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Gold has traded between $1,238 and $1,256 so far today…as of 7:50 am Pacific, bullion is up $3 an ounce at $1,246…Silver is 7 cents higher at $19.21…Copper is off 2 pennies at $3.22…Crude Oil is down 54 cents at $97.69 while the U.S. Dollar Index is up one-quarter of a point at 81.27…

Volumes on the Shanghai Gold Exchange fell noticeably ahead of the Chinese Lunar New Year holiday festivities as the premium hit a three-month low, so the fact that Gold is holding up well today despite a drop-off in key Chinese buying is encouraging…still, Gold’s 5-week winning streak – its longest since September 2012 – is in serious jeopardy today, and action this week showed how key the resistance is around $1,275…how bullion performs next week during a period of quieter physical demand due to the China factor will be interesting…Gold needs to overcome that $1,275 resistance in the near future or the bears will sense weakness…

India has the potential to bring fresh physical demand into the Gold market as the first quarter progresses if import restrictions are eased, as some reports are suggesting could occur, prior to that country’s elections in May…

Today’s Markets

Asia

Trading was quiet in Asia overnight as the Shanghai, Hong Kong and South Korea markets were all closed…Japan’s Nikkei lost 93 points to close down 8% for the month, its worst monthly performance since 2012 (the Shanghai was down 4% for January)…

Europe

European stocks, heading for their worst start to the year since 2010, are down significantly in late trading overseas…”deflationary concerns” are resurfacing in the euro zone…consumer prices rose by just 0.7% year-on-year in January, according to official statistics released by Eurostat – below the 0.9% expected by economists…

North America

A shaky month of January is ending on a bad note for the Dow…it’s off 181 points on emerging market concerns as of 7:50 am Pacific…

What does a losing January on the Dow mean for the market for the rest of 2014?…“Since World War II, whenever the market was down in January, the average price change was usually flat in the remaining 11 months,”  according to Sam Stovall, chief equity strategist with S&P Capital IQ (source: CNBC)…“It was a gain of 0.1% on average. It was basically a coin toss as to whether the market rose or fell for the year.”

In Toronto, the TSX is off its lows and down just 86 points now (as of 7:50 am Pacific) while the Venture has fallen 6 points to 947…

TSX Updated 9-Month Daily Chart

The TSX, which is actually up for the month of January entering today’s trading, has strong support around the 13600 level as shown in this 9-month daily chart from John…we saw that area hold in early trading today…a bullish RSI(14) pattern has actually been forming in recent days which is interesting…

Garibaldi Resources Corp. (GGI, TSX-V) Expands The Grizzly, Covers Three Sides Of Doubleview

Exactly what this market needs – the Sheslay Valley Cu-Au porphyry play has become a fast-moving, exciting story with sudden twists and turns and prolific possibilities…Doubleview Capital Corp. (DBV, TSX-V) shot up nearly 50% yesterday as investors are increasingly grasping the significance of DBV’s recently announced drilling discovery at the Hat Property…

This morning, Garibaldi Resources Corp. (GGI, TSX-V) pulled its own “rabbit out of the hat” by announcing a major expansion of its Grizzly Property including the very interesting acquisition of the Hat East and Hat East 2 claims from a private landholder…how Garibaldi was able to pull that one off, we may not know until the book is written on the Sheslay Valley Copper-Gold Rush…in any event, besides also announcing an “aggressive” 2014 exploration program including drilling at the Grizzly, Garibaldi has now positioned itself just 1 km to the east of the Hat Property, and of course the Grizzly was already contiguous to the southern border of the Hat and the lower parts of the western border…

Garibaldi’s acquisition of the Hat East and Hat East 2 claims will “stir up the pot” in the Sheslay Valley and accelerate the land grab in what could easily develop into a multi-deposit scenario over many kilometres given what appears to be a very “pregnant” district featuring all the classic geological and geophysical signatures seen in other major systems to the south and southeast…

If It Looks Like A Duck, Quacks Like A Duck, It’s A Duck

The Sheslay Valley is right on trend with world class deposits, current and past producing mines in the prolific northwest portion of this mineral-rich province…what’s amazing is that it has taken this long for the Sheslay Valley to start to shine…but the main property of interest up until last year (the Sheslay) was under the control for a decade of Firesteel Resources Inc. (FTR, TSX-V) which simply didn’t have the resources it needed or the vision to effectively accelerate the project, holding back exploration activity in the region…of course that all changed last summer when Bernier’s Brigade arrived on the scene and optioned the Sheslay from Firesteel…

We’ve written extensively about the quality of Prosper Gold Corp.’s (PGX, TSX-V) Sheslay Property where five porphyry targets have been identified to date, four of them within a 12 sq. km area; recently, we emphasized the significance of Doubleview’s discovery holes at the Hat (widely spaced, continuity of mineralization and increasing grades at depth) about 9 km southeast of Prosper’s most advanced target (the Star)…DBV President and CEO Farshad Shirvani showed courage, conviction and vision by drilling a series of holes during challenging market (and weather) conditions, and making a discovery that could turn the company into a magical “rags to riches” story – he is to be congratulated; this morning, Garibaldi stepped up to the plate again to remind investors that it’s about to take a big swing at what could be the monster in this whole system, the Grizzly (in reality, any one of these three companies could be sitting on the “motherlode” – drilling will determine that of course)…

1. Scale does matter and the Grizzly is huge – now 262 sq. km, nearly four times the size of the Sheslay and seven times the size of the Hat;

2. The Grizzly hosts an important “heat engine” – the Mount Kaketsa pluton, and rests in the middle of an apparently robust system in between Teck Resources Ltd., Prosper Gold and Doubleview;

3. “Multiple targets” (known mineral occurrences with coincident anomalies) have been identified over a whopping 15 km corridor stretching from Grizzly West to Grizzly Central;

4. Garibaldi has been systematically exploring the Grizzly for several years in preparation for the right drill program at the right time – their odds of success are unusually high, in our view, given their intimate knowledge of the Grizzly and the fact they’ve been able to assess drilling and other data from adjoining properties.

Knowing how prolific the Stikine Arch is, the question regarding the Sheslay Valley in our view is not whether it hosts a Cu-Au porphyry deposit – the question is how many might there be, how big and where exactly are they?…some important clues are beginning to emerge, but it’s still very early in the game…we’re convinced this is going to become an old-fashioned, rip-roaring, British Columbia area play that will breathe new life into the junior exploration market after three very difficult years…much more next week in a special updated report we’re preparing…

Sheslay Valley Updated Area Map

This is the latest Area Map of the Sheslay Valley, released this morning by Garibaldi Resources. Expect more staking and "deal making" by existing and potential new players in the coming days.

Doubleview Capital Corp. (DBV, TSX-V) Updated Chart

Doubleview is in all-time high territory, which can create some special dynamics, and closed above a Fib. resistance level at 23 cents yesterday as shown in this 3-year weekly chart from John…from a technical perspective, it’ll be revealing to see how DBV reacts around that Fib. level the rest of today and if it becomes new support…DBV is off half a penny at 24.5 cents as of 7:50 am Pacific after dipping as low as 22 cents…

Barisan Gold Corp. (BG, TSX-V)

Barisan Gold Corp. (BG, TSX-V) has its own Cu-Au porphyry discovery it’s working on in Indonesia – not our favorite jurisdiction, but it’s an important discovery nonetheless…as announced by the company Wednesday, drilling has resumed with hole UTD-005 at the Upper Tengkering Project…

Technically, BG has unwound an overbought condition with critical support holding – very positive…below is a 2+ year weekly chart from John…

CRB Index Updated Chart

Commodities are holding up well despite emerging market concerns at the moment, as evidenced by this 1-year weekly CRB chart…the Index broke above a downtrend line last month, a strong base has been formed and up momentum is increasing…

Note: John and Jon both hold share positions in GGI and BG.  Jon also holds share positions in DBV and PGX.

Gold has traded between $1,237 and $1,265 so far today…as of 7:30 am Pacific, bullion is down $25 an ounce at $1,242…Silver is off 50 cents at $19.21…Copper has shed 3 pennies to $3.23…Crude Oil is up $1.12 a barrel to $98.48 while the U.S. Dollar Index has climbed more than one-third of a point to 80.98…

Some wise comments from Lawrence Roulston in a wide-ranging interview with The Gold Report posted yesterday that we suggest you check out at www.theaureport.com (“Gold Crybabies Are Born To Lose, Says Lawrence Roulston)…“The higher-quality junior companies in the sector are starting to see a strong level of support at their current prices and many of them are notching higher. The professionals who are most familiar with the resource markets understand the cyclical nature of these markets and, more important, they know how to differentiate among the 2,000 publicly traded junior companies,” Roulston stated.  “The risk is in failing to get into the market before it is too late to win big. If an investor waits for a clear signal that the market has bottomed, the good quality companies will already have moved up substantially. At that point, wannabe investors will be forced to pay high prices for the quality companies or, worse, to buy second-tier companies thinking they are getting a bargain.”

When Rick Rule asked Roulston during a panel discussion at the recent Vancouver Resource Show and Investment Conference what area of the world was best for exploration, he quickly responded, “There’s no other place in the world with more geological prospectivity than British Columbia.” He is absolutely correct, in our view, and not only does B.C. have such “geological prospectivity“, but it also features political stability, a mining-friendly government that’s pushing even harder than ever to maximize this industry as a job-creating machine, and mines are going into production (Red Chris near Iskut being the latest example)…B.C. is “talking the talk” and “walking the walk”…the Northwest Transmission Line is a serious game-changer for northwest B.C., providing a necessary and inexpensive power source for projects of all sorts…

Potential Deposits In The Sheslay Valley Could Be Like “Pearls On A String”

Northwest B.C. will be the province’s exploration hotspot in 2014 (perhaps Canada’s) and the rapidly emerging Sheslay Valley Cu-Au porphyry camp will lead the charge through a handful of solid juniors and at least one major (Teck Resources Ltd., TCK, TSX, with the largest land position in the area) as we’ll be detailing in a special updated report in the coming days…Doubleview Capital Corp.’s (DBV, TSX-V) important recent discovery – it has intriguing size potential with increasing grades at depth – has changed the dynamics of this entire play which the “masses” haven’t even discovered yet (that’s good)…we’ve investigated this region for over eight months with hundreds of hours of research, and the geology over at least a 600 sq. km area of the under-explored, under-exploited Sheslay Valley is such that porphyry deposits could occur over many kilometres in this district like “pearls on a string”…the potential scale of this is truly amazing, and there’s a growing belief that the Sheslay Valley could very quickly develop into an old-fashioned, rip-roaring B.C. area play that singlehandedly breathes new life into the junior exploration market…there are never any guarantees, of course, in the risky exploration business, but the Sheslay Valley is looking increasingly exciting…

Below is our latest map on the Sheslay area, though there has been more staking activity (not indicated on our map) since the Doubleview discovery according to the B.C. Ministry of Mines web site, and Romios Gold (RG, TSX-V) also announced Monday that it has secured 2,800 hectares in the area…

You’ll note on this “big picture” map a classic northwest B.C. scenario in terms of the direction of these trends which are cutting southeasterly across the district – parallel trends, each one of them with the possibility of hosting one or more deposits…geologically, the Sheslay Valley is part of the Stikine Arch and on trend with all the major deposits, current and past producing mines to the south and southeast…there is ample evidence that the Stuhini group rocks of the Sheslay Valley have been subject to intense pressure, heat, and fracturing…a major tectonic event (or events) has occurred here…fluids are also critical to the mineralizing process of any major porphyry system, and this area according to the many geologists we’ve spoken to has all the earmarks of intense fluid throughput…

The three most active and best-positioned juniors in the Sheslay Valley, of course, are (in alphabetical order) Doubleview, Garibaldi Resources Corp. (GGI, TSX-V) and Prosper Gold Corp. (PGX, TSX-V)…there’s an interesting “rain shadow” effect in this area, due to mountains to the west, lengthening the exploration and drilling season from the spring into at least the late fall/early winter (Doubleview was carrying out drilling during a cold snap in mid-November)…areas immediately and further to the south, including the Stewart district for example, receive much more snow and have a considerably shorter exploration season…

This a BMR adjusted map (from the Garibaldi web site) highlighting key features, the recent DBV discovery, and the interpreted southeasterly parallel trends cutting through the district.

Ashburton Ventures Inc. (ABR, TSX-V)

A company with a small but strategic piece of property in the Sheslay Valley that is worthy of our readers’ consideration and due diligence is Ashburton Ventures Inc. (ABR, TSX-V) which holds the nearly 900-hectare Hackett Property contiguous to the eastern border of Doubleview’s Hat Property as you can see on the map above…speculatively, a potential deposit at the Hat could quite possibly trend onto Ashburton’s ground (it appears the Hackett is within 1,200 metres or less of DBV’s discovery holes) given how these parallel trends are dipping southeasterly…as ABR has already reported, “Volcanic-sedimentary assemblages and intrusive rocks on the property are similar (to the Hat) and are believed to be part of the Stuhini group.”

Below is an updated 2.5-year weekly ABR chart from John…ABR currently has a market cap just below $2 million and the stock has been trading in a horizontal channel since late 2012 between technical support at 3.5 cents and resistance at 10 cents…ABR has been perking up ever since last week’s announcement from Doubleview, and as of as of 7:30 am Pacific it’s 1.5 cents higher at 6.5 cents on strong volume..as always, perform your own due diligence…

Today’s Markets

Asia

Asian markets were knocked down significantly overnight with Japan’s Nikkei finishing off its lows but down nearly 2.5% at 15007 after falling 377 points…China’s Shanghai Composite lost 17 points to close at 2033…the final China HSBC purchasing manager’s index (PMI) fell to a new six-month low of 49.5 in January…this was slightly lower than last week’s preliminary estimate of 49.6, confirming expectations of a slowdown in the world’s second largest economy…

Europe

European shares are mixed in late trading overseas…

North America

The Dow, which has lost 720 points or 4.4% over the last six trading sessions, is rebounding modestly today…there were no surprises from the Fed yesterday which is trimming its monthly bond-buying program by another $10 billion…the Commerce Department reported this morning that the U.S. economy expanded 3.2% in the fourth quarter, and investors have also responded enthusiastically to quarterly profits from Facebook (FB, Nasdaq)…as of 7:30 am Pacific, the Dow is up 69 points…

In Toronto, the TSX is 19 points higher while the Venture is down 7 points at 952…

TSX Gold Index Chart Update

With the drop in Gold today, the TSX Gold Index is under some mild pressure, down 5 points at 183 through the first hour of trading, but a 10-year monthly chart from John paints a promising picture of a market this is healing and on the road to better days in our view…the Index is emerging from strong RSI(14) support at the 30% level, forming a bullish “W”…look for the 200-day moving average (SMA), just below 180, to provide potential support…a rising 50-day SMA is an encouraging sign…

Probe Mines Ltd. (PRB, TSX-V)

In addition to the emerging Sheslay Valley district and of course the Athabasca basin uranium play that is in full swing, led by Fission Uranium (FCU, TSX), one of the top exploration stories in the country without a doubt remains Probe Mines’ (PRB, TSX-V) growing Borden Lake deposit and system in northeastern Ontario…Probe is gearing up for an aggressive winter drill program, starting imminently, to expand the very interesting high-grade zone discovered to the southeast of the original deposit…yesterday, PRB hit a new all-time high of $2.89…it has consistently out-performed Gold since the spring of last year when Agnico-Eagle Mines (AEM, TSX) took an equity position in the company…as of 7:30 am Pacific, PRB is off 8 cents at $2.80…

Below is a 2.5-year weekly chart from John…PRB started accelerating after pushing through resistance around $2.60…

Mason Graphite Inc. (LLG, TSX-V) Updated Chart

Note: John and Jon both hold share positions in GGI.  Jon also holds share positions in PGX, DBV and ABR.

Gold has been traded between $1,250 and $1,270 so far today…as of 7:45 am Pacific, bullion is up $8 an ounce at $1,264…Silver is 11 cents higher at $19.67…Copper is flat at $3.27…Crude Oil is off 61 cents at $97.79 while the U.S. Dollar Index is down one-tenth of a point to 80.56…

Excellent article this morning by Lawrence Williams at Mineweb (“Gold Flows And Their Huge Potential Market Impact”) which we strongly suggest readers check out at www.mineweb.com…Williams argues that a “severe supply imbalance” is building in the availability of physical Gold due to a shift in buying from west to east, and “If this flow continues at anything like the current rate – and there’s no evidence yet that it is slowing significantly – then the ensuing short squeeze on physical Gold could be devastating for that part of the Gold trade which is heavily short Gold.”

The central banks of Kazakhstan and Azerbaijan continued to increase their stockpiles of Gold in December, as the metal’s price dropped to six-month lows…Kazakhstan’s central bank raised its official Gold reserves 77,000 troy ounces last month, to 4.6 million ounces, according to data yesterday from the International Monetary Fund…Azerbaijan added 32,000 ounces to its now 644,000-ounce reserve which a year earlier had stood at almost nil…the central banks of Belarus and Ukraine were also active buyers last month, lifting their individual reserves by 28,000 ounces and 20,000 ounces, respectively…last month’s purchases appear to have been overshadowed, though, by a possible drop in the official reserves of Russia’s central bank, one of the largest owners of Gold…the central bank holdings of Russia, which has been a regular buyer of Gold in recent years, fell to 30.2 million ounces in December, according to IMF figures show…this number is at odds, however, with data from the bank itself, which last week reported end-of-year Gold reserves of 33.3 million ounces…

Fed Decision Later Today

All eyes are on the Federal Reserve today as it wraps up its two-day meeting with a policy statement at 11:00 am Pacific…this is Ben Bernanke’s last meeting as Fed Chairman, and he won’t be holding a news conference afterward…most analysts expect the Fed to announce another trimming of its bond-buying program but equally important is the language and the tone of the statement, including what the Fed says about the risks to its outlook…watch also for forward guidance regarding the Fed’s future intention for short-term interest rates…

The Potential Affect Of Rising Interest Rates On Government Debt – Bullish For Gold?

In an editorial published through Project Syndicate, Richard Cooper, a professor of international economics at Harvard University, and Richard Dobbs, director of the McKinsey Global Institute, wrote that from 2007 to 2012, the U.S. and European governments saved about $1.6 trillion because of lower interest rates…however, if interest rates were to return to levels seen in 2007 – certainly not an unrealistic expectation over the next couple of years – interest payments on government debt could rise by 20%…

Today’s Markets

Asia

Asian equity markets rebounded overnight after an aggressive rate hike from the Turkish central bank soothed worries over volatility in emerging markets…rate-setters in Turkey blindsided markets after an emergency meeting on Tuesday that concluded at midnight, by delivering a much larger rate rise than economists had expected…Turkey’s central bank raised its overnight lending rate to 12% from 7.75% in its first emergency meeting since 2011…the move is aimed at stemming the lira’s sharp declines and follows yesterday’s unexpected rate hike from the Reserve Bank of India…

China’s Shanghai Composite finished 11 points higher overnight to close at 2050…Japan’s Nikkei surged 404 points or 2.7% – its biggest gain in nearly 5 months, thanks in part to a weaker yen…

Europe

European markets, a little nervous entering today’s Fed decision, are generally down about 1% in late trading overseas…on the data front, the German GfK consumer climate survey for February surprised on the upside…the forward-looking index showed an uptick to to 8.2%, against expectations of 7.6%…this optimism should feed through into the real economy…

North America

The Dow is down 105 points as of 7:45 am Pacific…Wall Street is grappling with less-than-expected earnings outlooks today, and concern about emerging markets as it braces for the Fed’s next move on stimulus…

The TSX is 68 points lower as of 7:45 am Pacific while the Venture is off just 2 points at 957…

Venture 6-Month Updated Daily Chart

As we mentioned yesterday, the Venture’s 32-point slide Friday and Monday was very healthy from a technical standpoint…it was not a big volume sell-off, and it helped to unwind temporarily overbought conditions after a string of 19 positive days out of 22 during which time the Index climbed just over 10%…this market is full of strong support levels ranging from the mid 920’s, but it’s quite possible that yesterday’s intra-day 949 (just 3 points above the 61.8% Fib. support level) will mark the low of this mini-correction…

True Gold Mining Inc. (TGM, TSX-V) Raises Another $45 Million

True Gold Mining (TGM, TSX-V) is under some selling pressure this morning after announcing yesterday that it has arranged a bought deal financing at 40 cents for gross proceeds of $36.6 million…in addition, Liberty Metals & Mining Holdings LLC, a subsidiary of Liberty Mutual Insurance and the company’s largest shareholder, will inject another $8.5 million into True Gold by purchasing 21.2 million units at 40 cents to maintain its pro rata interest (19.9%)…the combined $45 million financing (could go a little higher if the overallotment option is exercised) will be used to allow the company to proceed with its proposed development and construction activities at its Karma Gold Project in Burkino Faso…

The financing is being carried out at a price where there should be strong new technical support for the stock – we’ll see if that holds today – after the recent breakout…below is a 2.5-year weekly TGM chart update from John…TGM gapped down to 39 cents at the open and is currently off 6.5 cents at 39.5 cents, on volume of more than 2 million shares, as of 7:45 am Pacific…

Reservoir Minerals Inc. (RMC, TSX-V) Update

Reservoir Minerals (RMC, TSX-V) continues to push higher following Monday’s news of an initial resource estimate for the high sulphidation epithermal zone (HSE) of mineralization within the Cukaru Peki Copper-Gold deposit in Serbia…the deposit forms part of the Timok Project, a joint venture between Reservoir and Freeport-McMoRan Copper & Gold Inc. (FCX, NYSE)…

The National Instrument 43-101-compliant inferred resource for the HSE zone is estimated at 65.3 million tonnes at an average grade of 2.6% Copper and 1.5 g/t Au, or 3.5% CuEq, containing 1.7 million tonnes (3.8 billion pounds) Copper and 3.1 million ounces Gold…the inferred resource estimate is reported above a 1% CuEq cut-off grade…

The inferred resource includes the high-grade massive sulphide (HGMS) domain containing an estimated 6.8 million tonnes at an average grade of 9.6% Copper and 5.9 g/t Gold (13.1% CuEq) at a 1% CuEq cut-off, and a significant proportion of the semi-massive sulphide domain containing 14 million tonnes at an average grade of 3.2% Copper and 2.7 g/t Au (4.8% CuEq) at a 3% CuEq cut-off…the underlying porphyry-type mineralization has not been modeled at this time due to the lack of drill data and geometrical understanding, and is not included in the resource estimate…

Quite simply, RMC and Freeport have a great deposit on their hands with strong upside potential to increase resources through infill drilling and the likelihood of extensions to the system…in addition, other areas of the Timok magmatic complex (100% held by Reservoir) are highly prospective for fresh discoveries…

Below is a 1.5-year weekly RMC chart from John…RMC is up 3 pennies at $5.94 on light volume as of 7:45 am Pacific…

Canada Carbon Inc. (CCB, TSX-V) Updated Chart

Note: John, Jon and Terry do not hold share positions in TGM, RMC or CCB.

Gold has traded between $1,249 and $1,263 so far today as the Fed begins its two-day policy meeting…most analysts expect the Fed to cut back modestly again on QE, despite the weak December payrolls number, and bullion in our view has largely priced that in…yesterday, Gold hit a 9-week high in early trading before reacting at $1,275 resistance which includes a long-term downtrend line…that’s a critical level the bulls need to conquer, preferably by the end of this week, to keep the recent momentum in their favor…as of 7:30 am Pacific, Gold is down $4 an ounce at $1,253…Silver is off 13 cents at $19.56…Copper has added 2 pennies to $3.28…Crude Oil has surged $1.67 a barrel to $97.39 while the U.S. Dollar Index is up slightly at 80.57…

In its latest Global Gold Hedgebook analysis, prepared by Thomson Reuters GFMS, the Corporate and Investment Banking Division of Societe Generale (SocGen) notes that the outstanding global hedge book at the end of September only stood at 2.94 million ounces (92 tonnes), the lowest volume since the quarterly hedge book analysis reports were initiated in 2002…

Managed-money accounts raised their Gold futures and options net-long positions for the fourth consecutive week according to the latest COT data as of January 21…large speculators have increased their net-long positions for five straight weeks…commercials added more gross longs than gross shorts…Barclays stated, “Speculative positioning has slowly edged higher and is now at its highest since mid-November. Although net-non-commercial positions are relatively positive, gross longs and shorts are not aggressively elevated in either direction, suggesting scope for significant moves following the FOMC meeting this week.”

Today’s Markets

Efforts by emerging-market central banks to counter a vicious market sell-off in recent days brought a measure of calm today…

Asia

China’s Shanghai Composite stabilized overnight, gaining 5 points to close at 2039, following yesterday’s 1% decline after the People’s Bank of China (PBOC) injected funds into interbank markets, soothing fears over a new liquidity crunch…it was also reported that Chinese industrial profits rose an annual 6% in December, slower than November’s 9.7%…Japan’s Nikkei slipped 26 points to finish at 14980…

Europe

European markets are in strong positive territory in late trading, bouncing back from yesterday’s losses…the British economy recorded its fastest annual growth rate in 2013 since the start of the financial crisis, with full-year growth up 1.9% from just 0.3% in 2012…meanwhile, an upbeat German Ifo business confidence index report was released yesterday Monday…the index hit its highest level in two-and-a-half years and continues a string of encouraging economic data coming out of the EU…

North America

After five straight declining sessions totaling 621 points or 3.8%, which put RSI(2) at an extreme low not seen since a great buying opportunity in mid-December, the Dow is up 70 points as of 7:30 am Pacific…

An overwhelming 87% of the 45 top money managers, investment strategists and professional economists who responded to this month’s CNBC Fed Survey expect the Fed to taper by an average of $9.87 billion when the central bank’s policy decision is announced tomorrow…

President Obama will lay out his agenda for the year tonight in his State of the Union Address before a nation increasingly worried about his abilities, dissatisfied with the economy and fearful for the country’s future, according to a just-released Wall Street Journal/NBC News poll…since the rise of modern polling in the 1930’s, only George W. Bush has begun his sixth year in the White House on rockier ground than Obama…

The TSX has climbed 55 points as of 7:30 am Pacific while the Venture is up a point at 953…the combined 32-point drop in the Venture Friday and yesterday doesn’t concern us in the least – in fact, it was a healthy pullback after the Index posted gains in 19 out of the previous 22 sessions which included a 13-session winning streak, the longest in many years…

Below is a 6-month daily Venture chart from John showing strong support levels and an RSI(14) that has largely unwound an overbought condition over the last two trading days…

Sheslay Valley Area Heating Up

It should come as no surprise that all of northwest B.C. is a very hot topic of conversation at the “Roundup” in Vancouver that started yesterday and continues through Thursday…

Information from the B.C. Ministry of Mines web site shows a pick-up in staking activity in the Sheslay Valley area with Romios Gold (RG, TSX-V) also announcing yesterday that it has acquired a 2,800-hectare position…the mineral tenures acquired by Romios, as the company stated, are in two blocks with the northerly claim staked along the southern edge of a long airborne magnetic anomaly and the southerly claim staked over another large circular airborne magnetic anomaly, with both anomalies resembling the geophysical anomaly covered by Doubleview Capital Corp.’s (DBV, TSX-V) Hat property…

Action in the Sheslay Valley is going to continue to intensify in our view given the recent Cu-Au porphyry drilling discovery (widely spaced holes, increasing grades with depth) by Doubleview, excellent results delivered by Prosper Gold Corp. (PGX, TSX-V) last summer and fall at its Sheslay Project, and the highly prospective 175 sq. km Grizzly land package being explored by Garibaldi Resources Corp. (GGI, TSX-V)…also what’s very interesting is the huge 600 sq. km block (the Eagle Property) held by Teck Resources Ltd. (TCK, TSX) contiguous to the southern boundary of the Grizzly…Teck staked that ground in 2011 and has been more active on it than many had believed…assessment and historical reports show intriguing geological and geophysical similarities between the northern half of the Eagle and all the ground held for another 10+ km to the north and northeast by GGI, DBV and PGX where a series of parallel trends strike NW/SE…in short, the possibility of the under-exploited Sheslay Valley turning into another world class B.C. discovery area and future mining camp, as we speculated last year, has to be considered very real, and we’ll be expanding on that theory in the days ahead…

In the meantime, DBV and GGI continue to look very strong technically…a confirmed major breakout above a bullish downsloping flag has occurred in GGI as shown in this 3.5-year weekly chart from John…as of 7:30 am Pacific, GGI is unchanged at 16 cents…

Doubleview Capital Corp. (DBV, TSX-V) Updated Chart

Doubleview hit an all-time high last week after reporting its discovery at the Hat Property, approximately 9 km to the southeast of Prosper’s Star target that was drilled last summer…the fact that this hit is that distance away from the Star shows how potentially “pregnant” this entire system is…technically, DBV’s immediate challenge is to overcome Fib. resistance at the 15-cent level…below is a 3-year weekly chart that overall holds great promise…as of 7:30 am Pacific, DBV is up another penny at 16 cents…

Keep in mind, of course, that Fib. resistance and target levels are not price targets – just theoretical levels based on Fib. and technical analysis…as always, perform your own due diligence…

Red Pine Exploration Inc. (RPX, TSX-V) Drills 27.5 Metres Grading 8% Zn At Cayenne-Chili Property

Red Pine Exploration (RPX, TSX-V) reported initial drill results this morning from its Cayenne-Chili Project in the Porcupine Mining Division, 110 km southwest of Timmins…some encouraging near-surface values were encountered but figuring out this system at depth is the challenge…the company drilled its first three holes in late December to follow-up on mechanized trenching last summer that exposed an area of massive sulphides…hole CC13-01 returned 27.47 m grading 8.02% Zn, 0.34% Cu, 1% Pb and 8.48 g/t Ag from 11 to 38.47 m…hole CC13-02 cut a 16.44 m intersection grading 3.63% Zn, 0.35% Cu, 0.58% Pb and 3.20 g/t Ag…hole CC13-03 was drilled 120 m to the northeast and returned 30 m of 0.50% Zn stockwork material…early interpretation of electromagnetic and down-hole IP surveys suggests that the mineralization is plunging to the west along strike…drilling has resumed at the property and the company expects to complete another 10-15 holes by the end of February…RPX, which has a lot of shares outstanding (nearly 200 million), is down a penny at 9.5 cents through the first hour of trading…

Wellgreen Platinum Ltd. (WG, TSX-V)

The 2014 outlook for Platinum is quite bullish, according to many analysts, and this helps explain the recent activity in Wellgreen Platinum (WG, TSX-V) – formerly Prophecy Platinum – which has broken out of a 10-month horizontal channel…the company’s advanced-stage, past producing Wellgreen Project is in southwestern Yukon…an updated PEA is due within a few months…below is a 2-year weekly chart…WG is up 3 cents at 96 cents as of 7:30 am Pacific…

Azincourt Uranium Inc. (AAZ, TSX-V) Updated Chart

Note: John and Jon both hold share positions in GGI.  Jon also holds share positions in DBV and PGX.

Gold climbed as high as $1,274 overnight before backing off from that resistance area…as of 7:30 am Pacific, bullion is down $8 an ounce at $1,261…Silver is off 8 cents at $19.83…Copper is flat at $3.27…Crude Oil is up down slightly at $96.50 while the U.S. Dollar Index is up less than one-tenth of a point at 80.46…

Bullion has climbed for five straight weeks, its longest winning streak since September 2012, as stress in emerging markets has been contributing to a reallocation of assets toward safe havens…Gold’s immediate challenge is to overcome important resistance around $1,275 as shown in John’s chart this morning…while bullion has benefited from some short-covering so far this year, the potential for an explosive short “squeeze” clearly exists given the still very high level of short positions in this market…this will be a key week for Gold, especially with the FMOC meeting tomorrow and Wednesday…

Global mints are manufacturing bullion coins as fast as they can to meet climbing demand…purchases of bullion coins at Australia’s Perth Mint rose 20% this year through January 20 from a year earlier…sales by the U.S. Mint are set for the best month since April…

China’s 2013 Gold imports from Hong Kong more than doubled from the previous year to reach a record of more than 1,000 tonnes as a sharp fall in prices led to unprecedented demand…China imported about 1,158.162 tonnes from Hong Kong last year, compared with 557.478 tonnes in 2012, according to a Reuters report this morning…demand for Gold jewellery, bars and coins jumped as Gold prices fell 28% last year, the first annual decline after a 12-year bull run…net Gold flows into China climbed to 94.847 tonnes in December from 76.393 tonnes in November – a strong number to finish off the year…January’s figure could be even higher in the run-up to the Chinese New Year at month-end…

Gold sales by Japan’s biggest bullion retailers surged 63% to a five-year high in 2013…sales of Gold bars to local investors soared to 37.3 metric tonnes from 22.9 metric tonnes a year earlier…

Gold 9-Month Daily Chart

This 9-month daily chart paints a very clear picture of where Gold sits at the moment…once again, it’s up against long-term downtrend line resistance and chart resistance around $1,275…a move through this area would clearly accelerate short-covering and put the bears on the defensive…the ADX trend indicator has turned bullish (+DI/-DI crossover) and buy pressure has picked up significantly, but can the recent momentum continue and ramp up even more to push Gold through $1,275?…we’ll find out soon enough…

Will The Fed Blink?

Many analysts expect the Fed to announce another $10 billion cut in its monthly asset purchases on Wednesday, despite an unexpectedly weak December jobs report and the growing concern regarding emerging markets…during a speech in his hometown on January 14, Charles Plosser, President of the Philadelphia Federal Reserve but not a voting member of the FMOC, stated, “When we started QE…there were many economies and emerging markets and other places that were very critical of our policy. Now that we’re trying to stop it, they’ve been very critical of our policy.  We are aware of those things.  But the way the Fed thinks about it is, if the monetary policy that we have is the best for the U.S. economy, then that’s the policy that we ought to pursue because a strong U.S. economy would be good for most of the rest of the world.”

While many emerging market countries are suffering from capital outflows due to Fed tapering, they’re also hurting because of poor economic policies – Argentina being a classic example – and there’s nothing the Fed can do about that…as Warren Buffet famously said, “Only when the tide goes out do you discover who’s been swimming naked.”

Today’s Markets

Asia

Asian markets started the week on a rough note as emerging markets remained under pressure on fears over a tightening in U.S. monetary policy and credit conditions in China…the Shanghai Composite fell 21 points to close at 2033 while Japan’s Nikkei tumbled 386 points or 2.5%…

Europe

European markets are mostly lower in late trading overseas with the FTSE down 1.4%…

North America

After suffering its worst week (down 579 points or 3.5%) since November 2011, the Dow opened higher this morning but has since given up all those gains and is now down another 6 points through the first hour of trading today…Caterpillar Inc. (CAT, NYSE) posted a stronger-than-expected quarterly profit today as the world’s largest mining and construction equipment supplier aggressively cut costs to offset continued sluggish sales…

In Toronto, the TSX is off 120 points while the Venture has slipped 10 points to 957, 3 points below its 20-day moving average (SMA)…a wide support band exists between about 930 and 960, and the overall uptrend remains firmly intact…

Venture 3-Year Weekly Chart

Below is John’s updated 3-year Venture weekly chart…RSI(14) has pushed above all previous resistance levels encountered since the bear market began in early 2011 – we’ll see if the 50% RSI(14) level now acts as support…

Canada Zinc Metals Corp. (CZX, TSX-V)

Canada Zinc Metals Corp. (CZX, TSX-V) has been a strong performer in recent months and is certainly worthy of our readers’ consideration as 2014 progresses…CZX ran into long-term chart resistance last week and may need to digest its gains with a short period of consolidation, so John has outlined support levels in the event of a pullback…however, how much of a pullback could occur here is the big question…the stock has been very resilient since waking up last June and has seldom fallen below its 20-day SMA, currently at 49 cents…

Canada Zinc is a dominant landholder in B.C.’s Kechika Trough which hosts several known Zinc-Lead-Silver deposits including the company’s Cardiac Creek deposit which has a NI-43-101 resource…Cardiac Creek forms one of CZX’s two 100%-owned projects – the other is the Kechika Regional which holds significant exploration upside…CZX is unchanged at 54 cents as of 7:30 am Pacific…

CZX 3-Year Weekly Chart

Terrax Minerals Inc. (TXR, TSX-V) Update

Terrax Minerals Inc. (TXR, TSX-V) was one of our late December picks to “watch closely” in 2014…TXR just completed a $1.1 million financing at 45 cents and could certainly make some noise as it ramps up exploration at its Northbelt Gold Property which covers approximately 13 km of strike along the prolific Yellowknife Gold Belt…the property is on the northern extension of the geology that contained the Giant (7.6-million-ounce) and Con (5.5-million-ounce) Gold mines…the company has received some interesting results from the re-logging and re-sampling of old drill core in preparation for its own drill program…Virginia Mines Inc. (VGQ, TSX) added to its position in Terrax by taking down just over 20% of the private placement…

Below is a 13-month weekly TXR chart…the next major resistance is at last September’s all-time high of 69 cents…TXR is up 2 pennies at 58 cents as of 7:30 am Pacific…

Silver 6-Month Daily Chart

Silver Long-Term Chart Update

Note: John, Jon and Terry do not hold share positions in CZX or TXR.

TSX Venture Exchange and Gold

The Venture was on track to post its fifth consecutive weekly advance until the broader indices tripped Friday over emerging market concerns with the Dow tumbling more than 300 points.  The Dow suffered its worst week since November 2011, losing 579 points or 3.5% over four sessions (Monday of course was a holiday in the U.S.).

All things considered, the Venture held up very well though it experienced its first “down” Friday since November 1 as it slid 16 points to close at 967.  For the week, the Index was off a mere 9 points – a healthy pullback given the fact that this market has made quite a jump since its December 19 intra-day low of 883.52.  John was correct in not calling a “confirmed” breakout last week above resistance around 970, but we believe it’s just a matter of time before this important breakout occurs.  Investor patience, as we mentioned a week ago, is critical.

The Venture has built a wall of very powerful support stretching from its rising 50-day moving average (SMA) at 930 all the way to current levels.  So the “Big Picture” is very simple:  Bullish dynamics are in place to make this a “turnaround year” on the Venture with some exceptional wealth-building opportunities.

Below is a 5-year monthly chart from John and some key points that support our technical argument:

1. In October, as we’ve pointed out repeatedly, the Venture finally broke above a long-term downtrend line which was tested repeatedly for two months and held;

2. RSI(14) on the longer-term charts (weekly and monthly) has pushed above all resistance levels encountered since the bear market began in early 2011;

3. The MACD histogram is now in the bullish zone for the first time since 2011;

4. The extreme oversold RSI(14) conditions during the second quarter of last year, as shown in the chart below, were exactly what would one expect at a market bottom – these conditions were a “mirror image” of the extreme overbought situation that emerged in late 2010/early 2011;

5. The Venture has broken above its 200-day SMA for the first time since the bear market began, and a “Golden Cross” appears set to occur – the 50-day SMA is poised to soon move above the 200-day, and the latter SMA also appears to be gearing up to reverse to the upside later this quarter.

Bottom line:  The Venture bear market is indeed over.  Patience and selectivity, however, remain critical.  Focus on the companies with strong management and geological teams, healthy balance sheets with no immediate need to raise money, attractive share structures, excellent properties in safe jurisdictions, active programs, and a management group that’s driven to push hard to build shareholder value.

Venture 5-Year Monthly Chart

Frank Holmes On The Venture

We strongly suggest investors check out the excellent piece posted last night regarding the Venture by Frank Holmes, CEO and Chief Investment Officer for U.S. Global Investors, as part of his weekly Investor Alert at www.usfunds.com (“Why The Recent Lift In Junior Miners Will Likely Continue”) – click on the link below:

http://www.usfunds.com/investor-library/investor-alert/

The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks

There’s no better cure for low prices than low prices.  The great benefit of the collapse in Gold prices in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their their overall operations.  Exploration budgets among both producers and juniors have also been cut sharply.  In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe).   Ultimately, all of  these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, grades have fallen significantly just over the past decade.

It doesn’t take a rocket scientist to figure out that the next huge bull market in Gold stocks is just around the corner due to demand-supply dynamics, much leaner producers who will suddenly become earnings machines, and a junior market that will be healthier simply because a lot of the “lifestyle” companies sucking money out of investors will simply disappear or get taken over by individuals or groups who are actually competent and serious about building shareholder value.   A healthy “cleansing” in the market has been taking place.  As this continues, more and more seeds are being planted for an incredible future move in well-managed Gold producers and explorers that could make the dotcom bubble look like a tea party.  As for the juniors, focus on the small universe of companies that have the ability to execute both on the ground and in the market.  Companies that are strong financially, have superior exploration prospects, competent management and clean share structures.

Gold

As we mentioned in this space a week ago, Gold’s close above $1,250 the week of January 13 was encouraging and suggested that bullion could be gathering the energy to test important resistance around $1,275.  That’s exactly what’s occurring, and next week is going to be very interesting with bullion sitting right beneath this area after Friday’s $1,269 close for a weekly gain of $15.  Which way this will go in the coming days is anyone’s guess, and next week’s Federal Reserve meeting (Tuesday and Wednesday) will be a key factor in determining if the Gold bulls can put the bears on the defensive.

Despite Gold’s rise last week, Silver fell 41 cents to close at $19.91.  Copper suffered its biggest weekly loss in two months, falling a nickel to close at $3.27.  Crude Oil gained $2.27 a barrel to finish at $96.64 while the U.S. Dollar Index slid two-thirds of a point to 80.48.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been 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, has had a huge impact on bullion.  Despite Gold’s largest annual drop in three decades in 2013, the fundamental long-term case for the metal remains solidly intact – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates, a Fed balance sheet now at $4 trillion and still expanding, money supply growth around the globe, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand (especially from China), emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflationary concerns around the globe and the prospect of Fed tapering had a lot to do with Gold’s plunge during the spring below the technically and psychologically important $1,500 level, along with the strong performance of equities which has drawn “momentum traders” away from bullion.  June’s low of $1,179 may have been the bottom for Gold – only  time will tell.  Given the high level of bearishness that exists in this market at the moment, it’s probably safe to say that if Gold hasn’t seen its low yet, it’s at least very close to a bottom (within 10% to 15%).  We do, however, expect new all-time highs as the decade progresses and inflationary pressures finally kick in around the globe after years of ultra-loose monetary policy.  There are many reasons to believe that Gold’s long-term bull market is still intact despite this major correction from the 2011 all-time high of just above $1,900 an ounce.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than four years and strictly through word-of-mouth we have built a loyal following.  We encourage reader feedback and the exchange of helpful opinions and ideas among investors in our forum. 

We’re continuing with our plans to ultimately construct a very unique investment and money-management resource site that goes considerably beyond what we have now.  We focus a great deal on the Gold, Silver and Copper markets as well as trends in the global economy, in addition of course to the technical health of the TSX Venture Exchange (CDNX).  An important component of this site, as well, will always be original research on high quality junior exploration companies or small producers 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, and we are being more selective than ever in the current market environment.  We look for companies with the ability to execute both on the ground and in the market, who are determined to build shareholder value, which actually excludes most Venture stocks.  However, investors must understand that the companies we do put forward for our readers’ due diligence are still highly speculative situations and entail considerable risk, volatility and unpredictability.

Our intent is to provide you with information that you can use as part of 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. 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.  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 perspective (His money that we have been given stewardship of), He will bless you.  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 $1,256 and $1,274 so far today…as of 7:30 am Pacific, bullion is up $4 an ounce at $1,268 as it looks to finish the week on a strong note…stiff resistance is around $1,275…Silver is 14 cents higher at $20.16…Copper is flat at $3.28…Crude Oil is down 47 cents at $96.85 while the U.S. Dollar Index has rebounded after some early weakness and is now essentially unchanged at 80.46…

Gold’s five-week rally – a gain of nearly 5% – is the metal’s longest winning streak since August-September…short-covering, weakness in the U.S. Dollar Index, and unconfirmed news reports yesterday that India’s government is considering lifting at least part of its Gold import duties are among the factors that have driven bullion to its highest levels in two months today…Peter Schiff, CEO and chief global strategist of Euro Pacific Capital, and a long-time Gold bull and dollar bear, told CNBC in an interview, “Gold has already priced in whatever taper is coming.  If anything, it has overpriced it.” The Fed, he argues, is trapped in a vicious cycle of easy money, unable to fully revive the economy yet hesitant to end the very programs that it hoped would do just that…

The Fed is indeed in a difficult position as it prepares for another policy meeting next week – the worst sell-off in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Fed’s tapering of monetary stimulus, compounded by growing political and financial instability…while China, Brazil, Russia, India, and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability – especially if the Fed continues to taper as that is encouraging capital outflows from these countries…the International Monetary Fund has already predicted that the growth advantage of emerging markets over advanced economies will shrink this year to the smallest since 2001…fundamental weaknesses in some emerging markets’ economies are being exposed now that the Fed has started the “tapering” process…

Benoit Anne, head of global emerging market strategy at Societe Generale, told CNBC the emerging markets’ “panic mode” was directly linked to the Fed.  “We have huge psychological fear that is going to emerging markets, despite a global environment that hasn’t changed that much,” he said. “My bias at this stage – although it’s a bold one – is that this is all about the credibility of the Fed with respect to its forward guidance. This fear that the Fed is going to tighten quicker than expected is translating into emerging markets.”

Today’s Markets

Asia

Japan’s Nikkei fell to a one-month intra-day low of 15,288 overnight before recovering modestly to finish the week at 15392, but that was still a 304-point drop (1.94%) for the session…China’s Shanghai Composite bucked the trend, gaining 12 points to close at 2054…

Updated Shanghai Composite Chart

On an encouraging note, it’s possible the Shanghai may have put in a “triple bottom”, or at least let’s hope it has…below is a 2.5-year weekly Shanghai chart entering today’s trading…a rebound appears to be in the works after a sharp sell-off of more than 10% since early last month…the Shanghai has a strong support band between 1950 and 2000 with significant resistance around 2250…

Europe

European markets are down sharply in late trading overseas…

North America

After losing 261 points Tuesday through Thursday, the Dow is off another 134 points at 16063 through the first hour of trading today…the current weakness in the Dow may have nearly run its course, especially with RSI(2) at an extreme low where previous reversals have occurred, though some analysts are saying a deeper correction is in the works…this is interesting, and we’ve shown it before – a reliable leading indicator of potential weakness in the Dow is whenever the RSI(14) breaks below its EMA-25…this has happened on six occasions going back to last September as you can see in this Dow 6-month chart…a mild sell-off then occurs in the Index before it quickly bounces back…the Dow has strong support around 16000 as shown on this chart…

Dow 6-Month Daily Chart

The TSX is off 146 points as of 7:30 am Pacific while the Venture has fallen 10 points to 974…

Venture Chart Update

The Venture is still trying to push convincingly past the 970’s for a “confirmed” breakout, but hasn’t yet managed to do that…while the Index is off in early trading today, momentum is still on its side and there’s plenty of support between 960 (the rising 20-day SMA) and 970…amazingly, the Venture has recorded 11 consecutive positive Fridays – it hasn’t experienced a “down” Friday since November 1, so it’ll be interesting to see if there’s an intra-day reversal today though it would have to be a dramatic one for the Index to finish in the green for the 12th straight Friday…a minor pullback during an overall uptrend is always healthy for technical reasons…of course it also creates even better buying opportunities…

What’s particularly significant about the 3-year weekly chart is the breakout in the RSI(14) – it has pushed past all resistance levels since the bear market began in early 2011…

Revolver Resources Inc. (RZ, TSX-V) Update

We noted last month that Revolver Resources (RZ, TSX-V) was worthy of our readers’ due diligence with the stock sitting at about 4 cents and a drill program just getting underway at the company’s property near Colorado Resources‘ (CXO, TSX-V) North ROK…Revolver has had a good week and closed at 8.5 cents yesterday…however, we caution that it is in overbought territory on the 2.5-year weekly chart (see below) and is now approaching resistance at the 10-cent level…on January 13, RZ announced that it had completed the first 400-metre drill hole of its planned 1,000-metre 3-hole program at Summit B with initial results expected “in the next weeks” which we interpret to mean likely during the first half of February…RZ is unchanged at 8.5 cents as of 7:30 am Pacific…

Probe Mines Ltd. (PRB, TSX-V) Updated Chart

Probe Mines (PRB, TSX-V) is one of the country’s best exploration stories as it continues to build on a high-grade Gold zone discovered last year at its multi-million ounce Borden Lake deposit in northern Ontario…the company announced a couple of weeks ago that drill crews were mobilizing to commence the 2014 drill program at Borden, which will be supported by four rigs…drilling will focus on the HGZ, and particularly its expansion along strike…below is a 2.5-year weekly chart from John…PRB has consistently out-performed Gold since the spring of last year…PRB is up 7 cents at $2.73 through the first hour of trading…

Note: John, Jon and Terry do not hold share positions in PRB or RZ.