll have to wait and see and evaluate the situation at that point.  It’s quite possible that this A-B-C corrective phase could turn out to be Wave 1 of a 5-Wave Motive Phase. But it’s premature to predict that at this time.

Historically, there is an extremely high correlation between a positive first quarter for the Venture and a positive year overall.  So the fact the Venture posted a first quarter gain tells us, based on historical trading, that a major rebound is very possible after a rather horrible April and May in particular.  In addition, the similarity between the current market and 2005 continues to be striking.  The CDNX bottomed in mid-May, 2005, and climbed 40% from its spring low to its closing 2005 level.  A similar 40% move this year would take the Venture to – interestingly – the 1700 resistance area by the end of the year.  What we’re saying is that while there is risk, there are also plenty of reasons for optimism.  And Gold and Silver are looking strong as well.

Gold

Gold recovered strongly on Friday from an intra-day low of 1565 after a sell-off that started Thursday when Fed Chairman Ben Bernanke refused to dispense the drug of quantitative easing just yet – Bernanke was speaking to a Congressional committee and was keeping his cards close to his chest.  We do believe the Fed will make an easing move at its meeting June 19-20 as the window will start to close soon after that with the U.S. election season swinging into full gear.

The downtrend in Gold since March appears to be over, from a technical point of view, and the COT structure (commercial traders’ very low short positions) strongly supports that interpretation (in addition, the performance of the TSX Gold Index in recent weeks clearly shows a bullish new uptrend in Gold is forming).  As long as central banks around the world continue to flood the system with liquidity, as they are doing and will have to continue to do,  the outlook for Gold has to be considered bullish.

John’s 2.5-year weekly chart shows how Gold has been forming a strong base.  A test of the 200-day SMA and the downtrendline since August of last year is in the works.

Gold finished down $31 for the week at $1,595.  Silver, which is also looking very bullish, lost 15 cents to $28.53.  Copper fell 4 pennies to $3.30, its sixth straight weekly decline.  Crude Oil edged up 87 cents to $84.10 while the U.S. Dollar Index softened by a third of a point to 82.44.

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), money supply growth, 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.  Massive central bank intervention appears increasingly likely to prevent a breakup of the euro zone and to kick-start the global economy.  It’s hard to imagine Gold not performing well in this environment.

Gold is attempting to claw its way back after falling as low as $1,565 overnight…as of 6:00 am Pacific, the yellow metal is down $12 an ounce at $1,576…Silver is 38 cents lower at $28.21…Copper is off 12 cents to $3.29 on fears of poor economic data out of China due tomorrow…Copper is about to post its 6th straight weekly decline, its longest losing streak in two years…Crude Oil has lost $2.28 a barrel to $82.54 while the U.S. Dollar Index is up more than half a point at 82.83…

Today’s Markets

Asian markets were down significantly overnight with the Nikkei falling 2%, though it managed – just barely – to snap its longest weekly losing streak in 20 years…China’s Shanghai Composite lost 12 points to 2281…industrial production, retail sales and inflation data are all coming out tomorrow from China and the traders believe yesterday’s rate cut in China – the first since the 2008/2009 financial crisis – was aimed at pre-empting weak numbers…European shares are lower today while U.S. stock index futures are pointing toward a modestly negative open on Wall Street…

News reports say Spain is expected to request European aid for its ailing banks tomorrow to forestall worsening market turmoil…this would make Spain the fourth and largest country to seek assistance since the euro zone’s debt crisis began…

TSX Gold Index – Chart Of The Day

There are several reasons we’re not concerned by Gold’s drop since yesterday, not the least of which is how the TSX Gold Index has behaved over the last several weeks…the Index has shown strength on days when Gold has not, and appears to be forming a bullish inverted head and shoulders pattern…a mid-May bottom is very obvious on this 6-month daily chart from John, and notice how buying pressure as measured by the CMF is the strongest it has been all year…there are two areas of major support – 310 and 300, so the downside in the Gold Index from current levels is very limited in our view which fits the narrative of a bullish new phase in Gold itself…

Venture Exchange

The Venture Exchange held up very well despite Gold’s drop yesterday, losing just 7 points to 1296…how the Venture behaves over the next week or so will be very interesting to watch…the Index is up 7% since its mid-May low of 1215 while the TSX Gold Index has climbed 20% during that time…an important support zone has been holding for the Venture as John outlines in this 16-session daily chart…

GoldQuest Mining (GQC, TSX-V)

GoldQuest closed at 70 cents yesterday after hitting a multi-year high of 83 cents Wednesday…a technically overbought condition is being cleansed, and that’s always a positive development…we expect to post the second part of our interview with Chairman Bill Fisher on Monday…

Gold Standard Ventures (GV, TSX-V)

Gold Standard Ventures (GV, TSX-V), which we put on our “Watch List” in February, is expected to begin trading on the NYSE next Tuesday under the symbol “GSV“…it will retain its primary listing on the Venture Exchange…

Gold Standard has made a significant discovery in Nevada and could enjoy a stellar second half of the year as more results come in and the company attracts wider attention…the chart for GV is terrific, and a move through resistance around the $3 level would be extremely bullish…

SilverCrest Mines (SVL, TSX-V)

SilverCrest (SVL, TSX-V) is making money and its chart shows steady progression since late 2008 when the stock bottomed at 20 cents…SVL closed at $2.02 yesterday which puts it in between its rising 200 and 300-day moving averages (SMA)…we’re expecting a strong Silver market during the last half of the year, so SVL is definitely worth watching closely…

Note: John, Jon and Terry do not hold positions in GV or SVL.

Gold is up $3 an ounce at $1,623 as of 6:05 am Pacific…Silver is 8 cents higher at $29.51…Copper is up a couple of pennies at $3.42…Crude Oil has gained $1.46 to $86.48 while the U.S. Dollar Index is off slightly at 82.09..

China Cuts Rates, Fed To Act Soon

As we have been speculating, central banks are going to get aggressive in tackling any signs of a significant economic slowdown…China cut benchmark interest rates by 25 basis points this morning to shore up slackening economic growth, its first rate cut since the depths of the 2008/09 financial crisis…the PBOC has cut the required reserve ratio (RRR) for the country’s biggest banks by 150 basis points from a record high of 21.5% in three moves since November last year, after a two-year tightening campaign to rein in inflation and cool steaming economic growth…

Meanwhile, Federal Reserve Vice Chair Janet Yellen yesterday laid out the case for the U.S. central bank to ease monetary conditions further to shield a fragile economy as the euro zone debt crisis intensifies…Yellen’s views carry great weight with Fed Chairman Ben Bernanke, and her comments suggest the Fed may be close to taking more easing steps this month (the Fed meets June 19-20) in response to ongoing housing problems, a weak jobs market and the overall global macro economic picture…

Bernanke, himself, will be speaking on the economic outlook in testimony to Congress this morning though he may keep his cards close to his chest in advance of the Fed meeting…

Today’s Markets

Asian markets were mostly higher overnight though China’s Shanghai Composite fell 16 points (prior to the rate decision) to 2293…European stock markets have extended gains this morning after the Spanish government sold more debt than it had targeted in a keenly watched auction, while stock index futures in New York suggest a positive open for Wall Street…

The Bullish Big Picture

This morning, we’re taking a broad look at the improving technical picture for Gold, Silver, the CDNX, the Canadian dollar and the euro…what this tells us is that the world is not about to come to an end anytime soon – in fact, at the very least, a strong rally in the markets appears much more likely as summer approaches – precisely at a time when most brokers are hiding under their desks and many investors are or have been too scared to pick up bargains because of mainstream media fear-mongering…

Gold

Gold has broken above its downtrend line and could really pick up steam over the summer like it did the last couple of years, especially if the Fed gets more aggressive on the easing side which seems more likely than ever now…the positioning of the Slow Stochastics in John’s chart below (among other indicators0 confirms the bullish trend…

Silver

Silver is really gathering momentum after becoming quite oversold in mid-May on the 6-month daily chart below…what we’re likely to see now is Silver outperforming Gold like it did during the first quarter of the year…

Important note…the COT structure for both Gold and Silver at the moment is VERY bullish – commercial traders have sharply cut back their short positions to levels not seen in quite some time…this kind of a set-up almost always precedes a major upside move in these markets…

TSX Venture Exchange

Important support has held for the CDNX which closed above the 1300 level yesterday after a 17-point gain on increased volume…a reversal to the upside in the 20-day moving average (SMA) by next week is appearing more certain now which will add fresh fuel to the fire…in short, the CDNX is showing signs it’s about to gain some traction…Gold and Silver should lend some support…

Canadian Dollar

May was a horrible month for the Canadian Dollar but the technical outlook is improving…this is good news as the Canadian stock markets often move in tandem with the Dollar…watch for a possible summer breakout above the blue line resistance…

Euro

The battered euro seems to have found support, and being on the short side of this trade right now might not be such a smart idea…short-covering alone in the near future could give the euro a significant lift…this is positive for Gold and negative for the U.S. Dollar…

Gold is shooting higher today…as of 6:00 am Pacific, the yellow metal is up $17 an ounce at $1,634…Silver is 84 cents higher at $29.37…Copper is up 3 pennies at $3.37…Crude Oil is off its high of the day but has gained 43 cents to $84.72 while the U.S. Dollar Index is flat at 82.79…as John has shown in a couple of recent charts, the Dollar Index has stiff resistance to overcome between 83 and 83.56 – so it could back off and consolidate for a period of time which is bullish for precious metals…

Silver

The technical set-up for Silver right now is looking VERY bullish which bodes well for many of the Silver plays we like including, of course, Rainbow Resources (RBW, TSX-V) which will soon be drilling into known high-grade massive galena at its International Property in the West Kootenays, and potential high-grade Silver mineralization at Gold Viking – two former producers never previously drilled…the geological models are as favorable for Rainbow as they were for GoldQuest…

John’s 6-month daily chart below shows how Silver bottomed out in mid-May, and how the RSI and CMF are both pointing toward an attempt at a near-term breakout…this could be a sizzling summer for Silver, especially if the central banks around the world do what we think they will do and that’s print money faster than rabbits can make bunnies…

WildCat Silver (WS, TSX)

On the topic of Silver, intense selling pressure in Wildcat Silver (WS, TSX) since February has dissipated and a May bottom likely occurred in the stock at 78 cents as outlined in John’s chart below…not shown in this chart, and what’s very interesting, is that WS’s 1,000-day rising moving average (SMA) at 80 cents provided support…Wildcat is working on a very promising Silver project in Arizona (Hermosa) and both traders and longer-term investors will want to examine this chart closely as part of their due diligence…

Today’s Markets

Asian markets were up strongly overnight with the exception of China’s Shanghai Composite which was weighed down by property shares and fell 2 points to 2310…Europe is higher this morning while stock index futures in New York are pointing toward a positive open on Wall Street…

The European Central Bank left interest rates at 1%t today, not surprising since most market observers were expecting the ECB to save its ammunition for July – following the June 17 Greek election and the European leaders’ summit at the end of the month…the ECB pledged this morning, however, to extend some of its liquidity providing operations to help financial markets cope with the effects of the euro zone’s debt crisis…

Fed watchers await the words of Fed Vice Chair Janet Yellen, who speaks in Boston tonight, and Fed Chairman Ben Bernanke who testifies tomorrow morning before the Congressional  Joint Economic Committee…

Wisconsin Governor Survives Recall Vote

In a victory for fiscal conservatives, which will likely have implications for the November presidential race, Wisconsin Governor Scott Walker – on a strong austerity push – successfully overcame a recall vote that would have removed him from office…this provides hope there is still an appetite among Americans to embrace traditional American values of limited government and sound fiscal management…

By the way, the most pessimistic economic assumptions from the Congressional Budget Office (CBO) yesterday show that America’s debt could hit 2.5 times GDP in 2035 which creates an economic scenario so dire that the CBO’s forecasting model actually breaks down…

Probe Mines (PRB, TSX-V) and Kirkland Lake Gold (KGI, TSX)

Two more charts from John show how May also likely marked important bottoms for Probe Mines (PRB, TSX-V)  and Kirkland Lake Gold (KGI, TSX)…

We’re expecting a flurry of M&A activity in the mining sector over the next year or two, and Probe Mines could certainly be a target with its multi-million ounce Borden Lake deposit…

Probe Mines (PRB, TSX-V)

Kirkland lake Gold (KGI, TSX)

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

After one of the best drill holes from a Canadian junior explorer in recent years, GoldQuest Mining (GQC, TSX-V) has rocketed from just 7.5 cents to as high as 82 cents over the last nine trading sessions in a great example of how perseverance, geological savvy and a little luck can lead to a potential major discovery.  More needs to be known about what GoldQuest may have hit at its Las Tres Palmas Project in the Dominican Republic, but there’s no question GQC and hole LTP-90 have grabbed the market’s attention.

On Monday, GoldQuest chairman Bill Fisher granted his first interview on the discovery to BMR which has been following GQC closely since 2010.  Click on the link below to listen to Part 1 of this interview.

BMR June 4 Interview: GQC Discovery With Bill Fisher

Note: No compensation was paid by GQC for this interview in accordance with BMR policy.  Please read our disclaimer.  As always, perform your own due diligence.  Our stock coverage is for informational and entertainment purposes only and must NOT be viewed or interpreted as “buy”, “sell” or “hold” recommendations.

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 and Silver markets 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 and Silver 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. 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. 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,

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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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Gold has traded in a narrow range between $1,612 and $1,621 so far today…as of 6:10 am Pacific, the yellow metal is down $5 an ounce at $1,613….Silver is 9 pennies higher at $28.35…Copper is flat at $3.34…Crude Oil is up 23 cents at $84.21 while the U.S. Dollar Index has gained nearly half a point to 82.93…

Today’s Markets

Asian markets were up modestly overnight while European shares are mostly lower this morning as investors continue to evaluate the euro zone crisis and weigh the uncertain prospects of decisive stimulus steps from G7 policymakers…Spanish troubles returned to the fore after Treasury minister Cristobal Montoro said the euro zone’s fourth biggest economy was shut out of the credit markets…stock index futures in New York as of 6:10 am Pacific are pointing to a slightly higher open on Wall Street…

Finance ministers and central bank governors from the Group of Seven leading industrial nations are holding a conference call today to discuss the financial crisis in the euro zone and its implications for the global economy…the conversation is likely to see renewed pressure from the U.S., Canada and Japan for action from euro zone countries to finance the recapitalization of weaker banks, and increase their firewall to prevent any contagion within the European currency union…

Euro Zone Private Sector Activity Slows

Private sector activity across the 17-nation euro zone contracted at its fastest pace in three years last month, according to the final May reading of the Markit euro zone composite purchasing managers’ index (PMI) released today…composite PMI fell to 46.0, up slightly from a preliminary reading of 45.9, but down from 46.7 in April… the final May services PMI reading fell to 46.7 from 46.9 in April…a reading of less than 50 indicates a contraction in activity…

“Based on these numbers, it would not be surprising to see GDP for the region contract by 0.5% in the second quarter, though an even steeper decline could be seen if the June data disappoint,” said Chris Williamson, chief economist at Markit…

U.S. Dollar Chart

The U.S. Dollar Index, which may have made an important intra-day reversal last Friday, is up significantly this morning but has a strong resistance band to overcome between83 and 83.56…a near-term consolidation definitely seems to be in the cards as the greenback needs to step back and catch its breath after a powerful run over the last several weeks…this bodes well for Gold which should be able to resume its climb after a brief rest following Friday’s huge jump…

Venture Exchange

The Venture gave up 13 points yesterday but on very low volume, and the Index also stayed within a support band as it closed at 1278…below are a couple of charts from John (the second one is for one of our readers who posed a question to John yesterday)…

CDNX Chart #1

CDNX Chart #2

GoldQuest Mining (GQC, TSX-V)

Jon interviewed GoldQuest Chairman Bill Fisher for nearly 30 minutes yesterday at the Vancouver Resource Conference – Fisher’s first interview since the company’s May 23 announcement of a potential major discovery at its Las Tres Palmas Project in the Dominican Republic (231 metres grading 2.4 g/t Au and 0.44% Cu)…we’ll be posting that audio interview, perhaps in two parts, over the next couple of days…Fisher, who’s highly respected in the industry, is being very careful not to “over-hype” this hole and GoldQuest has been extremely transparent in its disclosure…he admits, however, “You don’t get holes like this very often…this is probably, as far I can tell, the best drill hole in the world in the last 18 months…this thing could be a big one or it could fizzle out in the next six weeks”…

Here are some excerpts from the interview…Fisher said drilling resumes today at Romero (only the discovery hole in this area has been drilled so far, and it was terminated in mineralization, so the system is open in all directions)…

“All the other deposits in the district are flat-lying…so we’re rather hoping it’s flat-lying…if it’s up on end,  it could be much thinner…but let’s just hope it’s what it looks like to us at this time”…

“We’re going to step out 25 metres in each direction which is only 10% of the length of this hole…so this will give us a sense of geometry…we’d like to think it’s flat-lying but if the thing is, say, at 45 degrees, we’ll find out within the next two to three weeks the orientation of this deposit, whether this very impressive thickness is actually true or that we’ve just drilled down sideways into something…I want to satisfy those basic questions before we start stepping out looking for size…I just want to make sure that geologically we understand what’s going on, and that will help us in making our drill program…we’ve raised some money, we’ll do a short program, and then at that point we’ll announce what the larger program might be”…

“This initial hole is about the same length and grade of contained metals as the discovery hole in Aurelian Resources in Ecuador, and that deposit eventually had the best drill hole in history and was sold to Kinross for $1 billion”…

“What’s striking about the Romero hole, virtually every intersection, every 2 metre intersection, has Gold in it…some of them are much higher but statistically they are well within a single deposit type…we’re not seeing very high grade narrow intervals which you can smear over big areas, and we’ve worked very closely with the TSX market surveillance to make sure they were comfortable we were reporting this correctly”…

On the financing:  “A key thing of it was, there was probably a lot more money available, so we didn’t take all the money off the table…that meant there has been a very substantial after-market”…

Due in part to Fisher’s previous success with Aurelian and GlobeStar (both were bought out), GoldQuest is attracting considerable institutional interest (as well as retail of course) which could help power the stock much higher if future results continue to be very favorable…the discovery is great news for the entire market and shows that even in a down market, companies that make discoveries are going to be rewarded which is why at BMR we’ve focused a lot recently on imminent possibilities in the West Kootenay region (Rainbow Resources, RBW, TSX-V), Nevada and other favorable jurisdictions where some hard-working companies with strong geological teams have great opportunities…as GQC has demonstrated, the potential leverage available to an investor in a good exploration play is incredible…John Kaiser made this point very well at the Vancouver Show – we could be entering a period where some hard work in recent years in the industry pays off with a series of exciting discoveries…

Cadillac Mining (CQX, TSX-V)

Cadillac Mining’s (CQX, TSX-V) GoldStrike Project in Utah has excellent potential, as we have been reporting for over a year, and this was confirmed by initial drill results in late February…accumulation has picked up again in CQX in advance of the next set of results with the stock gaining 9 cents yesterday to close at 24.5 cents…

Below is an updated CQX chart from John…

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

Gold is holding quite steady after Friday’s huge gains…as of 5:50 am Pacific, the yellow metal is down $8 an ounce at $1,618…it has traded as high as $1,630 and as low as $1,614…Silver is 35 cents lower at $28.33…Copper is flat at $3.34…Crude Oil, at an 8-month low, is off another 84 cents a barrel to $82.39 while the U.S. Dollar Index is down one-quarter of a point to 82.77…

Gold’s nearly $100 reversal since Friday is a clear indication that another round of quantitative easing from the Fed could be just around the corner (the Fed meets June 19-20 and will want to act now, not a couple of months before the U.S. elections) along with a resumption of the ECB’s LTRO’s…all signs are that the global economy is weakening, and at a very bad time for the euro zone in particular…the ECB meets on Wednesday…on Thursday, Feds Chairman Ben Bernanke testifies on the economy before a Congressional committee…

Euro Twilight Zone

The euro zone is likely to come up with a plan for deeper economic integration by the end of the year, after agreeing on what elements it should include and how to achieve it in June, the chairman of European Union leaders’ meetings said this morning…Herman Van Rompuy told a news conference in St Petersburg, Russia, that by the next summit of EU leaders at the end of June he and three other top EU officials would present “the main building blocks for this deepened economic and monetary union” and “a working method to achieve this objective”…

Of course, in theory, a more integrated European Union may seem sensible and achievable but what’s the reality of that occurring in a short time frame when a very imperfect EU was created in the first place?…having one government with its act together is a challenge…can 17 governments actually pull something together?…that certainly remains to be seen…one thing is for sure, however…the ECB is going to have to step in buy time for any plan of deeper euro zone integration, and that’s going to take the biggest fire hose the world has ever seen…

Today’s Markets

Asian markets were down sharply overnight, reacting to Friday’s sell-off on Wall Street, while European shares this morning have rebounded off their lows…stock index futures in New York as of 5:50 am Pacific are pointing toward a flat open on Wall Street…the Dow has declined in 18 out of the last 22 sessions, falling more than 1,000 points during that time, with Friday being the worst day of the year so far with a nearly 300-point drop…

The Venture Exchange, on the other hand, has outperformed the broader markets over the past couple of weeks which is a positive sign…technically, it’ll be important for the Venture this week to gain some more traction and climb back above 1300…

GoldQuest BMR Interview

GoldQuest Mining’s (GQC, TSX-V) Bill Fisher has agreed to an interview with BMR this afternoon at the Vancouver Resource Show…it was standing-room only at the GQC 10-minute presentation yesterday as Fisher reviewed the company’s discovery hole at its Las Tres Palmas Project in the Dominican Republic…drilling is expected to resume tomorrow…institutions continue to gobble up GoldQuest stock and could push it even higher today after Friday’s 74-cent close…the significance of this discovery was quite evident in the GQC financing announced last week which was a bought deal with no warrants, something almost unheard of these days…

We’re looking forward to the conversation later today with Fisher who was last interviewed by BMR just over a year ago…

The interview with Fisher is certainly a coup for BMR, but it seems we’ve been “scooped” by another newsletter this morning with regard to Rainbow Resources (RBW, TSX-V) as Rainbow President David W. Johnston has confirmed with the Junior Gold Report that the company has discovered graphitic outcrops on both of its large claim blocks in the Valhalla Metamoprhic Complex…we do expect that regional graphite play to heat up over the summer, especially if Eagle Graphite were to secure a deal to go public or if a private equity fund steps in which is rumored to be possible…meanwhile, as Rainbow disclosed Friday, drill permits for its Gold Viking and International properties are “imminent”…the turning of the drill could really get things going with RBW as the month progresses…

Chart Updates – GR, ATC, KAM, AZ and GIX

John has chart updates this morning on five quality situations that have bounced significantly off their mid-May lows – Greenlight Resources (GR, TSX-V), ATAC Resources (ATC, TSX-V), Kaminak Gold (KAM, TSX-V), Armistice Resources (AZ, TSX) and Geologix Explorations (GIX, TSX)…we particularly like Greenlight which has performed well this year and has a market cap of under $5 million after closing Friday at 13 cents…the company, with exploration projects in Atlantic Canada, is led by Chris Anderson who we consider to be a rising star in the industry….he was seen yesterday at the Vancouver Resource Show in discussions with John Kaiser and Brent Cook…

To aid our readers’ due diligence efforts, below are charts for GR, ATC, KAM, AZ and GIX…

Greenlight Resources (GR, TSX-V)

ATAC Resources (ATC, TSX-V)

Kaminak Gold (KAM, TSX-V)

Armistice Resources (AZ, TSX)

Geologix Explorations (GIX, TSX)