BullMarketRun.com

TSX Venture Exchange & Gold

Central banks are investors’ best friends right now.  With major indices around the globe performing so well, including the Dow which is now just 200 points off its all-time high, it’s just a matter of time before money starts flowing back into the speculative Venture Exchange.  For the first time since August, the Venture’s 30 and 40-day moving averages (SMA’s) are rising in tandem and providing strong support slightly below Friday’s close of 1228.  The Venture gained 2 points for the week and continued to base between 1220 and 1240 as shown in John’s chart below.

Technically, the upcoming week will be an important one for the Venture with the strong possibility of a reversal to the upside in the 50-day SMA.  Since the onset of the bear market in March, 2011, we have seen only two such reversals – very early in 2012, which led to a sharp advance to the 1700 level during the first quarter, and again last summer when the Venture climbed nearly 200 points from the beginning of August to the end of September.  While following the Venture recently has been akin to watching paint dry, this drawn-out basing action is creating the foundation for a significant move higher that can be sustained.  Investor patience is key.  It was generally the wrong time to be a buyer in this market in late 2010/early 2011 when everyone was in the game, chasing stocks higher – even companies with nothing more than cow pasture.  Now’s the right time to be a buyer because sentiment is at such a low level, and the buying stampede has yet to begin.

Gold

We’ve noted before that the commercial traders are seldom wrong, and last week they cut their short positions to an extent that the COT chart is now the most favorable it has been since last August – just prior to the sizeable rally in bullion.  We could still see some more choppiness for a little while longer, but Gold has exceptionally strong support above $1,600 and that’s critical.

Silver gained 66 cents to $31.84.   Copper surged 11 cents to $3.75.  Crude Oil jumped $1.89 a barrel to $97.77 while the U.S. Dollar Index slid half a point to 79.21, leaving it just above a critical support area.  A technical breakdown in the Dollar Index appears almost certain this quarter given a classic head-and-shoulders top formation.

As usual, we’ll be posting John’s short-term and long-term Silver charts Monday morning.

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.  QE3 has arrived, and massive central bank intervention is now taking place to keep the euro zone intact and to kick-start the global economy.  It’s hard to imagine Gold not performing well in this environment.

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

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 has traded between $1,660 and $1,683 so far today…as of 7:30 am Pacific, the yellow metal is up $6 an ounce at $1,670…Silver is 31 cents higher at $31.78…Copper is up 2 pennies to $3.72…Crude Oil is off slightly at $97.36 (WTI is headed for its eighth straight weekly advance, its longest weekly winning streak since 2004) while the U.S. Dollar Index dipped briefly below critical support at 79 but is now up slightly at 79.14..

Today’s Markets

The Dow briefly cracked the 14,000 barrier this morning…as of 7:30 am Pacific, the Dow is up 119 points at 13980…the TSX has climbed 74 points to 12759 while the Venture Exchange has added 6 points to 1228…European shares are strong today while Asian markets were mixed, though China’s Shanghai Composite gained another 34 points to 2419…China’s official Purchasing Managers’ Index (PMI) eased to 50.4 in January, the National Bureau of Statistics said today, missing market expectations for a rise and underscoring the fragility of the recovery from the economy’s weakest year since 1999…however,  a separate private survey showed that growth in China’s giant manufacturing sector hit a two-year high in January as domestic demand strengthened…

Retail Investment Demand For Silver Strong

Kitco reports that retail investment demand for Silver has been strong, according to Deutsche Bank…analysts say some price support is due to lower production growth after some project cancellations and deferrals…“Nevertheless, what is striking is the apparent demand on the retail level for physical Silver, whether it is direct via coin orders from domestic mints or indirect via physically backed silver ETF’S…this demand has remained strong despite the apparent rotation by many investment managers from risk-aversion or safe-haven assets into risky assets over the past year or so”…analysts point out that the U.S. Mint reported its highest monthly sales ever in January…the Mint’s web site currently lists them at 7.498 million ounces…“Furthermore, we note that total holdings of Silver by ETF’s have reached another high,” the bank stated….“We expect that the constructive bias by private (and largely U.S.) investors towards Silver may reflect a longer-term concern with respect to the domestic economy, its perceived fragility and the considerable financial imbalances (rising debt) which threaten it longer term”…

U.S. Dollar Index Chart Update

The Dollar Index is critical to watch at the moment – there are obvious potential implications for both Gold and the Venture Exchange – given the increasing likelihood that the Dollar in the near future is about to break below key support…the Index has formed a classic head and shoulders top and now faces the prospect of crashing through the neckline as shown in John’s 2.5-year weekly chart below…down momentum is increasing and RSI(14) has plenty of room to move lower…

Updated Euro Chart

Another reason for a further decline in the Dollar Index is continued strength in the euro which has broken above resistance at $1.35…John first called a bottom in the euro last summer and a further move higher after a breakout above a classic cup-with-handle pattern…next major resistance for the euro is at $1.40…

U.S. Non-Farm Payrolls Increase 157,000

U.S. employment grew again in January but not at a pace to be able to lower the jobless rate, which gave Gold an initial lift today…non-farm payrolls rose 157,000 for the first month of 2013 while the unemployment rate edged higher to 7.9%, news that keep the printing presses running overtime at the Federal Reserve…economists were looking for 160,000 net new jobs created with the unemployment rate holding steady at 7.8%…the ho-hum jobs numbers for January were accompanied, however, by substantial revisions higher for previous months, according to the report from the Bureau of Labor Statistics…November’s numbers rose from the originally reported 161,000 to a robust 247,000, while December was pushed upward to 196,000 from 155,000…

U.S. Consumer Sentiment Improves

U.S. consumer sentiment unexpectedly improved in January as Americans felt Washington’s deal to avert the “fiscal cliff” at the beginning of the year boded well for the economy, a survey released this morning Friday showed…the Thomson Reuters/University of Michigan’s final reading on the overall index of consumer sentiment rose to 73.8 from 72.9 in December, topping economists’ forecasts for 71.5…

Madalena Ventures (MVN, TSX-V)

Recently, we introduced an interesting oil and gas play – Madalena Ventures (MVN, TSX-V) – which has performed quite well and has now broken out above a cup-wth-handle pattern…below is a 2.5-year weekly chart from John…MVN recently completed the acquisition of Online Energy Inc. (ONL, TSX-V), adding an important revenue stream to the company…as always, perform your own due diligence…MVN is unchanged in early trading today…

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