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TSX Venture Exchange and Gold

Note:  Canadian markets are closed Monday for “Victoria Day”.  U.S. markets are open.  We’ll be posting a BMR interview (video) this evening or Monday morning.

The Venture has declined in seven out of the last 10 sessions and surrendered another 14 points last week to close at 977, putting it within a very strong band of support between the 940’s and the 980’s.  Testing of this support is normal and healthy from a technical standpoint, and it’s also the mirror image of the repeated tests of resistance around 970 over many months last year.  Underpinned by both chart and Fib. support, including a rising 200-day moving average (SMA) in the 960’s, the Venture has backed off into a safe accumulation zone in advance of what we believe will lead to a powerful breakout above the 1050 level during the third quarter.

Below is an updated long-term chart from John.  Buy pressure has remained steady this month despite a 25-point drop so far in May.  It’s reasonable to believe that RSI(14) will find strong support around current levels where it faced stiff resistance since mid-2011 on this 5-year weekly chart.

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

Gold, seemingly confused about which way to turn, traded in a narrow range last week, closing up $3 an ounce at $1,293.

Solid support exists in the $1,270’s while key resistance is in the $1,325 to $1,350 area.  Those are important levels to watch.  A solid case can be made for a big move in Gold to the upside over the summer (that’s what the Venture seems to be hinting at), and that would catch a lot of traders by surprise.  Besides support in the $1,270’s, bullion has shown a lot of resiliency at its rising 100-day SMA which currently sits at $1,289.

UBS recommends selling Gold on any price rallies, arguing bullion lacks the incentives to push higher, and more importantly, to maintain its “elevated perch”.   The bank’s analysts added that recent gains were aided by “nervous shorts”.  Similarly, Goldman Sachs argues that Gold’s recent gains are a result of transient factors, implying prices are expected to grind down from here.

On the other side of the argument is Dundee Capital Markets’ chief economist Martin Murenbeeld, one of the most accurate Gold forecasters in recent years, who believes bullion is likely to end 2014 at $1,367 per ounce, before climbing to $1,438 in 2015.

The outcome of the parliamentary elections in India – a huge majority for Narendra Modi’s Bharatiya Janata Party – should be long-term Gold bullish.  Investors have been keen on Modi’s pro-business platform, as evidenced by the $332 billion increase in value of Indian equities since the BJP named him as its candidate for Prime Minister last September.  A stronger economy in India – the creation of new wealth – should ultimately lead to increased demand for Gold.  Up until last year, when it was overtaken by China, India was the world’s largest consumer of bullion.  The incompetency of India’s now ousted government forced it to impose various restrictions on the Gold trade in that country, over the last year in particular, and an easing of those restrictions is expected during the second half of this year.

A 1-year chart for Gold shows a rising RSI(14) trendline while modest buy pressure has replaced sell pressure which was dominant from late March until late April.  Gold’s “moment of decision” is drawing near – expect a significant move over the summer, hopefully to the upside.

Silver gained 19 cents last week to close at $19.34.  Copper climbed 6 cents to $3.14.  Crude Oil jumped just over $2 a barrel to finish at $102.02, while the U.S. Dollar Index gained one-fifth of a point to 80.05.

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 of 2013  below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew “momentum traders” away from bullion.  June’s low of $1,179 was likely the bottom for Gold.  Extreme levels of bearishness emerged in the metal last year.  With the long-term bull market remaining intact, we expect new all-time highs in Gold as the decade progresses.  Inflationary pressures should eventually kick in around the globe after years of ultra-loose monetary policy.

Gold has traded between $1,287 and $1,299 so far today…as of 7:45 am Pacific, bullion is down $2 an ounce at $1,295…Silver is off 11 cents at $19.32…Copper is flat at $3.14…Crude Oil is up 38 cents at $101.88 while the U.S. Dollar Index is unchanged at 80.00…

India’s Bharatiya Janata Party has scored a landslide victory in national elections, setting the stage for its pro-business leader, Narendra Modi, to become the country’s next prime minister…the Indian National Congress Party suffered the most crushing defeat in its 128-year history as results were released today…voters were furious over Congress’ inability to address corruption, unemployment and the sputtering economy…with 815 million eligible voters, 915,000 polling stations, and nine days of voting over five weeks, India has finally completed the largest parliamentary election the world has ever witnessed…

An economically stronger India would no doubt be very positive for Gold, and Modi had the backing of the Gold lobby in India with the bullion industry in a dire state due to government mismanagement of the economy…severe Gold import restrictions were introduced – it’s believed Modi’s regime will ease or eliminate those – in an attempt to deal with the country’s current-account deficit…Modi is viewed as being very favorable toward Gold and made these comments in the past regarding bullion:  “We have not seen Gold just as money, it is related with all aspects of our social life. We have always attached the term ‘Gold‘ with anything good in our life…In our society, Gold is connected with security, respect and a friend in need during hours of crisis. It is also related to the well-being of our daughters through exchange of the matter during marriage times…After a doctor, the Goldsmith is the most trusted man in the family.”

CME Group is lowering margins for Gold and Silver futures after of the close of business today…

SPDR Gold Trust, the world’s biggest Gold-backed exchange-traded fund, showed the first inflow in a month yesterday…holdings in the fund rose 1.79 tonnes to 782.25 tonnes…data showed that hedge fund Paulson & Co, the largest institutional investor in SPDR, kept its stake in the fund unchanged in the first quarter as bullion prices rebounded from their biggest annual loss in 32 years in 2013…

The volume of Canadian mining and metals deals fell 51% year-on-year in the first-quarter of 2014, but there was some improvement quarter-on-quarter, according to Ernst & Young’s Capital Confidence Barometer report released yesterday.  “Low first-quarter deal numbers actually mask growing confidence across the sector,” said Bruce Sprague, EY’s Canadian mining and metals leader, in the report.  “Deal value may have fallen 51%, and volume 13%, in the first-quarter over (first-quarter) 2013, but we’ve already seen increased desire to do deals in Canada.  Transaction activity will come down to whether companies with an eye on mergers and acquisitions can find the right opportunity.”

Asia

China’s Shanghai Composite gained a point overnight to finish the week at 2026…Japan’s Nikkei fell 201 points to close at 14097, while India’s benchmark Index rose to a fresh record high following news of the landslide win for Modi and the BJP…

Europe

European markets are slightly lower in late trading overseas with continued anxiety over slow growth, low inflation and hefty valuations…

North America

The Dow is off 11 points as of 7:30 am Pacific…a monthly gauge of U.S. consumer sentiment fell in May as a gloomy view on income growth clouded an otherwise positive economic outlook, a survey released this morning showed…the Thomson Reuters/University of Michigan’s preliminary May reading on the overall index on consumer sentiment came in at 81.8, down from 84.1 the month before…it was also below the expectation of 84.5 among economists polled by Reuters…

The TSX is down 56 points while the Venture is up a point at 976 as of 7:45 am Pacific…

Below is a 6-month Dow chart that demonstrates the strong support the Dow continues to have in the immediate vicinity of its 50-day moving average (SMA) which it touched during yesterday’s session…the combined 268-point drop the last two days unnerved some investors but followed five straight days of gains and a new all-time record high…in a worst-case scenario, it’s difficult to imagine the Dow not holding support at its 200-day SMA, so the downside from current levels certainly appears limited…

Updated Venture Chart

As we’ve noted repeatedly, the Venture is underpinned by tremendous chart and Fib. support ranging from the 940’s into the 980’s, so it’s currently trading within that wide band which is expected to hold prior to the next wave higher…this test of support is normal and healthy, a necessary part of the process as this new overall bullish phase in the market matures…keep in mind, the rising 200-day (SMA) is currently sitting in the low 960’s…

This 6-month daily chart shows the “choppiness” in the market since late March…a test of the 200-day would not be surprising, along with some basing time, prior to a reversal to the upside…all charts clearly show that the primary trend remains bullish – that’s the key point…

Garibaldi Resources Corp. (GGI, TSX-V) – Interview Clip (Excerpt 1) With President/CEO Steve Regoci

BMR conducted a fascinating interview yesterday with Garibaldi Resources Corp.’s (GGI, TSX-V) Steve Regoci that covered a wide range of topics, from the company’s bonanza grade Silver drill results reported Wednesday (the second hole at Silver Eagle is under way) to events in the Sheslay Valley…below is a first short excerpt of that video interview – a longer Part 1 version will be posted by tomorrow, followed by more next week…

With regard to Doubleview Capital Corp.’s (DBV, TSX-V) results that were released Wednesday, Regoci had the following comments:

“Doubleview has something going there and I think it’s going to be big…I understand that the markets want every hole to be a glory hole, but I think early on – the distance from where they drilled initially and some of these other targets, and from what our geological crew knows – we’re very excited.  The fact that it (the Hat discovery) is 9 km away from the Sheslay porphyries that Prosper is about to start drilling, it just really speaks to the scale, the magnitude of the district.  The mineralization is very, very prevalent.  We expanded the Grizzly a couple of months ago, and we were lucky to acquire the Hat East prospect.  And I think Doubleview is in a great position.  Ashburton’s got some great ground, and we’ve now got the ground right beside Ashburton.  We believe that structure extends right onto Hat East.”

Garibaldi, of course, is the largest landholder among juniors in the Sheslay district with a whopping 262 sq. km, and Regoci said his team is quickly and efficiently working through the process of prioritizing drill targets as GGI and other companies prepare for a major ramping up of exploration in the area…

Click on the arrow to view the short version of Part 1 (Rodadero drill results) of our Regoci interview excerpt…

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

Probe Mines (PRB, TSX-V) launched a 40,000-metre drill program this week at its Borden Lake Project in northern Ontario, aided by four rigs that will be focused on infill drilling in the high-grade zone…regional exploration and drilling are planned for the summer…after climbing to an all-time high of nearly $4 in mid-March, PRB unwound a technically overbought condition by dropping in half – other such declines in 2012 and 2013 presented great buying opportunities as you can see on the chart below…a strong support band exists between $2 and $2.20…PRB rallied as high as $2.55 yesterday where it met resistance at its 200-day SMA…expect more basing and a possible re-test of the support band before PRB kicks back into gear…PRB is up 2 cents at $2.45 as of 7:45 am Pacific…

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

Gold has traded between $1,291 and $1,307 so far today…as of 7:45 am Pacific, bullion is down $5 an ounce at $1,301…Silver is off 20 cents at $19.54…Copper is down 2 cents at $3.14…Crude Oil has retreated 55 cents to $101.82 while the U.S. Dollar Index is off its highs of the day and is now almost flat at 80.06…

Total Global physical Silver demand rose by 13% in 2013 to an all-time high, according to “World Silver Survey 2014″, released yesterday by the Silver Institute…this was primarily driven by the 76% increase in retail investment in bars and coins coupled with a sturdy recovery in jewelry and silverware fabrication…on the supply side, Silver scrap fell by 24%, experiencing the largest drop on record to reach its lowest level since 2001…the Silver price averaged $23.79 in 2013, the third highest nominal average price on record, in a particularly volatile year for the entire precious metals complex…

Total physical demand for Silver stood at a record 1,081 million ounces last year…the largest component of that demand – industrial applications – dipped by less than 1% to 586.6 million ounces, to account for 54% of total physical Silver demand…Asia, however, experienced a 3% increase in Silver industrial demand, led by China, where a continued recovery in the electrical and electronics sector, along with gains in the Chinese ethylene oxide industry, took total Asian industrial off-take to a new high…Japan also experienced gains in Silver industrial demand…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 23 points overnight to 2025 while Japan’s Nikkei was off 108 points to 14298…Japan’s first quarter GDP grew at an annual rate of 5.9%, its fastest pace since Q3 2011…

Europe

European markets are down moderately in late trading overseas after some lackluster growth data from France, the Netherlands, Italy, Portugal and the euro zone as a whole…investor concerns are centering around deflation in Europe, hefty valuations and of course ongoing tensions in Ukraine…in an ECB survey released today, professional forecasters cut their outlook for inflation in 2016, leading to fears that the region could be heading for stagnation…

North America

The Dow is down 137 points as of 7:45 am Pacific…U.S. jobless claims unexpectedly tumbled to a pre-recession low, but countering that positive news this morning was U.S. industrial output which fell at its fastest rate in more than 18 months in April…production at the nation’s mines, factories and utilities slipped 0.6% last month, the largest decline since August 2012, after an upwardly revised 0.9% gain in March, the Federal Reserve stated this morning…consumer prices ticked up 0.3% as expected, recording their largest increase in 10 months in April – a little inflationary kick is actually good news…

The TSX has slipped 111 points through the first 75 minutes of trading while the Venture is off 9 points at 983…

Garibaldi Resources Corp. (GGI, TSX-V) Update

The grades reported yesterday by Garibaldi Resources (GGI, TSX-V) in first-ever drilling at its Rodadero North Project in central Sonora State, Mexico, were almost astonishing…as high as 245 oz/ton Ag within a 7-metre zone that averaged 65 oz/t Ag or 2,010 g/t…GGI produced a very pleasant surprise for the market and was rewarded as the stock pushed through resistance at 24 cents to a new 52-week high of 27 cents…if you look at the map of Rodadero below, you can see how this developing situation could have some serious “legs” to it with so many targets…the second hole is being drilled 50 m to the south of Silver Eagle SE-14-01…we heard an interesting comment from one investor yesterday – Garibaldi should have called the Silver Eagle target the “Silver Beast” given the whopping grades in this first hole that are also so close to surface…

There are not only high-grade Silver targets in this area, identified through extensive mapping, sampling and the use of hyperspectral remote sensing technology, but high-grade Gold possibilities as well…with GGI also finding success at La Patilla, and also the Grizzly in the Sheslay Valley where the company controls more than half of the mineralized corridor outlined to date, the outlook for Garibaldi has never been better in our view…

Below is the map showing GGI’s Rodadero North and South Projects as taken from the GGI web site…

GGI 4-Month Daily Chart

Below is an updated GGI chart from John that shows a confirmed breakout appears to be unfolding, driven by yesterday’s strong news and high volume…the next measured Fib. resistance level is not a price target, just a theoretical level based on Fib. analysis, but John’s Fib. numbers have proven to be quite accurate…GGI is up 1.5 cents at 26.5 cents as of 7:45 am Pacific…

Doubleview Capital Corp.’s (DBV, TSX-V) “Discovery” That Investors May Have Overlooked Yesterday

Doubleview Capital’s (DBV, TSX-V) news release yesterday seemed about as long as the Golden Bear access road, and investors were given little time to digest it, which partly explains why some important parts in our view were overlooked by many investors – hence the unfortunate sell-off yesterday…all it takes in today’s market is just one trigger-happy investor to hit the sell button, perhaps for no reason related to whether results are good or bad – as Prosper Gold Corp. (PGX, TSX-V) discovered last October – and selling begets selling…we didn’t have time to fully digest DBV’s news until last evening and we’re still conducting research on it…we hope to shed much more light on this Hat Property news by early next week…

Interestingly, buried almost at the very bottom of DBV’s lengthy news release yesterday, were the words, “The company is working closely with local contractors and stakeholders with a view to resuming property work in June (the highlighted part is our emphasis)…DBV still has money in the bank and every reason to get back to the Hat as soon as possible for more drilling – “the complete drilling outfit remains on the property” as reported yesterday – for reasons stated below…

DBV had a couple of “misses” in their most recent drilling but they also made what could prove to be an important new discovery – drill hole HAT-12 (from a depth of 146 m to 436 m) passed through “the top section of a syeno-gabbro intrusion (Sheslay red stock) that has not previously been recognized in the district.”  That’s an important development and it could be hugely significant as it may represent an important change in the Hat model…and the question is, what’s the potential size and shape of this red stock intrusive that could host higher grades?…you’ll notice that in HAT-12, which returned a 110-m interval grading 0.31% Cu, 0.38 g/t Au and 0.54% CuEq, within a wider section that returned 283 m of 0.31% CuEq, the Gold grades were better than the Copper grades…this hole is different in some important respects than any other drilled so far at the Hat, and it was collared 152 m west and 50 m south of discovery hole HAT-11, and inclined at -60 degrees to the south…very interesting, and more needs to be learned…in every round of drilling so far, Doubleview has moved this property forward…President and CEO Farshad Shirvani is a bulldog and we suspect he’s more fired up than ever after these latest results and the model that could be emerging here…

Besides the intrigue of HAT-12, an important part of the “Big Picture” remains the fact that the Hat is showing strong volume potential with the length of the “Lisle Zone” (Anomaly B) 1 km, and it remains open in all directions…

Investors who were hoping for a “glory” hole or a significant discovery at Anomaly C, more than 2 km from the original discovery at Anomaly B, were no doubt disappointed  yesterday…porphyry deposits have a complex nature, and it’s critical (albeit difficult sometimes) for investors to look beyond just the basic numbers to see how the model might be taking shape…DBV really does have a tiger by the tail at the Hat…they face some significant challenges but they’ve so far shown the ability to overcome any obstacles that have come before them…

With respect to Anomaly C, perhaps DBV has made a “technical” discovery with HAT-14…it’s a hole that reminds us a little of HAT-06 from the very first round of drilling that hit the edge of the mineralized porphyry at Anomaly B…HAT-14 was drilled southerly at -45 degrees with total length of 336.8 metres…it encountered low Copper-Gold mineralization throughout including a 26-m section, from 242 to 268 m, that averaged 0.21% Cu and 0.08 g/t Au…much more work needs to be completed at Anomaly C where very high chargeability readings have been recorded…as DBV stated yesterday, “Interpretation of drill hole analytical and other data from holes HAT-14 and HAT-15 appears to indicate that Anomaly C geology and mineralization is similar to that found at Anomaly B, and may be a continuation of the Lisle zone.”

DBV is down 1.5 cents at 23.5 cents as of 7:45 am Pacific but there’s no heavy volume sell-off this morning…technically, Fib. support is strong at 23 cents while the 20-cent area is another support level as witnessed last month…

Prosper Gold Corp. (PGX, TSX-V)

The Sheslay district is just beginning to heat up in our view, and stepping up to the plate for the beginning of what could be a long 2014 drill program is Prosper Gold…with the most advanced property in the district – the Star Project – PGX commences drilling any day now as indicated in their latest news release, and what’s critical is that right off the bat they’re going to begin stepping out from the Star deposit…as we’ve repeatedly stated, this is a barn burner of a property and it’s in the same hands that discovered the multi-million ounce Blackwater Gold-Silver deposit…we’ll have a lot more on Prosper and the Star Project next week…PGX is up a penny at 48 cents as of 7:45 am Pacific…

Midlands Minerals Corp. (MEX, TSX-V)

We mentioned Midlands Minerals (MEX, TSX-V) last week when it trading at 2.5 cents, and yesterday it was the second most active stock on the Venture with 4.5 million shares changing hands…the company announced encouraging results from underground sampling from one of its prospects at the Parlozi Project in Serbia which MEX has optioned from Reservior Minerals (RMC, TSX-V)…chip sampling provided a true width of 6 m grading 670.6 g/t Ag, 20.8% Pb, 0.13% Zn and 0.44 g/t Au…MEX will be commencing a drill program later this month to test the downdip extension of this mineralized zone…

The 91 sq. km Parlozi Project covers an extensive area of ancient mining that has received limited modern exploration…the Phase 1 program will test two out of six targets at Parlozi, searching for high-grade, Silver-rich, Zinc-lead veins and larger replacement zones in carbonate rocks – including an area with historic resources…MEX is well-funded with nearly $3 million in its treasury…it also has nearly 200 million shares outstanding, but at 3 cents there is certainly significant upside potential here for patient investors – especially leading up the drill program and anticipation of results…

Below is a 4-year weekly MEX chart…buy pressure has recently replaced sell pressure (dominant through most of 2013) as indicated by the CMF…fundamentally and technically, MEX is showing good potential entering the summer…MEX is unchanged at 3 cents as of 7:45 am Pacific…

Madalena Energy Inc. (MVN, TSX-V) Chart Update

We continue to keep a close eye on some of the top plays in the energy sector on the Venture, and certainly Madalena Energy (MVN, TSX-V) is one of those…below is an updated 2.5-year weekly chart from John that shows how strong support has been holding around the 60-cent level…

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

Gold has traded between $1,293 and $1,310 so far today…as of 8:30 am Pacific, bullion is up $10 an ounce at $1,305…Silver is 26 cents higher at $19.79…Copper is up 4 pennies at $3.16…Crude Oil is up another 79 cents at $102.49 after news yesterday that the U.S. government is re-examining its crude-oil export ban in light of growing domestic oil production…the U.S. Dollar Index, meanwhile, has fallen slightly to 80.04…

Official customs data from India show imports there fell 74.1% year-over-year in April, the first month of the fiscal year 2014-15, according to HSBC.  “Paradoxically the drop in imports, which shows a decline in demand and is therefore ostensibly bearish, could be viewed as longer-term bullish. This could be case if the drop in Gold imports helps boost the chances of an easing of restrictions that the government imposed last year to cut the current account deficit,” HSBC stated.  Currently there is a 10% import tax on Gold, along with administrative controls to reduce the current account deficit. “India’s main opposition Bharatiya Janata Party, which may now form the next government, has mentioned the likelihood that they will ease import restrictions on Gold imports, to combat the jump in smuggling. A revival in Indian demand would be gold-friendly,” HSBC stated.  Results of the multi-phase elections in India will be known at the end of the week…

Tragedy in Turkey – the Turkish government announced today that so far, 201 miners are known to have lost their lives and at least 80 have been injured in a coal mine explosion and fire yesterday in the western province of Manisa…

Today’s Markets

Asia

Asian markets were relatively quiet overnight…China’s Shanghai Composite slipped 3 points to close at 2048, while Japan’s Nikkei fell 20 points after a 2% rally Tuesday…Japanese wholesale prices rose an annual 4.1% in April – encouraging news given deflationary concerns there…

Europe

European shares were mixed today…industrial production across the 18 countries that share the euro fell in March, a reminder that the currency area’s economic recovery remains modest and vulnerable to setbacks…the EU’s statistics agency reported today that output from factories, energy companies and other utilities was down 0.3% from February, and 0.1% from March 2013…meanwhile, U.K. unemployment fell to its lowest level in over five years, while wage growth in the country rose by more than inflation for the first time since 2010…

North America 

The Dow is down 52 points as of 8:30 am Pacific…yesterday, the Dow rose to an intra-day record of 16,736 while the S&P 500 crossed 1,900 for the first time…U.S. producer prices posted their largest increase in 1-1/2 years in April as the cost of food and trade services surged, hinting at some inflation pressures at the factory gate…the Labor Department reported this morning that its seasonally adjusted PPI for final demand rose 0.6%, the biggest gain since September 2012…economists polled by Reuters had forecast prices received by the nation’s farms, factories and refineries rising 0.2 percent…in the 12 months through April, producer prices advanced 2.1%, the biggest gain since March 2012, after rising 1.4% in March…consumer price inflation numbers will be reported tomorrow…

Below is a Dow “seasonality chart” going back two decades.  Interestingly, the weakest four months of the year have been May through August…

The TSX is up 13 points while the Venture has gained 6 points to 994 as of 8:30 am Pacific…Doubleview Capital Corp. (DBV, TSX-V) has been halted, pending news, which we assume will be drill results from the Hat Property – perhaps not all of the results considering the most recent drill program didn’t wrap up until near the end of last month…in this business, good news usually travels fast – bad news typically travels by pony express (positive sign)…the Sheslay district could ignite again in a major way if DBV produces one or more stellar holes from April drilling…a “hit” on Anomaly “C”, in particular, would be a game-changer as it’s more than 2 km from discovery holes HAT-11 and HAT-08…

Garibaldi Drills Bonanza Grades At Rodadero – 50-Metre Step-Out Hole Commences

What’s so impressive about Garibaldi Resources‘ (GGI, TSX-V) drill hole reported this morning from its Rodadero Project in Mexico is not only the grade – a whopping 65 oz/ton over 7 metres (23.1 feet) – but the fact that this is from first-ever drilling at the property…it’s not often a company reports a hit like that the first time it sinks a drill bit into the ground…

What was originally a single “test” hole has suddenly morphed into something that could become much bigger with some serious “legs” to it…a second drill hole at the “Silver Eagle” target has now commenced, a 50-metre step-out to the south of SE-14-01…highly interesting, also, is that Garibaldi has reported the discovery of 9 other Silver and Gold targets on its large Rodadero (North & South) package – much more to this story, in all likelihood…

This all comes on the heels of solid first-ever drill results at La Patilla, including 10.4 g/t Au over 8.5 m near-surface, and in advance of follow-up drilling at La Patilla, initial drilling at Iris, and of course the Big Show – first-ever drilling at the Grizzly where Garibaldi controls the largest piece of the pie as far as the Sheslay Cu-Au porphyry mineralized corridor is concerned…

GGI is demonstrating expertise on the ground, and of course it’s also one of the few junior exploration companies with some cash flow as it continues to earn royalty income from a pilot coal program at Tonichi…in addition, GGI hasn’t had to carry out a financing since 2009 – something almost unheard of in a market environment where so many companies have been forced to severely dilute their share structures with cheap financings just to stay alive…

This is truly a special situation (very well managed company) with the opportunity for massive gains over the next few months given an usual “confluence” of events – several potential triggers that offer significant exploration upside from high-grade Gold and Silver opportunities to a dominant land position in what could easily develop into one of the most exciting area plays (Sheslay district) B.C. has witnessed in many years…

Technically, GGI appears poised for a major breakout as you’ll see in an updated chart from John…first, though, a look at a very pretty picture and what seems to be massive sulphides from Silver Eagle drill core posted on the Garibaldi web site this morning…

Garibaldi hits at Rodadero – drill core (photo from GGI) from Silver Eagle target where GGI appears to have cut into massive sulphides in a 7-metre zone near-surface in the first hole.

GGI 10-Year Monthly Chart

Significant progress on the ground by Garibaldi is reflected in this very bullish long-term monthly chart…the pattern is similar to the one that started in early 2009 at under a nickel and peaked in early 2011 at more than 10 x that level…RSI(14) is following a well-established uptrend, accumulation is strong as shown by the CMF, and the bullish trend is gaining strength according to the ADX indicator…given today’s news, the likelihood of a confirmed near-term breakout has increased substantially in our view…indeed, GGI has broken the 24-cent barrier in early trading and is up 3.5 cents at 25.5 cents as of 8:30 am Pacific…the 50-day moving average (not shown on this chart) has reversed to the upside, another  bullish sign…

Ashburton Ventures Inc. (ABR, TSX-V)

If the market likes what Doubleview has to report, then it’s likely off to the races for Ashburton Ventures (ABR, TSX-V) which holds very strategic ground within just 1 km of DBV’s original discovery holes (they’re also contiguous to the western border of GGI’s Grizzly, and that will come into play very soon)…the structural trend is NW/SE, going toward the Hackett, and significant Copper-Gold showings run along the western border of the Hackett according to historic reports…the Hackett Property has never been previously drilled or systematically explored, and Ashburton has commenced a work program which is expected to lead to summer drilling…

Not long ago, DBV was trading around a nickel…it has soared…a year ago, Garibaldi was trading at a nickel and it has soared as well…Ashburton could also easily soar along with another low-priced Sheslay play, Alix Resources (AIX, TSX-V)…and of course we’re extremely bullish on Prosper Gold (PGX, TSX-V) which has the most advanced property in the district – the Star Project – with drilling commencing within days…

ABR 2-Year Weekly Chart

Below is an updated 2-year weekly ABR chart…as of 8:30 am Pacific, ABR is up half a penny at 6 cents…technically, what to watch for is a potential close above the horizontal channel on strong volume…this is looking very promising…

Fission Uranium Corp. (FCU, TSX-V) Updated Chart

Fission Uranium (FCU, TSX-V), which reported more solid results from PLS South yesterday, appears to be on the rebound after touching support at $1.04 last Friday during the Venture’s nearly 20-point intra-day slide…below is an updated chart (7-month daily) from John…FCU is unchanged at $1.22 through the first two hours of trading…

Platinum Update

Platinum’s appeal is soaring in India, the world’s second-largest consumer of the precious metal…though Platinum costs more than Gold, demand is increasing elsewhere in Asia, too – a rise that comes at a time when strengthening economies in the West appear likely to soak up more of the metal for industrial uses…output has been curtailed in South Africa, the world’s largest producer…

China remains the heavyweight in terms of Platinum jewelry demand…buyers there account for around 65 metric tons of the near 100 tons sold over retail counters world-wide each year, according to The Wall Street Journal…Chinese demand may rise by 5% in 2014, but India, whose consumers last year took about 158,000 ounces, or a bit less than five tons, is expected to see growth of as much as 35% this year…that’s according to the marketing and promotion organization Platinum Guild International…other sizable consumers are the U.S. and Japan where demand is forecast to increase 11% and 1.2%, respectively…

Below is an 8-month daily Platinum chart from John…the metal is testing resistance – the trend is bullish and a near-term breakout appears quite likely…

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

Gold has traded between $1,288 and $1,300 so far today…as of 7:00 am Pacific, bullion is up $1 an ounce at $1,297…Silver is 2 cents higher at $19.52…Copper is down a penny at $3.13 after a strong advance yesterday…Crude Oil is up 41 cents to $101.00 while the U.S. Dollar Index has added one-tenth of a point to 79.99…

Gold has been building a base between the $1,270’s and $1,280’s, in the immediate vicinity of its rising 100-day moving average (SMA) which has been tested in six out of the last 12 sessions entering today…since the middle of last month, Gold has been caught in a range between $1,285 and $1,315…the stand-off between pro-Russian separatists and government forces in Ukraine has clearly been a major supporting factor for bullion over the past month, preventing a break lower…

SPDR Gold Trust, the world’s top Gold-backed ETF, recorded an outflow of 2.39 tonnes to 780.46 tonnes on Monday, the first outflow since May 2…

BNP Paribas gave a fresh Gold forecast yesterday, its first since November…the bank revised up its average 2014 Gold price estimate to $1,255 an ounce from $1,095 previously due to a number of factors that have led to strong technical support around $1,200 an ounce and a range-bound market…BNP Paribas listed incremental buying into ETF’s by fund managers, Asian and Middle Eastern physical demand that was more resilient than expected, and geopolitical tensions in Ukraine as main factors contributing to its higher price forecast…

Meanwhile, UBS lowered its short-term Gold price forecasts today, citing a “host of factors”…the bank cut its one-month Gold forecast to $1,250 an ounce from $1,280 an ounce and reduced its three-month Gold forecast to $1,300 an ounce from $1,350 an ounce…UBS said negative factors include expectations for tame physical demand, the risk of further ETF outflows, a stronger U.S. dollar, positive U.S. economic data and weak investor sentiment…

Today’s Equity Markets

Asia

China’s Shanghai Composite, after a powerful jump Monday, retreated 2 points overnight to close at 2051…a slew of Chinese economic data was released today with April industrial output, retail sales and fixed assessment investment all coming in slightly below Reuters’ forecasts…the numbers follow yesterday’s reports that showed new banking lending and total social financing weakening last month…

Japan’s Nikkei surged 276 points overnight to a one-week high, closing at 14425…

In India, the benchmark Index hit a record high in early trading after major exit polls last night indicated that Narendra Modi – considered a business-friendly candidate – would win the general election and become India’s next prime minister…official results will be announced at the end of the week…

Europe

European markets are up modestly in late trading overseas…the Stoxx Europe 600 Index closed at a more than six-year high yesterday of 340.96… the euro weakened today on another report that the Bundesbank was open to unconventional easing measures by the ECB…The Wall Street Journal reported that the Bundesbank will back a rate cut if upcoming ECB projections for 2016 inflation are lower than expected…

North America

The Dow and S&P 500 hit record closing highs yesterday after M&A activity and a rebound in Internet and biotechnology shares helped brighten Wall Street’s view of the economy…through the first 30 minutes of trading today, the Dow is up another 28 points…

U.S. small business sentiment jumped to its highest level in 6 1/2 years in April, which should bolster hopes of an acceleration in economic activity in the second quarter…the National Federation of Independent Business said today that its Small Business Optimism Index rose 1.8 points to 95.2 last month, the highest reading since October 2007 (ironically, when the economy was on the cusp of its worst recession since the 1930’s)…

The TSX is 16 points higher as of 7:00 am Pacific…

Balmoral Resources (BAR, TSX) Update

Balmoral Resources (BAR, TSX) impressed the market yesterday with high-grade Gold assays from winter drilling at its promising Martiniere Property, 45 km east of the Detour Gold mine…yesterday’s results further demonstrate that Martiniere hosts an expanding, high-grade Gold system…an intercept of 1,138 g/t Au (33 ounces per ton) over 4.87 m (including an eye-popping and property record 9,710 g/t Au or 312 ounces per ton over 0.57 m) was returned from the Bug Lake Footwall Zone which has generated other high-grade results in the past…drilling has successfully extended the Bug Lake and related Gold zones to a vertical depth of 400 metres…

Plans for the summer 2014 drill program at Martiniere are currently being finalized, with drilling expected to resume in late June or early July…the focus will be on additional expansion and infill drilling along the northern segment of the Bug Lake Gold trend, additional testing of the newly identified steep along the southern extension, and testing of several other high-priority targets within the broader Martiniere Gold system…the important Sunday Lake Deformation Zone traverses the southern portion of Martiniere and is largely untested across the property which is centrally located within BAR’s 82 km Detour Gold Trend Project…

Below is a 1-year weekly BAR chart from John…a breakout above Fib. resistance at 91 cents (now new support) occurred yesterday with BAR climbing yesterday to its highest level ($1.09) since early 2013 when it hit nearly $1.30 a share…note that the stock gapped up yesterday…it’s possible, on some consolidation, that the gap could be filled in the near future as a test of fresh support – such an event would certainly present an excellent buying opportunity in our view as the primary trend remains very bullish…the rising 20-day SMA has provided strong support throughout the year – look for a continuation of that…BAR is off 7 cents at 97 cents through the first 30 minutes of trading…

Copper Update

Copper prices jumped to their highest level in two months yesterday after China unveiled a blueprint for overhauling its capital markets, a move that investors hoped will spark economic growth in the metal’s largest consumer…concerns about China’s demand for Copper have whipsawed prices of the industrial metal this year…Copper slid to its lowest level in nearly four years in March and is now up 6.4% from that low…

Production delays in places such as Indonesia and Chile have limited the supply of Copper coming to markets, taking the edge off the expected surplus…Copper stored in warehouses licensed by the London Metal Exchange are at the lowest level since 2008, according to CQG data…

Below is an updated 6-month daily Copper chart from John…extreme oversold RSI(14) conditions emerged in March,, perhaps marking an important low for the year…Copper has been climbing within an upsloping channel since…buy increasing is increasing, and the next resistance level is $3.15…

Venture Exchange

The Venture is unchanged at 988 as of 7:00 am Pacific…

Further to yesterday’s piece, below is another Venture chart (declining issues) that provides additional evidence of a reversal in the primary trend…the SMA-20 for declining issues has reversed to the upside in 2014 as it did in early 2010…

North American Nickel (NAN, TSX-V)

We have high hopes for North American Nickel (NAN, TSX-V) this summer as it gears up to drill its 100%-owned Maniitsoq Nickel sulphide Project in southwestern Greenland…in addition to the robust geological potential of this project, as demonstrated by last year’s results, Nickel has been the best-performing commodity of 2014…NAN is already well-funded but announced last week it has arranged a private placement at 33 cents to raise gross proceeds of up to $9.4-million…Sentient intends to invest its pro rata amount in the financing in order to maintain its 41.3% position in the capital of the company…

On this 2.5-year weekly chart, you’ll see that the CMF indicator is showing the strongest buy pressure in NAN in nearly two years…excellent support in the mid-30’s at the rising 50-day SMA…the next Fib. measured resistance is 51 cents (not a price target, just a resistance level based on Fib. analysis)…NAN is unchanged at 40 cents as of 7:00 am Pacific…

Papuan Precious Metals Corp. (PAU, TSX-V)

One of the higher quality situations dipping its toes into waters of the medical marijuana business, while maintaining its mining assets, is Papuan Precious Metals (PAU, TSX-V) whose CEO and Chairman is Fission Uranium Corp.’s (FCU, TSX-V) Dev Randhawa…PAU made a run to as high as 15.5 cents May 2 but has since pulled back to 9.5 cents, a price that has us more interested as it’s within a band of Fib. support…the rising 20-day SMA is at 9 cents and the company announced April 29 that it intends to undertake a $500,000 non-brokered financing at 10 cents per share…

Below is a 3-month daily PAU chart from John…RSI(14) has been unwinding from overbought conditions…PAU is unchanged at 9.5 cents as of 7:00 am Pacific…

Note:  John, Jon and Terry do not hold share positions in BAR, NAN, FCU or PAU…

Gold has traded between $1,287 and $1,305 so far today…as of 7:30 am Pacific, bullion is up $10 an ounce at $1,300…Silver is 44 cents higher at $19.59 (see updated Silver charts at the bottom of today’s Morning Musings)…Copper has jumped 6 cents to $3.14…Crude Oil is 71 cents higher at $100.70 while the U.S. Dollar Index is off slightly at 79.82…

Gold has knocked on the door of its rising 100-day moving average (SMA) in the mid-$1,280’s in six out of the last 11 sessions, including today, and has managed to hold that support so far…as John’s updated 1-year Gold daily chart showed in our Week In Review And A Look Ahead posted Saturday, strong Fib. support runs from the low $1,250’s (38.2%) to $1,291 (61.8%)…

The tense situation in Ukraine continues to give Gold a risk premium and should help limit any selling…fresh physical demand would be helpful…on that note, the winds of political change are brewing in India and the final outcome of protracted and historic national elections in that country will be known at the end of this week…63-year-old Narendra Modi, who has been advocating sensible pro-growth policies and has won the favor of the Gold lobby in India, is expected to lead the BJP (Bharatiya Janata Party) to victory…this should lead to an easing of the Gold import restrictions in India, and usher in new economic policies to boost a faltering economy…such developments would certainly be helpful for the Gold market, short-term and longer-term…

Today’s Equity Markets

Asia

China’s Shanghai Composite posted an impressive 42-point gain overnight to close at its highest level in two weeks, 2053…investors cheered a blueprint of capital market reforms unveiled Friday by the State Council that should boost market liquidity in China…the reforms include proposals to further open up the country’s stock and bond markets, relax foreign ownership of companies and pursue both inward and outward investment…

China will not use any large-scale stimulus to boost its economy, Central Bank Chief Zhou Xiaochuan was reported as saying on Saturday, in response to speculation that authorities might lower reserve requirements for banks to spur growth…Xiaochaun, who was speaking at a closed-door session at the Tsinghua University, was also reported by Phoenix New Media Ltd as saying the central bank would only “fine-tune” its policy to counter economic cycles…

Japan’s Nikkei closed 42 points lower at 14150…

Europe

European markets are up strongly in late trading overseas with resource companies leading the way…

North America

The Dow hit a new record high this morning and is up 93 points at 16676 as of 7:30 am Pacific…the TSX has jumped 80 points while the Venture is off a point at 990…

CDNX:  “Sell In May And Go Away?” Not This Time – Rather, “Buy In May And Avoid Dismay” 

Updated CDNX Charts – Why The Venture Is In A Bullish New Phase

We have some important new charts this morning that help explain why the Venture’s technical posture has radically changed in recent months, and how this market has entered a bullish new phase that could accelerate rapidly during the second half of the year…refer to Saturday’s Week In Review And A Look Ahead for an examination of a 5-year weekly chart that shows the incredible support underpinning the CDNX between the 940’s and the 980’s…a reversal to the upside in the Venture’s 300-day moving average (SMA) is also looming on the horizon, a critical technical event that could quite possibly occur by the end of June…the 200-day has already reversed and forms part of that rock-solid support between the 940’s and the 980’s…

There’s ample evidence to suggest that a very robust – indeed, a STELLAR – third quarter is in the works for the Venture, powered by strong technicals and the good possibility of fresh discoveries…selectivity will be key – if you’re in the right plays, fortunes could be made in our view over the next 3-6 months given the current set-up and how things could unfold…

Below is a 10-year monthly chart that shows the “Big Picture” of what is likely emerging…

MACD Momentum Indicator

First, take a look at the MACD (Moving Average Convergence Divergence, a momentum indicator that measures the difference between short-term and long-term moving averages)…the MACD has proven to be a highly reliable trend indicator for the Venture…

Three important reversals are circled in blue at the top of this chart going back to 2009…the first reversal marked a wise entry point for investors – many who “loaded up” at this time made a lot of money…the second reversal in early-mid 2011 was a sell signal and a clear indication of pending trouble…the third reversal began forming late last year and has been confirmed through these first several months of 2014…combined with many other indicators, including Fib. numbers and a now-rising 200-day SMA, the evidence is overwhelming that the Venture bear market is over and a bullish new cycle has started…momentum should pick up significantly in Q3…

ADX Trend Indicator

What’s also critical is that there has been a bullish +DI/-DI crossover in the ADX trend indicator as shown at the bottom of this chart…-DI crossed above +DI, marking a bearish primary trend reversal during the second quarter of 2011…it took nearly three years, during which there was a 65% drop in this market, but a bullish reversal (+DI moving above -DI) finally occurred at the beginning of this year…that’s not a trend you want to bet against…

CMF Indicator – Money Flow  

We’ve now seen the longest period of Venture buy pressure on the 10-year monthly chart since 2009…money is flowing into the Index – this is critical…always follow the money…

Volume

Volume is one of the most important indicators of all (some would argue the most important)…Venture volume has picked up considerably since its lows of 2013…this volume increase has occurred at the same time as the trend reversal – very important…

New Uptrend Line 

This 10-year monthly chart shows a lot, so it might be easy for some to miss something quite significant – note how a new uptrend line has formed from the low of last June (this is indicated by the green line in the big circle on the right side of the chart)…

Venture 3-Year Weekly Chart

The Venture 3-year weekly chart was extremely helpful during the last quarter of last year in terms of identifying a major market reversal point…what occurred in October was a breakout above a long-term downtrend line…following that breakout, the downtrend line then became support, and the Venture repeatedly tested that support successfully until the end of December when it decided to take the path of least resistance which was up…

Notice the huge change in the RSI(14) pattern – it has been climbing an uptrend line since extreme oversold conditions emerged during the second quarter of last year when the Index bottomed at 859…buy pressure is strong and the Venture has recently been performing much better relative to Gold than it has at any point since 2011…

Venture 6-Month Daily Chart

This short-term chart shows RSI(2) has plunged to an extreme low of 3.58, consistent with the March and the late January/early February RSI(2) lows when the Venture found very strong support and reversed higher…while it’s possible that RSI(2) and SS could fall a little more, additional downside from current levels is indeed limited which adds further credence to the argument that the incredible support band ranging from the 940’s through the 980’s will hold…

Last week’s decline in the Venture was normal retracement activity, and more choppiness and testing of support could certainly occur near-term…but this is healthy and a classic accumulation opportunity as well…what we saw Friday – a 16-point intra-day reversal – was a bullish hammer and we’ll see if that carries any significance over the coming days…don’t get frustrated and impatient by the fact the Venture met resistance at 1050 in March…this healthy pullback has been less than 10%, and has also cleansed temporarily overbought conditions…

Doubleview Capital Corp. (DBV, TSX-V) Update

Last week was a powerful one for Doubleview Capital (DBV, TSX-V) as it soared from 26 cents to a new all-time high of 40 cents before settling Friday at 35 cents for a 31% weekly gain…speculation is obviously ramping up with regard to upcoming results after the company recently completed its first phase of 2014 drilling at the Hat to follow up on discovery holes HAT-08 and HAT-11…DBV’s April 30 news release stated that results from this latest drilling can be “expected within four weeks”…

What’s driving Doubleview is not just the potential of the Hat Property, given results to date, and the prolific nature of the Sheslay Valley, but the vision and steadfast determination of President and CEO Farshad Shirvani…during our Hat Property and Sheslay area visit a month ago, we were able to conduct a 1-hour video interview with Shirvani…we’ll be showing some excerpts of that next week…what that interview revealed is a very focused individual who understands the challenges he faces but has a vision and a game plan, including the right people surrounding him, to succeed…that’s what it takes in life to be a winner…the junior exploration business is no different…

“We’re going to have a very aggressive year, that’s my plan,” Shirvani told us.  “For that aggressiveness, the plan that I have, we need more than one rig.  I don’t know how many right now but we have it on the plan.  I’m really working on it, setting the blueprint.  My plan…the dream is…to have it (the Hat) at a level where we have a resource calculation by the end of this year – at least on the four anomalies that I’m planning to put into action.  I want to do it as I want to give the company what it deserves – and put it in as an asset of the company.” 

During our couple of days at the Hat, there wasn’t anything Shirvani wasn’t prepared to do – whether that meant cooking a meal, hauling equipment, prospecting, offering encouragement, or finding a new way to save some money for shareholders…it’s that kind of leadership that gives us confidence that Doubleview has a great shot at remarkable success…the same can be said, in fact, for all the companies active in the district which is one key reason we’re so bullish on the entire Sheslay Valley – interestingly and importantly, each company in the area has its own unique “people strengths” and we’ll explore that issue in more detail in the coming weeks…

DBV President and CEO Farshad Shirvani examines the reported outcropping mineralization at Anomaly C, more than 2 km W-NW of Anomaly B discovery holes HAT-08 and HAT-11 (BMR photo from early April site visit).

DBV 3-Year Weekly Chart

Below is an updated 3-year weekly DBV chart from John…with a confirmed breakout above 34 cents, what to watch for now is whether that level now holds as new support…the overall trend remains strongly bullish, as shown by the ADX indicator…the rising 50-day SMA (not displayed on this chart, currently at 26 cents) provides strong secondary support…ultimately, drill results will of course determine the stock’s fate, and there is risk in DBV as there is in almost any investment…never invest money you can’t afford to lose and never forget to take profits off the table from time to time…that said, nothing beats the leverage this industry provides, and the Sheslay Valley sure feels like it’s shaping up to become the hottest exploration camp B.C. has seen in many years…DBV is unchanged at 35 cents as of 7:30 am Pacific…

Nevada Sunrise Gold Corp. (NEV, TSX-V) Update

2014 is shaping up to be a very interesting year for Nevada Sunrise Gold (NEV, TSX-V) which holds 20.1% of the Kinsley Mountain Project as a JV partner with Pilot Gold (PLG, TSX)…the Western Flank target at Kinsley Mountain is producing impressive high-grade Gold numbers, and drilling has recently restarted there with one core rig and two RC rigs…

NEV is in the process of closing of a $2 million financing at 90 cents (t currently has just 19 million shares O/S after a 1-for-10 rollback late last year) to help fund its share of Kinsley Mountain and to advance its other Nevada Gold project, Golden Arrow, which is situated along the northeast margin of the prolific Walker Lane structural zone…

Technically, NEV’s near-term resistance is $1.20 as shown on this 3-year weekly chart while there should be very strong support between the Fib. 61.8% reracement level of 79 cents and the rising 50-day SMA, currently at 90 cents where the financing is being completed at…as always, perform your own due diligence – NEV can expected to be volatile, but Kinsley Mountain is looking very promising in our view and we’ll be continuing to keep a close eye on developments there…NEV is off 8 cents at $1.07 through the first hour of trading…

NEV 3-Year Weekly Chart

Petromanas Energy Inc. (PMI, TSX-V)

Another energy play our readers should have on their radar screens is Petromanas Energy Inc. (PMI, TSX-V) which is targeting high-impact oil and gas resources in Europe and Australia…PMI has been on the rebound since last summer when it bottomed at 8 cents…it has recently backed off from a 52-week high of 29 cents and is unchanged at 24 cents as of 7:30 am Pacific…the rising 50-day SMA, currently at 23 cents, has provided consistent support since last summer…below is a 3-year weekly chart…strong buy pressure has replaced sell pressure which was dominant since mid-2012…

PMI 3-Year Weekly Chart

Silver Short-Term Chart

Importantly, Silver continues to find support just below $19 at and near the top of a downtrend line…this is similar to the Venture pattern during the fourth quarter of last year when it, too, found support at the top of a downtrend line…RSI(2) on this 3-year weekly chart is at very low 4.9% while SS appears to be forming a bottoming pattern – combined with steady buy pressure, these are encouraging signs…the support band between $17.50 and $19.50 should therefore hold while the next major chart resistance is $22…

Silver Long-Term Chart

This 11-year monthly chart confirms that the metal has exceptional support just below $20…note that Silver has two downtrend lines it needs to break above…if and when Silver clears stiff resistance at $26, watch out – you’ll want to back up the truck and load up…

Note:  Jon holds a share position in DBV.