BullMarketRun.com

TSX Venture Exchange and Gold

While the broader equity markets continue to push higher, with the S&P 500 surpassing its closing high of 1565.15 last week and recovering all its losses from the financial crisis, the Venture continues to struggle and fell for the 8th consecutive week to close the month of March – the first time in 13 years the Venture has fallen each week during both February and March. While the Dow recorded its best first quarter performance in 15 years, the Venture posted its second-worst Q1 in 13 years with a decline of 10% (only Q1 in 2008 was worse with a nearly 13% loss, but that was mostly the result of a steep broad market sell-off in January).

Sentiment levels regarding the Venture closely parallel those of Gold which has posted back-to-back quarterly losses for the first time since 2001.  Almost no one is left to turn bearish on Gold, and the same could probably be said of the Venture.  That’s not to say both couldn’t drop a little lower from current levels (Gold has excellent support around $1,550 while the Venture has strong support in the low 1090’s and also in the 1020’s at the summer 2009 low).  But a recovery during this second quarter seems likely, especially considering historical trading patterns (the average gain in the HUI in the month of May between 2001 and 2012, for example, has been nearly 7%).

Below is an updated 5-year weekly Venture chart from John.  The down trendline must be broken before investors will have confidence that a true reversal or a sustained move to the upside is underway.  In the meantime, the Index may simply “crawl along the bottom” for a while longer or we could even see a capitulation move down to 1027 support.  The RSI(14) divergence with price is a positive sign and gives us hope that a turnaround is not far off.  Patience is the key.  Keep in mind that out of the deepest despair the biggest up-legs are formed.  While there’s a lot of junk on the Venture and several hundred companies that should simply disappear, there are also legitimate opportunities that could post big percentage increases this year from current depressed levels.  The trick, of course, is to separate the wheat from the chaff.

Gold

Gold continues to show little conviction one way or the other at the moment, hovering around the $1,600 area.  For the week, bullion declined $11 an ounce to close the month and the quarter at $1,598.  The support band between $1,550 and $1,600 is quite strong, aided in part by physical buying out of Asia and emerging markets.  It’s actually encouraging that Gold is holding above $1,550 in the face of the selling pressure that kicked in very early this year after a long period of steady buying pressure.

Silver fell 47 cents to close at $28.30.  Crude Oil posted its fourth straight weekly gain, climbing $3.78 a barrel to $97.23 – its highest level since mid-February.  Copper fell to important support at $3.40 while the U.S. Dollar Index gained more than half a point to 82.98.

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), a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, 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.  In the current environment, it’s hard to imagine Gold dropping below key support around $1,500.

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.

The last several months have not been easy times for most investors in Gold, Silver and junior resource stocks in general.  But rest assured, that will change.  No one can say for sure exactly when – but there are better days ahead.  That’s one message of hope.  And we have another as Easter Sunday arrives.

As exciting as it is to see our favorite stock explode to the upside, or as gut-wrenching as it is to see our portfolios shrink during the most recent weakness, we should never let money or our stocks control our happiness or joy.  And true happiness – lasting joy – can only be found in our view by knowing God and serving Him through His son, Jesus Christ, who died on the cross for us on this day over 2,000 years ago.  Of course, on the third day, He rose from the dead in The Greatest Victory Of All.   Easter is not about the bunny rabbit or chocolates or the Easter egg hunt or enjoying a day off work.   It’s about what Jesus did at Calvary – he suffered for us, and for a reason.

Nothing is more important in our view than one’s relationship with God through Jesus.  He is the creator of all things and has also provided us, through His precious Word, all the guidance we need for our daily lives, even how we should approach the handling of money and investment matters.

This Easter weekend is a great opportunity for each of us to put some time aside and reflect on what Easter is really all about and why we celebrate it.

We wish all of our readers a very special and joyous Easter.

By Terry Dyer

Have you ever asked someone a question and then also asked, “Do you want the good news first or do you want the bad news first?”

I took my car into the garage one day to have the brakes done.  When the technician called me with the quote he asked me that very question, “Do you want the good news or the bad news?”  He told me that the brakes were only going to cost me $500 but in the next breath he told me that my ball joints needed replacement.  The good news and the bad news.  This Easter we look at both.

Let us look at the bad news first.  We all have sinned and fallen short in the eyes of the Lord (Romans 3:23, New International Version) and since we have sinned we are destined to die “for the wages of sin is death” (Romans 6:23).  We are all sinners and death is our payment for our sin.

When someone offers employment to an employee he offers him a set amount of money to work for him.  Maybe twenty dollars an hour for every hour that employee works.  It is a contract.  It is also a contract when you break the law.  If you are driving your car and you do not stop at a stop sign a police officer will write you a ticket and you will have to pay a set fine.  It’s a penalty for not stopping at the stop sign.  This is true in God’s world as well.  When we sin we are destined for spiritual death.  It is both the wage and the penalty.  Sin is awarded death.

Some may ask what is spiritual death?  Spiritual death is an eternal separation from God.  In the Gospel of Luke, chapter 13, we are told that there will be weeping and gnashing of teeth.  In the book of Revelation we are told that death and Hades were thrown into the lake of fire.  Spiritual death is a bad place to be in and we are told that we are all destined for this.  The apostle Paul writes, “For all have sinned and fall short of the glory of God” (Romans 3:23, NIV).  That is the bad news.  We are all sinners and by the sin that we commit we are destined for Hell.  It doesn’t get any worse.

But wait – there is still the Good News.  Jesus came to the earth fully man and fully God.  When Jesus willingly went to the cross He carried the sin of the world, past, present and future, so that those that believe in Him will be saved from an eternity of death, pain, anguish, and separation from God.  “For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.  For God did not send his Son into the world to condemn the world, but to save the world through him.  Whoever believes in him is not condemned, but whoever does not believe stands condemned already because they have not believed in the name of God’s one and only Son”(John 3:16-18, NIV).

Jesus paid the price for your sin, for my sin, and for the sin of the world.  All you have to do is accept Him, put your faith in Him and allow Him to be Lord of your life.  Turn away from the world, your old ways, and toward Jesus.  It doesn’t matter what you have done with your life up until now.  There is no sin too big for Jesus.  All one needs to do is say with a heart of repentance, “I am sorry, Jesus, for what I have done.  Today I ask you into my life. Come and make me whole. I turn toward you.”

This Easter I invite you to accept Jesus into your heart or to renew your commitment to Him.    If you have never prayed to Jesus take a moment now and turn your heart to Him.  If you already know Jesus but want him in your life in a greater way, then by all means pray for that too.  Invite Him into your life in a bigger way.

From all of us here at BMR I would like to wish you a very Happy Easter.  May your day be full of love and blessings.  I thank you for your support of BMR as we strive to be of service to you.  From my home to your home, Happy Easter.

Terry Dyer

Publisher/Owner, Langley, BC

There is relative calm in Cyprus today, as banks have re-opened with tight capital controls after being closed for nearly two weeks, so equity markets are breathing a sign of relief on this final trading day of the quarter while Gold struggles to stay above the $1,600 level…as of 7:25 am Pacific, bullion is down $7 an ounce at $1,598…Silver is off 12 cents at $28.57…Copper has fallen a penny to $3.44…Crude Oil is up 11 cents at $96.68 while the U.S. Dollar Index has retreated nearly one-third of a point to82.93…

Gold, down just over 4% this quarter, is set to post its first back-to-back three-month losses since 2001…holding in ETP’s contracted 6.9% this quarter…the Gold price would have declined more in this first quarter if it weren’t for strong physical buying out of Asia, in particular China…the fact China continues to accumulate aggressively on weakness below $1,600 has to be considered long-term bullish…

This is a shortened version of BMR Morning Market Musings due to the upcoming Easter long weekend…we wish each of our readers a wonderful Easter…our Week In Review And A Look Ahead will be posted Saturday, while Morning Market Musings resumes Monday…

Today’s Equity Markets

Asian markets were weaker overnight with the Japan’s Nikkei average falling 1.3% to close at 12336…for the quarter, however, the Nikkei gained an astonishing 19%…China’s Shanghai Composite was hit hard overnight, losing nearly 3% to finish at 2236 (down 1.3% for the quarter)..the country’s banking regular unveiled new controls on wealth management products in order to reduce risk…European shares are up modestly in late trading overseas…in North America, meanwhile, the S&P 500 has a good chance to finally post a new all-time closing high today (the record closing high from October, 2007, is 1565.12 while the all-time intra-day high is 1576.09)…as of 7:25 am Pacific, the S&P is up 1.64 points at 1564.49…the Dow, on track for an 11% gain this quarter – the best first quarter in 15 years – is up another 32 points at 14558…the TSX is off 41 points through the first 55 minutes of trading while the Venture is relatively flat at 1097…

U.S. Economy Expanded at 0.4% In Q4

Stronger business spending boosted still-slow growth in the U.S. in the final months of 2012, suggesting that companies are looking to expand despite uncertainty in Washington…the nation’s gross domestic product, a measure of all goods and services produced in the economy, advanced at a 0.4% annual rate between October and December, the Commerce Department reported this morning…economists were expecting an increase of 0.5%…the reading was the third for the fourth quarter of 2012 and was revised upward from last month’s reading of 0.1% growth…the initial report said GDP contracted slightly…last quarter’s GDP gain is the second-weakest reading since the current recovery began in the last half of 2009…the economy has now grown for 14 consecutive quarters…for all of last year, GDP advanced 2.2%…there are signs the economy has strengthened in 2013, with the housing market showing further improvements and the nation’s unemployment rate dropping…

Meanwhile, the number of Americans filing new claims for unemployment benefits rose more than expected last week, but probably not enough to suggest the labor market recovery was taking a step back…initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 357,000, the Labor Department said this morning…still, they remained in the middle of their range for this year…

Canadian Economy Grows At 0.2% In January

Statistics Canada reported this morning that the Canadian economy expanded by 0.2% in January, driven by manufacturing and reversing the contraction of 0.2% in December…yesterday, economists at Bank of Nova Scotia projected economic growth in Canada of just 1.6% this year, but 2.4% in 2014…they also forecast that the jobless rate won’t dip below 7% until next year…Scotiabank’s deputy chief economist, Aron Gampel, cited challenges in Canada related to housing and oil…

TSX Composite Index Chart Update

After a strong December and January, TSX momentum has been waning and a key support level to watch is 12600…below is a 2.5-year weekly chart from John…the likelihood of at least a modest pullback in the early part of Q2, which could open up some very attractive buying opportunities, has increased…the overall long-term trend, however, remains bullish and includes a rising 300-day moving average (SMA) around 12200…

Ainsworth Lumber Co. (ANS, TSX) Updated Chart

Red-hot forestry stocks are beginning to cool off, as predicted, and better entry points are possible during the second quarter based on seasonal fluctuations and as current overbought technical conditions unwind a little more…investors at the moment are quick to pounce on any dips as evidenced by the action in Ainsworth Lumber (ANS, TSX) yesterday…it fell as low as $3.72 intra-day, hitting John’s first Fibonacci level, and then rebounded to finish the day up 12 cents at $3.99…we’ll look at some more lumber stocks next week and levels that would look attractive on a sector correction…

Skyharbour Resources Ltd. (SYH, TSX-V) Chart

One of the companies trying to take advantage of the Patterson Lake South uranium play is Skyharbour Resources (SYH, TSX-V) which has enough cash in the bank at the moment (approximately $900,000) and seven early-stage properties totaling 400,000 acres to get the ball rolling as 2013 progresses…from a purely technical perspective, there is an opportunity here for speculative investors with the share price trading at 6.5 cents…note the 2-year downsloping flag on John’s 2.5-year weekly chart…a test of that resistance appears likely at some point over the next few months, and a breakout above it would of course be very bullish…as always, perform your own due diligence…

Note: John, Jon and Terry do not hold share positions in ANS or SYH.

Gold is back above $1,600 after trading as low as $1,590 overnight…as of 7:15 am Pacific, bullion is up $8 an ounce at $1,607…Silver is 9 cents lower at $28.67…Copper is off 2 pennies at $3.43…Crude Oil has lost 61 cents to $95.73 while the U.S. Dollar Index is up over one-third of a point at 83.29…

Gold Demand/Supply Numbers

Total private investment holding for Gold fell 4.8% in 2012 versus 2011, reflecting the increased sensitivity of Gold market investors toward the price of the metal, a New York-based consultancy (CPM Group) has reported…demand from private investors fell 2 million ounces from the 2011 level, to 38.7 million ounces in 2012…while this is down from 2011 levels, it’s the fourth-largest annual increase in estimated net private investor holdings of Gold on record, which date back to the 1950s, said CPM Group…“A historically large number of investors remained interested in buying Gold in historically high volumes, but they were unwilling to do so when prices rose…instead they waited to step in as buyers each time prices softened last year”,  the firm said in its annual “Gold Yearbook” report…CPM Group said while concerns for the global economy remained, the fears about an imminent collapse of the global financial system eased off…buyers now seemed to be interested in “buying Gold as a long-term protection in the face of what seems more likely to them now to be long-term economic stringencies”, the firm said…

The global supply of Gold fell in 2012 but is expected to rise in 2013, CPM Group also reported…their estimate is that overall refined Gold supply declined 0.6% in 2012 to 119 million ounces…“The decline in total supply was driven by reduced mine production in market economies and lower exports from transitional economies”, CPM Group said…“An increase in Gold secondary recovery from old scrap curbed the decline in total Gold supply during 2012″…the consultancy listed market economy mine supply at 71 million ounces in 2012, down from a record 71.9 million in 2011…this came after three straight years of increases…the region with the strongest net increase was in Asia, with supply rising 570,099 ounces in 2012, CPM Group said…the greatest net decline was in Africa, where output fell by 615,265 ounces…major Gold-mining nations where output was estimated to be down last year include South Africa, Burkina Faso, Mali, Tanzania, Indonesia, the U.S., Australia, Papua New Guinea, Argentina, Brazil and Peru…key nations with rising output included Canada, China, Ghana, Turkey, Mexico and Chile…mine production is forecast to climb by 4.6 million ounces to 75.6 million in 2013…“Barrick Gold’s Pueblo Viejo project in the Dominican Republic and Ivanhoe Mines’ Oyu Tolgoi project in Mongolia are the two largest projects coming on stream in 201″, the consultancy said…“These two mines are expected to add 958,000 ounces and 700,000 ounces to 2013 supply, respectively…several new projects are also expected to begin production in Brazil, Russia and Australia in 2013″…

Meanwhile, CPM Group said, the secondary supply of scrap Gold hit a record 42.3 million ounces in 2012, up 1.7 million, or 4.2%, from 2011…Indian secondary supply rose to 8 million from 6 million the prior year…“The increase in Indian Gold secondary supply during 2012 is attributed to the decline in Indian Gold imports and an increase in Gold-jewelry demand during the year,” CPM Group said…“Indian Gold imports are the primary source of Gold supply for India…imports had declined in 2012, as a result of the increase in import tariffs and a weakening Indian rupee against the U.S. dollar…meanwhile, there was an increase in Indian Gold jewelry demand during 2012″…

“Buy Something That Central Banks Can’t Print”:  Schiff

“You can’t leave your money in the bank – that’s the lesson we’re learning now with Cyprus. Why leave your money in an interest-bearing bank account when you never know, the bank could fail…why not buy something that central banks can’t print?,” Gold bug Peter Schiff of Euro Pacific Capital told CNBC’ this morning on “asia Squawk Box”…

Today’s Markets

Asian markets enjoyed modest gains overnight with Japan’s Nikkei average gaining 22 points to close at 12494 while China’s Shanghai Composite edged up 3 points to 2301…European shares have been under selling pressure today as investors grow increasingly worried over the political stalemate in Italy, adding to concerns over Cyprus which is poised to impose capital controls on its banks before they re-open tomorrow morning…in Italy, the country’s main leadership candidate, Pier Luigi’s Bersani, reportedly said that only an “insane person” would want to govern the nation now, adding that it’s “in a mess and faces a difficult year ahead”…Italy paid more to borrow over five years than it has since October at its latest auction, indicating worries over its financial situation…in North America, the S&P 500 continues to get pushed back whenever its flirts with its 2007 closing high…the S&P finished less than 2 points from its all-time closing high yesterday while the Dow posted a fresh closing high of 14560…both are weaker through the first 45 minutes of today’s trading…the Dow is down 97 points while the S&P has fallen 10 points…the TSX is off 65 points while the Venture is down 3 points and has hit a new 3.5-year low of 1091…the low 1090’s, however, is a support zone – we’ll see if it holds…

Canadian Dollar Chart Update

While the U.S. Dollar Index continues to show strength, the Canadian dollar has been in a downtrend for over 6 months and that’s definitely problematic for the Venture Exchange which performs best when the greenback is weak and the loonie is in a primary uptrend…recently, the Canadian dollar found support right around 97 cents as predicted but there is strong resistance at 99 cents – in the immediate vicinity of the declining 50-day moving average (SMA)…the loonie is up slightly in early trading today at 98.3 cents…

WTI Updated Chart

Crude Oil has made a nice recovery recently after finding support at the $90 level…like the loonie, however, it’s also nearing resistance as shown in John’s 6-month daily chart below…

Rainbow Resources (RBW, TSX-V) Updated Chart

As we mentioned yesterday, the best companies to focus on in this difficult environment for juniors are those that have real discovery potential and Rainbow Resources (RBW, TSX-V) continues to be in that category with its Gold Viking and Jewel Ridge projects showing very strong potential…John’s 2.5-year weekly chart, interestingly, shows steady buying pressure even during February and March with the stock dropping from the mid-teens in sympathy with the overall market…RBW is up a penny to 10 cents as of 7:15 am Pacific, and a close above resistance at 9 cents would be technically significant…

Note: John and Jon both hold share positions in RBW.

Gold continues to try to hold above the $1,600 support level…as of 7:25 am Pacific, the yellow metal is down $8 an ounce at $1,597…Silver is off 14 cents at $28.71…Copper is up 2 pennies at $3.44…Crude Oil is 86 cents higher at $95.67 while the U.S. Dollar Index, which rallied strongly yesterday, is quiet so far today at 82.83…

Today’s Markets

Asian markets were mixed overnight with the Nikkei average rebounding from heavier losses earlier in the day to close down just 75 points at 12472…China’s Shanghai Composite fell 29 points or 1.2% to finish at 2298…European shares are up slightly in late trading overseas while in North America, the Dow is strong after an intra-day reversal to the downside yesterday that was triggered after an EU finance official told reporters that the rescue plan for Cyprus could serve as a model for dealing with future banking crises in the euro zone…Jeroen Dijsselbloem later tried to clarify his remarks but the damage was done…despite the bailout that was negotiated early Monday, the Cyprus situation remains very delicate and may continue to spook the markets for a while yet, though this may give the Fed even more resolve to maintain its stimulus…banks in Cyprus are scheduled to reopen Thursday but capital controls will last for a “matter of weeks” to prevent massive outflows of cash, the country’s finance minister warned this morning….as of 7:25 am Pacific, the Dow is up 92 points to 14540 thanks to some strong economic data this morning…U.S. single-family home prices rose in January, starting the year with the biggest annual increase in six-and-a-half years in a fresh sign the housing market recovery remains on track…the S&P Case/Schiller Home Price Index of 20 metropolitan areas gained 1% month-on-month in January on a seasonally adjusted basis, topping expectations for a 0.9% increase…meanwhile, demand for long-lasting U.S. manufactured goods surged in February, climbing  5.7% – higher than expected – according to the data released by the Commerce Department this morning…the rise in durable goods orders, which range from toasters to aircraft, reversed January’s 3.8% plunge…the TSX is going in the opposite direction of the U.S. markets, down 27 points, while the Venture has slid 4 points to 1100…

Optimism On The Rise In U.S.

Americans continue to grow more optimistic with regard to a couple of key financial measures – their homes and the stock market…in fact, attitudes toward attitudes toward both surged in the latest CNBC All-America Economic Survey to their highest levels since the beginning of the financial crisis…the percentage of Americans who believe their home prices will increase in the next year rose 9 points to 33% in the March survey compared to November, the biggest jump in the survey’s six-year history…it hasn’t been this high since December, 2007, although it remains below the high-water mark when the survey began in March, 2007, and 48% of Americans believed their home prices would increase…meanwhile, 40% of Americans now say it’s a good time to invest, up from 31% in November and the best level since December, 2009…

HXD Chart Update

The TSX continues to under-perform against the U.S. markets and that trend is not likely to end anytime soon given commodity sluggishness and weakness in the Canadian housing sector, among other issues…this is why we highlighted the HXD double short S&P/TSX60 ETF recently when it was hovering in the $7.60’s as a defensive tactic…RSI(14) has now broken above 50 for the first time since late last year which suggests we could see more near-term weakness in the TSX which is trading below its 50-day moving average (SMA) for the first time since November…

Fission Energy Corp. (FIS, TSX-V) Chart Update

Fresh results released yesterday by Fission Energy Corp. (FIS, TSX-V) and 50% partner Alpha Minerals Inc. (AMW, TSX-V) gave their Patterson Lake South uranium project in Saskatchewan another boost as investors continue to grow more comfortable with the idea of a potential world class uranium deposit there…FIS jumped 12 cents yesterday on total volume (all exchanges) of more than 6 million shares while AMW added 53 points to close at $4.94…both stocks are ip slightly in early trading today…technically, we were most bullish regarding FIS when it was able to overcome a downsloping wedge around 60 cents early in the year as we pointed out at the time..overbought conditions are now prevalent, however, as shown in the 2.5-year weekly chart below…that doesn’t mean it can’t continue to move somewhat higher and become even more overbought, but be careful…

Rainbow Resources (RBW, TSX-V)

While the Venture remains weak, it’s more critical than ever to focus on companies that are reporting strong exploration results and have an opportunity to make an important discovery…Rainbow Resources (RBW, TSX-V) has been quiet in recent weeks but reported this morning that it’ll be utilizing the proceeds from its current private placement financing to carry out additional drilling in both Nevada and southeast British Columbia, at the Jewel Ridge and Gold Viking properties, respectively…Phase 1 drilling at both properties late last year returned highly encouraging Gold and Silver assay results near-surface…Rainbow also announced this morning that it’ll be participating in the 2013 Cambridge House Energy & Resource Investment Conference in Calgary April 5 and 6…

Amarc Resources Ltd. (AHR, TSX-V) Chart Update

Amarc Resources (AHR, TSX-V), which was sitting on more than $6 million cash in bank account as of the end of December and has a strong portfolio of exploration projects in B.C., continues to trade around levels not seen since 2003 and late 2008 – just prior to the start of major new uptrends…Amarc closed at 8 cents yesterday which gives it a market cap of approximately $11 million…while additional weakness is possible if markets slump a little more, AHR has enough strength behind it to survive the current Venture storm and ultimately move higher again once overall investment sentiment improves…

Note: John, Jon and Terry do not hold share positions in FIS. John holds a position in AHR while both John and Jon hold share positions in RBW.

Gold has traded between $1,589 and $1,614 so far today…as of 7:05 am Pacific, bullion is down $13 an ounce at $1,596…Silver is off 3 cents at $28.73…Copper is down a penny at $3.44, about a nickel above critical technical support…hedge funds are making the biggest bet against Copper on record as global inventories expand to a nine-year high…Crude Oil has added $1.14 a barrel to $94.86 while the U.S. Dollar Index is up one-third of a point at 82.6…

Cyprus Secures Bailout But Lasting Damage Has Been Inflicted

Cyprus secured a bailout from its international creditors early today, ending more than a week of intense bargaining that threatened to see the small island nation become the first government to leave the euro zone…but lasting damage has likely been inflicted on the Cypriot economy, and the situation there remains very delicate…officials said they believe the country will now need strict controls on money transfers in and out of the economy in the coming weeks or possibly months, cutting off its citizens and companies from much of the rest of the euro zone’s financial system…and the bailout program aims to slash the size of Cypriot banks, perhaps forever ending the country’s status as an offshore tax haven and financial-services center…both junior and senior bondholders in the Laiki Bank will be wiped out, a first for a euro zone bailout country (in other bailouts, senior bondholders have not faced such losses)…the remaining smaller deposits at Laiki will be transferred to Bank of Cyprus, the nation’s largest lender, which in turn will be shrunk and completely restructured…deposits of more than 100,000 euros will be frozen and will see significant losses…the need for another bailout for Cyprus down the road can’t be ruled out, and the message from the EU that’s loud and clear in this bailout is that nothing is sacrosanct anymore – including banks and bank deposits…the Cyprus story is not going to go away anytime soon, so the market’s relief over the bailout deal might be short-lived…in the meantime, attention will also turn to Italy where political gridlock has the potential to unsettle investors…

Today’s Markets

Japan’s Nikkei average recovered most of Friday’s losses and rallied 1.7% overnight to close at 12546…China’s Shanghai Composite, meanwhile, fell 2 points to close at 2327…European shares are up approximately 1% today in late trading overseas…meanwhile, the Dow has climbed another 43 points to 14555 while the S&P 500 is threatening to close at a new all-time high today…the TSX is flat while the Venture Exchange has gained 5 points to 1111…Fission Energy Corp. (FIS, TSX-V) and Alpha Minerals Inc. (AMW, TSX-V) are both strong this morning after release of more drill results from their Patterson Lake South Property in Saskatchewan…they continue to intersect high-grade uranium within wide intersections at shallow depth…

China On Track To Overtake U.S. As World’s Largest Economy By 2016

China is on track for a fourth consecutive decade of rapid growth and will overtake the U.S. as the world’s biggest economy in 2016 after accounting for price differences, according to an updated report by the OECD which is in line with previous estimates…having slipped to 7.8% growth last year, its slowest in more than a decade, China’s economy will rebound to 8.5% growth this year and 8.9% in 2014, according to the OECD…it forecast that China would average 8% growth in per capita terms during the current decade, provided Beijing can implement a series of economic, financial and regulatory reforms, many of which are already in progress…“There is significant scope for further catch-up in China; China has a strong record with respect to several of the key factors for sustaining growth and is well positioned to emulate the record of earlier stellar Asian performers,” the OECD said in its survey of the world’s second-biggest economy…the OECD noted that growth would gradually ebb as China catches up to more advanced economies but its forecast is well ahead of Beijing’s official target of 7% average growth in the five years to the end of 2015…the Chinese economy is set to become as large as that of the U.S. by around 2016 when assessed in purchasing power parity terms which factors in price differences between countries…the OECD highlighted multiple risks to its outlook: a weak global economy, rising inflation, a rickety financial system, inequality and an ageing population…but it noted that China already had made strides in cutting its reliance on external demand and that domestic rebalancing was also underway, with consumption a bigger driver of growth than investment since 2011…among a broad range of recommended reforms, the OECD drew particular attention to China’s urbanization push, saying the government needed to focus on building larger, more productive cities…although Chinese cities have expanded quickly, the country’s urbanization rate of 52.6% is still below that of countries at similar levels of development…transportation problems have also become severe…average daily commuting times in Beijing, which boasts one of the country’s larger subway networks, are 79 minutes, roughly double the OECD average…Li Keqiang, China’s new premier, has vowed to make urbanization a centrepiece of his agenda…along with more investment in infrastructure, the OECD said Beijing should give migrants to cities better access to schooling and that fiscal reforms were needed to ensure lower levels of government can fund more social services…more controversially, the OECD also called for an overhaul of the Chinese land system…farmers lack the right to sell their land, and the supply of land for residential development near urban areas is tightly controlled…“Continued urbanization is hampered by the rigid central planning rules governing the conversion of designated cropland into construction land, which partly reflect misguided concerns about food security,” it said…

Yamana Gold Inc. (YRI, TSX) Updated Chart

Since the beginning of 2011, the TSX Gold Index has fallen about 40% while Yamana Gold (YRI, TSX) is actually up nearly 20% which speaks volumes about how this company is run…”I don’t think that growth should mean the increase in the number of ounces per share,” CEO Peter Marrone stated recently…”It has to be the increase in the number of quality ounces per share that best contribute to cash flow, and ultimately earnings growth as well”…YRI is off about 50 cents in early trading today to $15.43 with softness in Gold and Gold shares…John’s updated chart shows near-term resistance at $16 and a very strong support band between $13 and $14…

Updated Silver Charts

Long-Time Silver Chart

Silver’s “moment of decision” should occur by the end of the upcoming second quarter according to this updated 11-year monthly chart from John…

Short-Term Silver Chart

Huldra Silver (HDA, TSX-V) Updated Chart

Huldra Silver (HDA, TSX-V) continues to rebound from deeply oversold technical conditions in February when it fell as low as 62 cents during a broad sector sell-off…Huldra’s Treasure Mountain high-grade Silver property near Hope, B.C., is expected to be in full commercial production by month-end, and we’re looking forward to the release of updated revenue numbers from the company…an underground drill program was also slated to commence this month…HDA’s 20-day moving average (SMA) has reversed to the upside after being in decline since late January…overall, the chart is looking much healthier with nearly 5 months of selling pressure now behind it…below is a 6-month daily chart from John…HDA is off 2 cents at 85 cents in early trading today…

Note: John, Jon and Terry do not hold share positions in YRI.  Jon holds a share position in HDA.

TSX Venture Exchange and Gold

Gold’s move about $1,600 an ounce helped the producers but not the juniors last week as the Venture fell 11 points or 1% to close at 1106 while the TSX Gold Index climbed 2.4% to finish at 258.  Friday’s volume was the highest of the year for the Venture, but a good chunk of it (42 million shares) was generated by the takeover offer for Eacom Timber Corporation (ETR, TSX-V).  The coming shortened trading week (markets are closed on Good Friday) will be important and potentially volatile as the first quarter of 2013 comes to a close.  Indeed, a Bollinger Band (BB) “squeeze” is very evident on John’s 3-month Venture chart below.  A BB squeeze typically precedes volatility.   Will there be a break to the upside or the downside?  The BB squeeze in late January was followed by the worst February ever for the Venture Exchange.  This time around, RSI(14) is increasing, not decreasing, while the Slow Stochastics indicator is more favorable.

Events in Cyprus in the coming days will likely be critical in determining the direction of Gold and the markets.  As of late Sunday afternoon Pacific time, reports are circulating that Cyprus and its international creditors have hammered out details of a potential deal that would preserve the country’s place in the euro zone.

Venture 3-Month Daily Chart

In a sign of the times, over the first two months of the year, not a single company went through the laborious process of listing on the Venture Exchange. The last record of two consecutive months without any IPO’s dates back to 2009 when financing was not widely available for juniors. From a contrarian standpoint, perhaps that’s bullish – negative sentiment toward Gold stocks (and even bullion itself) are at extreme lows.  Precise timing of a reversal, however, is very difficult to predict.

Gold

Gold broke above resistance at $1,600 last week and nearly touched another resistance area – $1,620/$1,625 – before backing off slightly.  It gained $16 for the week to close at $1,609.  Events in Cyprus gave Gold a boost, as the potential collapse of the Cypriot financial system underscored why governments can’t be trusted and why it makes sense to avoid holding cash as savings or investment.  Meanwhile, the Federal Reserve Bank stated last week that it intends to maintain its asset purchase program in order to further stimulate job growth and boost the economy.

John’s 2-year weekly Gold chart provides strong evidence that bullion may soon test $1,650.

Silver bounced around last week and closed essentially unchanged at $28.77.  Copper held above key support around $3.40, closing 6 cents higher at $3.52.  Crude Oil gained 26 cents to finish at $93.45 while the U.S. Dollar Index jumped one-quarter of a point to $82.38.

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), a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, 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.  In the current environment, it’s hard to imagine Gold dropping below key support around $1,500.