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Gold has traded between $1,098 and $1,114 so for today…as of 9:15 am Pacific, bullion is down $6 an ounce at $1,105…Silver has lost 27 cents to $14.44..Copper has eased off a penny to $2.44 but has still had a good week after the announcement of production cuts by Glencore…Crude Oil has slipped 92 cents to $45.00 on a bearish call by Goldman Sachs, while the U.S. Dollar Index has fallen one-third of a point to 95.22…resistance remains strong on the Dollar Index around 96 approaching next week’s critical Fed meeting…

Today marks the 14th anniversary of the Sept. 11th terrorist attacks…it’s sad and alarming how quickly some politicians forget these things, and the fact that threats to Canadian, American and global security are greater today than they’ve ever been…

Ira Epstein, director of the Ira Epstein division of Linn & Associates LLC, suspects that Gold mining companies will be following the same script as Glencore.  “I make mention of this simply because what Glencore’s doing is logical and likely going to take place in the Gold mining industry,” Epstein stated. “In other words, when you can’t increase demand, you cut back on supply if as a supplier you aren’t getting the return you need on your investment. Scale of course matters as small players don’t have the clout to impact prices like a Glencore does, but the larger Gold mining companies have that clout and down the road, they’ll have to be considering moves similar to that of Glencore’s.”

Gold is headed for a third weekly decline as almost half of the economists surveyed by Bloomberg predict an interest rate increase when Federal Reserve policy makers gather next week…the Fed meets next Tuesday and Wednesday with Janet Yellen also holding a post-statement news conference…38 of 78 economists surveyed by Bloomberg predict the central bank will increase its target rate after holding it close to zero since 2008…futures’ traders are less optimistic, and we’re siding with them…they’re giving only a 28% chance that the Fed will hike rates next week though that percentage rises sharply to 59% for a December move…the Fed, in our view, has missed its window to raise rates…

Oil Update

Goldman Sachs said this morning that the risk that Oil could fall much further is rising, with a persistent surplus requiring prices to remain lower for longer to rebalance the market.  “While we are increasingly convinced that the market needs to see lower Oil prices for longer to achieve a production cut, the source of this production decline and its forcing mechanism is growing more uncertain, raising the possibility that we may ultimately clear at a sharply lower price with cash costs around $20 a barrel Brent prices,” Goldman stated.

Meanwhile, the International Energy Agency (IEA) came out with a more bullish tone on Oil this morning…supply from countries outside of OPEC is likely to see its biggest drop in more than 2 decades next year, according to the IEA’s latest monthly market report released this morning…the IEA expects production from non-OPEC members such as the U.S. and Russia to fall by almost half a million barrels a day…

“The big story this month is one of tightening supply, with the spotlight firmly fixed on non-OPEC,” said the IEA, founded in 1974 to help countries co-ordinate a collective response to major oil-supply disruptions.

“Oil’s price collapse is closing down high-cost production from Eagle Ford in Texas to Russia and the North Sea, which may result in the loss next year of half a million barrels a day – the biggest decline in 24 years,” the group said in a note.

Today’s Equity Markets

Asia

Asian markets were quiet overnight with China’s Shanghai Composite finishing unchanged at 3200 while Japan’s Nikkei, after a volatile week that included the biggest single-day advance since 2008, closed down 35 points at 18264…

Europe

European markets were down modestly today…

North America

The Dow is up 67 points as of 9:15 am Pacific…in Toronto, the TSX has lost 102 points to 13344 while the Venture is down 2 points to 547, holding up well despite weakness in Crude and Gold today…

Wanted Technologies (WAN, TSX-V), a company we’ve highlighted at BMR that provides companies with valuable hiring trend and talent supply data, has jumped 50% this morning on a friendly all-cash takeover by CEB Inc. at $1.79 per share…yes, there are some good companies on the Venture that offer tremendous value and are actually building real businesses…

Equitas Resources (EQT, TSX-V) hit another 52-week high this morning of 18.5 cents as it continues to show impressive power in advance of drilling at the promising Garland Project 20 miles southeast of the Voisey’s Bay mine…as of 9:15 am Pacific, EQT is up a penny at 18 cents…we’ll have an updated EQT chart for our subscribers over the weekend…

TSX Updated Chart

RSI(14) oversold conditions have intensified on this 6-year TSX monthly chart while the rising 1000-day moving average (SMA) continues to provide broad support along with a Fib. band that stretches from 12517 to 13144…certain indicators (RSI-14, SS, -DI) are comparable to where they were in late 2011 when the TSX formed an important bottom, followed by a 45% move to the upside over the next 3 years…

Cardiff Energy Corp. (CRS, TSX-V) Update

The importance of good charting is a must when evaluating opportunities in the junior resource sector…the latest example is the situation with Cardiff Energy (CRS, TSX-V) which has soared 75% in the last 2 days since John’s bullish call Wednesday morning based on several indicators in a 3-year weekly chart…

CRS has had a volatile day…it climbed as high as 18.5 cents this morning before retracing to 13.5 cents… as of 9:15 am Pacific, it’s off a penny at 15.5 cents…Fib. resistance is strong at 22 cents, so the best short-term opportunity on this came recently when the stock sold off to Fib. support and its still-rising 300-day moving average around 8 cents…again, this stresses the importance of accumulating promising situations during periods of weakness and having some patience…

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

Stockwatch reported this morning that Doubleview Capital (DBV, TSX-V) has filed a lawsuit in the Supreme Court of British Columbia, with Talhltan Central Government President Chad Day the only named defendant in the suit that stems from the Hat Property incident in early July…the company’s complaint states that a group of blockaders wrongfully entered its camp, intimidated workers and caused the complete shutdown of drilling at the Hat…Doubleview is asking for a permanent injunction…

We’ll have more on this breaking story over the weekend…DBV is up 2.5 cents at 10.5 cents as of 9:15 am Pacific…

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

While Doubleview appears to be getting back on track with that encouraging news this morning, there is clearly also something brewing at Garibaldi Resources‘ (GGI, TSX-V) Grizzly Project as we speculated in a subscriber-only piece earlier this week…we’ll point out a couple of simple facts…in mid-August, GGI announced the following:

“Crews are mobilizing for a fresh round of surface exploration, commencing in the next few days, that will determine final drill targets at the 270-square-kilometre Grizzly project in northwest British Columbia’s prolific Sheslay district.

“Crews will be focusing on the highly promising Grizzly Central area as well as the newly acquired Golden Bear claims, featuring a historical high-grade Gold showing, adjoining Grizzly to the south.”

President and CEO Steve Regoci commented, “Indeed this will be a busy and exciting summer at the Grizzly as productive discussions with all stakeholders concerning this emerging world-class district are giving us great encouragement.”

Despite multiple and highly prospective targets elsewhere over a broad area on the western side of the Grizzly, for some reason GGI is focusing very intently on Grizzly Central, an extensive area of low relief, and readers would be wise to think that through…we’re speculating that something huge could be in the works here as 95% of Grizzly Central is covered by overburden which explains why this area of the Sheslay district was ignored historically…in fact, what’s underneath that overburden, which could be anywhere from a few feet to 50 feet in most places, could potentially be the district’s “mother lode” system fed by the Kaketsa heat engine to the west…this is a theory that has been gaining traction with some smart geologists over the past couple of years, and it’s quite possible that GGI has been assembling strong evidence to back it up – with the “truth machine”, a drill rig, ready to attempt to confirm it…

Below is a map posted by Garibaldi on its web site yesterday…the scale of the Grizzly is enormous – with a prominent “bull’s eye” at Grizzly Central…

The Association for Mineral Exploration British Columbia refers to the Sheslay district as “the #1 greenfield project in B.C.” and “one of the most promising grassroots mineral exploration areas in Canada.” 

There’s no question in our view that a 3rd discovery in the district is a growing and perhaps imminent possibility…

Dajin Resources Corp. (DJI, TSX-V) Update

This bears repeating…the Lithium space is hot, as demonstrated by the success of Pure Energy Minerals (PE, TSX-V) which has tripled in value since we introduced it to our readers in July…

For the more speculatively inclined, Dajin Resources (DJI, TSX-V) is worthy of our readers’ due diligence given its proximity to Pure Energy’s Clayton Valley Project in Nevada, and other Lithium properties it’s advancing…

Technically, this is a powerful-looking chart which we were tracking internally before posting for the first time earlier this week…Dajin is trading at a 2-year high, unchanged at 11.5 cents as of 9:15 am Pacific…

Critical Elements Corp. (CRE, TSX-V) Update

On Wednesday, we gave an update on Critical Elements (CRE, TSX-V) which was trading in the mid-20’s after announcing that it had signed a strategic collaboration agreement with a unnamed leading chemical company…this includes take-or-pay off-take for all products produced from CRE’s Rose Lithium-Tantalum Project…the feasibility study will be completed in collaboration with the strategic technical and commercial partner…should the feasibility study support the technical feasibility and economic viability of the project, the strategic partner will also have the option of participating in the project by providing equity in the project financing for an interest of up to 25%…

Technically, CRE has been showing increasing strength and appears likely to test the Fib. 61.8% Fib. level again which is 29 cents…has enough RSI(14) and other technical momentum to push through that area…

CRE is up 2.5 cents at 29 cents as of 9:15 am Pacific…

Lingo Media (LM, TSX-V) Update

Lingo Media (LM, TSX-V) made an important breakout earlier this year above a long-term downtrend line, and is also now showing some important earnings momentum that gives this speculative situation considerable promise entering the final quarter of 2015…

The company brands itself as a leader in changing the way the world learns English…Lingo reported very encouraging Q2 results August 27 (net earnings of nearly $1 million or 4 cents per share) and the stock price soared from the low 30’s to 60 cents in just 2 days…it immediately backed off and found support in the low 30’s as John’s chart had suggested it would…

In commenting on the Q2 results, President and CEO Michael Kraft stated, “This performance is attributable to an increase in revenue from digital learning which increased approximately 776% year over year.  In the quarter, digital revenue as a percentage of total revenue was greater than print-based revenue for the first time in our operating history. This is a direct result of our enhanced sales and marketing effort which led to securing new sales contracts in Colombia, Mexico, Peru and other Latin American markets. The EdTech market for English language learning continues to present us with favourable sales growth opportunities in Latin America and globally.

“During the second half of 2015, we expect our revenue growth and profitability to trend in a similar fashion as to the first half of 2015. We look forward to providing our shareholders with updates as we continue to achieve sales and earnings milestones.”

Lingo is off 2 pennies at 40 cents as of 9:15 am Pacific…weak buy pressure has replaced sell pressure which had been dominant since late 2011…

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

Gold has traded between $1,104 and $1,116 so far today…as of 9:00 am Pacific, bullion is up $5 an ounce at $1,111…Silver is 10 cents higher at $14.71…Copper is unchanged at $2.44…Crude Oil has added $1.40 a barrel to $45.55 despite data from the U.S. Energy Information Administration that showed Crude inventories rose more than expected last week…U.S. commercial Crude stockpiles increased by 2.6 million barrels, bringing the total in storage to 458 million barrels, near an 80-year high…the U.S. Dollar Index is off one-third of a point to 95.58 as it continues to fight resistance around the 96 level…

Ignore Gold’s weakness yesterday, says one researcher, because August may have marked the beginning of a turnaround for the yellow metal…according to Mike McGlone, head of research for ETF Securities, Gold is showing signs of a potential bottom as many bearish factors dissipate…

“Gold was one of the few positive performing assets in August, gaining 3.6% as prevailing deflationary asset price trends extended into the U.S. stock market,” McGlone stated.  However, “the extended period of above average U.S. stock market returns, below average volatility and U.S. dollar strength may have ended,” he added, noting that these are some of the main factors that have been pressuring the bullion.

“Year-to-date, Gold ended August as the best performing precious metal (PM) with a decline of 4.2% on the back of a 6.2% YTD increase in the U.S. Dollar Index and 7.6% decline in Crude Oil. August may mark the initial recovery month following a potential July capitulation bottom in Gold,” he concluded.

Modi Meets Resistance

Indian Prime Minister Narendra Modi, despite a strong parliamentary majority, is running into roadblocks from unions, among others, in his attempt to push through hard-hitting and necessary reforms needed to improve the country’s business climate…since late August, 3 key reform bills intended to make it easier to do business in Asia’s 3rd largest economy have hit snags…earlier this month, 10 major unions – representing a wide range of sectors, from banking to coal mining – called a nationwide strike over the government’s “anti-labor” policies…Modi has been trying to give companies greater flexibility in hiring and firing employees…India currently ranks 142 out of 189 countries in the World Bank’s ease of doing business index, well behind China in the 90th spot…the economy grew by a slower-than-expected 7% in the April-June quarter, down from 7.5% in the previous 3 months…economists stress that India needs to speed up its domestic reform agenda in order to unlock its full growth potential…

Chinese Premier Promises To “Speed Up Structural Reform”

Reuters reported today that Chinese premier Li Keqiang promised to relax restrictions on foreign capital in financial markets and said the country would meet its economic targets.  “We are speeding up structural reform,” Li told delegates to the World Economic Forum’s event in Dalian, known as the Summer Davos…China faces a “painful and treacherous” transition from over-reliance on manufacturing toward a “growth model driven by consumption and investment,” Li said.

“It’ s true that the economy has come under downward pressure…but the Chinese economy will not have a hard landing,” he said in a speech on policy direction.  “Despite some moderation in speed, growth is stable.  We are prepared to undertake preemptive adjustment and fine-tuning as appropriate, and step up targeted macro regulation.”

What China Just Spent $250 Billion (U.S.) On

China keeps throwing money at its stock market problem…the Chinese government has spent 1.5 trillion yuan ($236 billion U.S.) trying to shore up its markets since a rout began 3 months ago, according to Goldman Sachs…

The “rescue team” expended about 600 billion yuan in August alone, with the total now equivalent in value to 9.2% of China’s freely-traded shares, strategists including Kinger Lau (Goldman’s chief China equity specialist) wrote in a report dated Monday…investor concern about what will happen when the government starts to pare these holdings is overdone, they wrote, citing past experiences in the U.S. and Hong Kong…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 47 points or 1.5% overnight to close at 3196…the country’s consumer price index (CPI) rose 2% in August from a year earlier, beating  expectations for a 1.8% gain and up from 1.6% in July…however, disturbingly, the producer price index (PPI) declined 5.9%, compared with an expected 5.5% drop and after a 5.4% decline in the previous month…this marks the 42nd consecutive month of declines…those deflationary pressures simply aren’t letting up…

Japan’s Nikkei average gave back 470 points or 2.5% to close at 18300 after Wednesday’s spectacular gain of nearly 8%…critical support for the Nikkei, as shown in John’s 4-year weekly chart, is 18000…heightened risk of a further 10% drop in this market IF the 18000 support does not hold…after China’s market difficulties, investors don’t need the Nikkei to take a swoon…

Europe

European markets were down modestly today…the Bank of England left its interest rates unchanged at its monetary policy meeting…no change in rates was expected…

North America

After closing with triple digit losses or gains in 13 out of the past 15 trading sessions, the Dow is slightly more subdued so far today…as of 9:00 am Pacific, it’s up 75 points at 16328…with the upcoming Fed meeting, volatility is likely to continue…

Expectations for U.S. consumer spending appear to have dimmed in July, as wholesalers cut their inventories slightly and sales fell…the Commerce Department reported this morning that wholesale stockpiles slipped 0.1% while sales dropped 0.3%…both numbers were below expectations…this follows a solid 0.7% gain in inventories and a 0.4% sales increase in June…

In Toronto, the TSX is up 57 points while the Venture is off 2 points at 548…Sparton Resources Inc. (SRI, TSX-V) is one of the Venture’s volume leaders so far today, doubling in value to 3 cents…SRI came to life this morning after the company announced that, through its majority controlled subsidiary (VanSpar Mining Inc.), “it has executed a contract to finance the commissioning one of the world’s largest vanadium redox flow batteries. This battery is located in Hebei province, China, approximately 60 kilometres north of Beijing, where it was recently installed for the PRC State Grid Company.”

TSX Energy Index – Bigger Roller Coaster Than The Venture

Is it time to consider accumulating beaten-down Oil stocks?…this 16-year monthly chart shows the volatile TSX Energy Index landing in a zone of support between 155 and 172…it closed yesterday at 169…RSI(14) is attempting to bounce off previous support (from its early 2009 low)…

There’s money in volatility which is evident in more than just penny stocks…the energy index climbed 5-fold from late 2000 to its peak of 470 in 2008 when Crude prices topped out at about $150 a barrel…the index lost 63% of its value during the Crash, more than doubled from there in just 2 years, collapsed another 42% during 2011, shot up nearly 50% between early 2013 and mid-2014, and then tumbled another 56% to this year’s low of 151…

Richmont Mines (RIC, TSX) Targets New High-Grade At Island Gold Mine

Richmont Mines Inc. (RIC, TSX) announced this morning that it’s initiating a 23,000-meter deep directional drill program at its Island Gold mine in northern Ontario to further expand its resources at depth below its current 1 million ounce global Gold resource…this program, expected to take about 6 months to complete, will follow up on a very encouraging single deep hole from surface last year that intersected 19.87 g/t Au over 3.93 m at a depth of 1,200 m, approximately 280 m down plunge from the existing Island Gold resource…

Three drills will be set up on surface to drill 3 pilot holes from which approximately 10 legs will be done to test different drill targets…the planned array of 30 holes will test an area along the favorable shear zone covering approximately 500 m laterally and 640 m vertically, between depths of 860 m to 1,500 m…

RIC is one of our favorite producers, on track for another very solid year financially…RIC is up a dime at $3.35 as of 9:00 am Pacific…

Now this is high-grade – grey quartz veining with visible Gold in previously reported drill hole 425-487-118 (9,240 g/t Au or nearly 300 oz/ton in a 30 cm sample) at the Island Gold Mine deep discovery (from RIC April 1 Island Gold Mine technical report).

Targeting High-Grade Nickel Near Voisey’s Bay

The appetite for Equitas Resources (EQT, TSX-V) demonstrates how some “heavy hitters” are stepping up to the plate for a potential home run with this exciting grassroots exploration play…Equitas is getting set to commence an initial 4,000-m drill program (approximately 12–14 holes) at its Garland Nickel Project 20 miles southeast of the Voisey’s Bay mine…yesterday, the company announced it has arranged a $2 million non-flow-through private placement (12.5 cents) on top of the previous financing (mostly flow-through with some hard dollar, up to $1.8 million but probably over-subscribed) that was announced August 18…so EQT will be armed with plenty of cash as it tackles Garland, and that also helps to “de-risk” the play…EQT is racing like a thoroughbred in this market – a nice intersection of massive sulphides would give this horse international attention and perhaps provide the spark to rejuvenate the junior resource sector…

EQT is off a penny-and-a-half at 16.5 cents as of 9:00 am Pacific…a confirmed breakout occurred above Fib. resistance at 15 cents, so that’s where the new support should be…

Pure Energy Minerals (PE, TSX-V) Update

Pure Energy (PE, TSX-V) has met resistance near a Fib. level in the mid-70’s as expected…note how RSI(14) on this 2.5-year weekly chart is at 83%, based on yesterday’s close, so the risk of a modest pullback to unwind temporarily overbought conditions increased as the Fib. level was attained…on the daily chart, the 10 and 20-day moving averages (SMA’s) have provided consistent support since the big climb began in late July…

PE has retreated a nickel to 72 cents as of 9:00 am Pacific…

NexGen Energy Ltd. (NXE, TSX-V) Update

NexGen Energy (NXE, TSX-V) has had a good week after reporting more stellar high-grade results the other day from the Arrow Zone at its Rook 1 Project in the Athabasca basin…the Arrow Zone, which is entirely basement hosted, currently covers an area of 645 m by 215 m with a vertical extent of mineralization commencing from 100 to 920 m, and remains open in all directions and at depth…geochemical results continue to show highly anomalous Gold values and very low deleterious metals content throughout the zone…5 rigs continue to turn as part of NXE‘s 2015 summer drill program recently expanded to 30,000 m…the company has cash on hand of approximately $23 million…

Technically, very strong support for NexGen exists at 60 cents (previous resistance) while the key Fib. level on the upside to watch is 83 cents…NXE’s rising EMA(20), currently 66 cents, is shown in blue on this 2-year weekly chart…it has provided support since early this year…

NXE is off a penny at 69 cents through the first 2-and-a-half hours of trading…

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

Gold has traded between $1,108 and $1,125 so far today…as of 8:15 am Pacific, bullion is down $11 an ounce at $1,110…Silver is off 9 cents at $14.71…Copper, after a big advance yesterday thanks to production cuts by Glencore and expectations of fresh stimulus from China, is flat at $2.44…Crude Oil is off 55 cents to $45.39 while the U.S. Dollar Index has climbed one-third of a point to 96.23…

The physical Gold market has been mixed…demand is apparent in top consumer China where premiums edged up on the Shanghai Gold Exchange to about $5 an ounce today from last week’s $4…prices in India, however, are at a discount to the global benchmark for the first time since July, thanks in part to a weaker than normal monsoon season…

Average global Gold mining costs are falling, according to Metals Focus…cash costs in Q2 averaged $664, a drop of 2% from the prior quarter and 8% lower year-on-year, with the figure well below the peak of $782 in the 2nd quarter of 2013…as a result, the average basic producer margin, which is the Gold price minus the cash cost, was $530 an ounce. “One of the main driving forces behind this trend has been the weakening of Gold-producing countries’ currencies relative to the U.S. dollar,” Metals Focus says, adding that the decline in Oil prices also helped…meanwhile, the decline in all-in sustaining costs has slowed and was flat compared to the 1st quarter, the consultancy says. “More significantly, the additional all-in sustaining component has remained relatively static over the past 12 months at around $250/oz; this additional component includes items such as stay-in business capital, near mine exploration and corporate head office costs.”

World Bank Chief Economist Warns Fed Not To Raise Rates

The Federal Reserve risks triggering “panic and turmoil” in emerging markets if it opts to raise rates at its upcoming meeting and should instead hold off until the global economy is on a surer footing, the World Bank’s chief economist has warned…rising uncertainty over growth in China and its impact on the global economy means a Fed decision to initiate a rate hike next week, for the first time since 2006, would have negative consequences, Kaushik Basu told the Financial Times…

Japan’s Nikkei Enjoys Biggest Single Day Gain Since 2008

Japan’s Nikkei soared overnight, climbing 1343 points or nearly 8% to close at 18771…the buying frenzy started after Prime Minister Shinzo Abe told a meeting of investors that he would seek to lower the corporate tax rate by at least 3.3 percentage points (raising corporate taxes, like the NDP has done in Alberta and would most certainly do on a federal level if they are elected, is a jobs and economic growth-killing strategy, though socialists somehow get an adrenaline high whenever they they’re able to “go after” corporations and take that money to “invest” in ill-conceived, silly social experiments that typically fail and burden taxpayers)…

Meanwhile, China’s finance ministry said today that the country would roll out a “more forceful” fiscal policy to stimulate economic growth, which it said faces downward pressure…the Ministry of Finance said in a statement that it would allocate more funds to support some infrastructure projects and implement tax cuts for small businesses…it also said it would accelerate the approval process for duty-free stores in a bid to boost construction…the ministry also said it would issue debt quotas for local governments after the nation’s top legislator this year capped outstanding local-government debt at 16 trillion yuan ($2.5 billion)…

In the United States, Republican presidential contender and former Florida Governor Jeb Bush says that, with the right fiscal policies, the U.S. economy can grow at a faster clip than the current average of 2%…he said a “complete overhaul” of the U.S. tax code is necessary to fuel that growth…that means a simpler tax system and lower taxes across the board, for individuals and businesses…

It’s refreshing today to hear some politicians talking some economic sense…

VIX 10-Year Daily Chart

The Volitility Index (VIX) is beginning to settle down, closing yesterday just a shade below the key 25 level…it soared to more than a 6-year high intra-day during the “flash crash” August 24 that may have marked a key turning point in the markets…

Today’s Equity Markets

Asia

China’s Shanghai Composite advanced strongly overnight, though gains weren’t nearly as robust as those seen in Japan…the Shanghai added 73 points or 2.3% to close at 3234…

Europe

European markets are solidly in the green in late trading…investors are more upbeat following trade surplus data from the euro zone’s largest economy, Germany, yesterday, which suggested strong demand for German goods…both exports and imports in Germany hit a record high in July…

North America

Remarkably, the Dow has made 12 triple-digit moves on a closing basis over the last 14 sessions…it was up more than 150 points in early trading today but has since pulled back to a gain of 45 points as of 8:15 am Pacific…in Toronto, the TSX is up 58 points while the Venture is off 2 points at 555 as it continues to grapple with resistance at its EMA(20) and the 560 level…breakout by the end of the week?…could happen…

Critical Elements (CRE, TSX-V) has backed off slightly this morning after hitting a nearly 52-week high of 30 cents yesterday following some significant news…the company announced it has signed a strategic collaboration agreement with a unnamed leading chemical company, which includes take-or-pay off-take for all products produced from CRE’s Rose Lithium-Tantalum Project…the feasibility study will be completed in collaboration with the strategic technical and commercial partner…should the feasibility study support the technical feasibility and economic viability of the project, the strategic partner will also have the option of participating in the project by providing equity in the project financing for an interest of up to 25%…CRE is off half a penny at 26 cents as of 8:15 am Pacific…rising 50 and 100-day moving averages (SMA’s), currently in the low 20’s, should provide strong support on any pullbacks…

Venture Long-Term Monthly Chart

A stunning long-term chart from John this morning provides increasing evidence that the Venture formed an important low intra-day August 24 at 509…whether this ultimately proves to be the “capitulation” bottom in the multi-year bear market remains to be seen…however, this chart clearly suggests that the Index could now be in the midst of what develops into a very strong rally, the likes of which haven’t been seen since the end of 2013/early 2014…

Key takeaways:

1.  Index touched the bottom of a long-term downtrend line August 24 and quickly reversed

2.  RSI(14) has bounced off the long-term support line

3.  Both DI’s are at historical extremes

4.  The large heads and shoulders pattern that formed between 2010 and early 2012 was a huge warning signal

Better times are ahead, though selectivity will remain the key…

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

Garibaldi Resources (GGI, TSX-V) is well-positioned for a powerful advance on any strong news out of the Sheslay district or Mexico based on the technical posture of John’s 2.5-year weekly chart…note the confirmed breakout above the price and RSI(14) downtrend lines…sell pressure has turned into weak buy pressure, and the bearish trend clearly peaked at the end of July/early August according to the ADX indicator…

Crews remain on the ground at Grizzly Central where, as we detailed in Monday’s BMR Pro and Gold subscriber-only report, we see a strong probability of another important Sheslay district discovery…

There’s a reason the Association for Mineral Exploration British Columbia refers to the Sheslay district as “the #1 greenfield project in B.C.” 

More evidence for that claim is likely on the way given the very robust nature of this emerging world class district…

GGI is unchanged at 7 cents as of 8:15 am Pacific…

Biorem Inc. (BRM, TSX-V) Update

Biorem Inc. (BRM, TSX-V) is up 40% since we introduced it to our readers a few months ago around 30 cents…there’s nothing like old-fashioned earnings momentum (a rarity on the Venture) to drive a stock price, but that’s what’s happening with Biorem…it shot up from 32.5 cents August 27 to a multi-year high of 65 cents just 3 trading sessions later on the release of Q2 financial results…yes, a double in only 3 trading sessions…not unexpectedly, it has given back some of those gains to unwind temporarily overbought conditions, but support is strong in the vicinity of 50 cents and we can’t help but believe the potential for BRM is exceedingly bright given how its business is expanding and in a profitable fashion…

Biorem reported net earnings for Q2 of $718,000 or 5 cents per share (undiluted)…this brings net earnings for the 1st half of the fiscal year (January 1 to June 30) to $1.25 million or 9 cents per share (vs. a net loss of $1.36 million for the 1st 6 months of 2014)…

Biorem’s revenues for Q2 were $4.7 million, a 91% increase over the $2.2 million in revenue recorded during the same period last year and consistent with the $4.7 million recorded in Q1…year-to-date revenue has totaled $9.4 million, a $5 million or 112% jump in revenue over the 1st half of 2014…this increase came from each of the geographic markets in which Biorem operates (the U.S. represents its largest single market)…the value of the company’s order backlog as of June 30 was $14.4 million…management estimates that more than 50% of the order backlog will be converted into revenue by year-end (MD&A)…

In addition, on August 31, BRM reported that it has won several new orders totaling $5.7 million for air emission abatement projects in North America, including a large order from a municipality in the southern U.S. where the company’s equipment will be replacing a competitor’s system that failed to meet the customer’s requirements…

With only 13 million shares currently outstanding, BRM is an environmental biotechnology company that designs, manufactures and distributes a comprehensive line of high-efficiency air emissions control systems used to eliminate odors, volatile organic compounds and hazardous air pollutants…

Technically, BRM is on a major new uptrend as confirmed by important breakouts on this 10-year monthly chart…

BRM is up a penny at 53 cents as of 8:15 am Pacific…

Dajin Resources Corp. (DJI, TSX-V)

The Lithium space is hot, as demonstrated by the success of Pure Energy Minerals (PE, TSX-V) which has tripled in value since we introduced it to our readers in July…

For the more speculatively inclined, Dajin Resources (DJI, TSX-V) is worthy of our readers’ due diligence given its proximity to Pure Energy’s Clayton Valley Project in Nevada, and other Lithium properties it’s advancing…

Technically, this is a powerful-looking chart which has caught our attention…as always, perform your own due diligence but we see very good speculative potential with DJI trading at 10.5 cents as of 8:15 am Pacific…

Cardiff Resources (CRS, TSX-V)

A junior Oil play on the rebound could be Cardiff Resources (CRS, TSX-V) which tumbled from a high of 25 cents in June to a recent low of 8 cents near Fib. support and the still-rising 300-day moving average (SMA)…CRS is up a penny at 10 cents as of 8:15 am Pacific…

Interestingly, accumulation (CMF) in CRS continued unabated through the sell-off to 8 cents…

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

Gold has traded between $1,118 and $1,127 so far today…as of 8:30 am Pacific, bullion is up $3 an ounce at $1,127…Silver has added 27 cents to $14.85…Copper has surged 9 cents to $2.43…Crude Oil is up slightly at $46.25 while the U.S. Dollar Index has fallen one-quarter of a point to 95.96…

Gold consumers in India, the world’s biggest users after China, are expected to increase purchases for festivals during this final half of the year, given that the metal has become cheaper, according to the World Gold Council…imports in August are estimated between 95 and 100 tonnes, compared to 67 tonnes the year prior…

Copper has strengthened today after Glencore, the world’s largest supplier of the metal and its 3rd largest producer of mined Copper, said it would cut output as part of a financial restructuring…Glencore said it will suspend Copper output for 18 months at 2 African mines which produced 127,000 metric tons or about 17% of the company’s output in the 1st half of the year…Freeport-McMoRan (FCX, NYSE) became the 1st major miner to announce production cuts late last month in response to depressed Copper prices which have slipped nearly 20% since their 2015 high of $2.95 per pound in May…

There are fresh expectations that China’s central bank will inject more stimulus after another round of weak trade data…Chinese exports fell in August for the 2nd consecutive month as the economy continued its struggle to regain momentum…China’s exports fell 5.5% in August from a year earlier in dollar terms, after a drop of 8.3% in July, according to data from the General Administration of Customs…they said in a statement that China’s exports will continue to face “relatively big pressure” in Q4…

Meanwhile, China reported yesterday that its foreign exchange reserves fell by a record $93.9 billion in August from July, the largest-ever decline in dollar terms, as the central bank intervened in an effort to prop up the yuan after the recent devaluation…

At $3.56 trillion as of the end of August, the currency reserves held by the PBOC still account for nearly one-third of all holdings by central banks world-wide…but the reserves have declined since a peak of nearly $4 trillion in June 2014 as more money is leaving the country…

The reversal raises some concerns in the U.S. government bond market because about 40% of China’s foreign-exchange reserves are held as Treasurys, according to estimates by analysts at Bank of America Merrill Lynch…as of June, China was the world’s largest investor in Treasurys, holding $1.27 trillion, according to the latest data from the Treasury Department…

Today’s Equity Markets

Asia

China’s Shanghai rallied strongly near the end of the today’s session (the “rescue team” must have stepped in) to close up 90 points or 3% at 3190…resistance at 3400 and strong support at 2650 as shown in John’s chart yesterday – that appears to be the range for now…

In a bid to bring some stability to China’s volatile stock markets and improve confidence in the government’s economic management, the communist government’s finance minister, Lou Jiwei, said in a statement over the weekend that economic growth would remain around 7% for the next 4 to 5 years and the stock market correction was nearly finished…we’ll see…numbers out of China have always been more than suspect…keep in mind that the country’s main data provider, the National Bureau of Statistics, is under control of the Communist Party and ruling State Council, which prize stability above all…if that means “massaging” certain numbers simply to protect against the potential of citizen “unrest”, so be it…

Europe

European markets were up strongly today…

North America

The Dow is 265 points higher as of 8:30 am Pacific…China’s late session rally gave Wall Street some encouragement…meanwhile, the National Federation of Independent Business said today that its Small Business Optimism Index rose modestly in August, up half a point to 95.9…the gain suggests the economy continued to grow at a steady clip halfway through the 3rd quarter…

Growth is set to slow across a number of the world’s largest economies, including the U.S., China and the U.K., according to leading indicators released today by the Organization for Economic Cooperation and Development (OECD)…we expect the Fed to “chicken out” on a rate hike at its upcoming meeting…

In Toronto, the TSX is up 153 points as of 8:30 am Pacific while the Venture has finally inched above its 20-day moving average (SMA) which has been resistance for more than 4 months…the Index is 4 points at 557…

Venture Comparative Since August 24

Since the August 24 “flash crash” in the broader equity markets, the Venture has out-performed the Dow, the Nasdaq and the TSX, an encouraging sign as the Venture’s breakdown in early July was a leading indicator at that time of potential trouble ahead on the broader markets (indeed that developed in late July/early August)…the Venture has been buoyed in part by a recovery in Crude Oil which has jumped 20% over the last 10 trading sessions…

NexGen Energy Ltd. (NXE, TSX-V) Update

NexGen Energy (NXE, TSX-V) reported more stellar results this morning from the Arrow Zone discovery at its Rook 1 Project…AR-15-49c2 returned 50 m at 12% U3O8 (435.5 to 485.5 m) including 18 m at 20.55% U3O8 (456.0 to 474.0 m) and 4.5 m at 40.6 % U3O8 (465 to 469.5 m) in the A2 shear…this highlights intensive mineralization 41 m up-plunge and northeast from previously reported hole AR-15–44b, one of the finest Uranium mineralized intersections ever drilled in the Athabasca basin, which returned 56.5 m @ 11.5% U3O8 between 499.5 m and 556 m…

The Arrow zone, which is entirely basement hosted, currently covers an area of 645 m by 215 m with a vertical extent of mineralization commencing from 100 to 920 m, and remains open in all directions and at depth…geochemical results continue to show highly anomalous Gold values and very low deleterious metals content throughout the Arrow zone…5 rigs continue to turn on the Arrow Zone as part of the 2015 summer drill program recently expanded to 30,000 m…the company has cash on hand of approximately $23 million…

NXE is up 3 cents at 66 cents as of 8:30 am Pacific…

Pure Energy Minerals (PE, TSX-V) Update

Pure Energy Minerals (PE, TSX-V) has more than tripled since we introduced this exciting Lithium play to our readers in July…this morning, PE has hit a new multi-year high of 80 cents as it now grapples with Fib. resistance in the mid-70′s…

Below is John’s updated chart…RSI(14) conditions are now solidly in overbought territory on this 2.5-year weekly chart, above 80%…while such conditions can continue for an extended period, the risk of a minor consolidation (as occurred at previous Fib. resistance) has increased given current RSI(14) levels plus the current Fib. resistance which PE is up against…

The 10 and 20-day SMA’s on the daily chart have been providing consistent support on pullbacks in PE, underscoring how “bargain hunters” have stepped in aggressively on any weakness given the fundamental strengths of this play…on John’s 2.5-year weekly chart, the MA(10) – the 50-day SMA – has been key technical support since late July…

PE is up 7 cents at 76 cents as of 8:30 am Pacific…

Equitas Resources (EQT, TSX-V) Update

The fact that Equitas Resources (EQT, TSX-V) has held up so well during a financing (expected to close very soon) is a testament to the high level of interest in this “swing for the fences” exploration play near the rich Voisey’s Bay nickel mine in Labrador…the EQT technical team, led by Everett Makela (Vale’s former principal geologist who has an intimate understanding of Voisey’s Bay and the region), has done a superb job outlining prospective drill targets at the Garland Nickel Property…the camp is fully set up with drilling expected to commence shortly…

Technically, EQT clearly has momentum in its favor, despite this morning’s minor pullback, with a recent breakout above what John describes as the “perfect pennant”…RSI(14) on this 2-month daily chart has plenty of room to move higher, while sell pressure (CMF) from the financing has started to ease off…ADX indicator confirms a strongly bullish trend…

EQT is off a penny at 13.5 cents as of 8:30 am Pacific…

Eurocontrol Technics Group (EUO, TSX-V)

This non-resource company jumped out at John simply given its increasing technical strength…Eurocontrol Technics (EU, TSX-V) specializes in the acquisition, development and commercialization of innovative energy security, authentication, verification and certification technologies, and appears to be breaking out above chart resistance and an ascending triangle at 17.5 cents (this requires confirmation)…RSI(14) is also moving up strongly from a bullish “W”…

EUO is up 1.5 cents at 19 cents as of 8:30 am Pacific on total volume (all exchanges) of more than 3.7 million shares…as always, perform your own due diligence…

Silver Short-Term Chart

Silver has been quite volatile recently, swinging between strong Fib. resistance just below $16 and solid support around $14…the band of Fib. resistance between $15.30 and $16.60 has proven to be very stubborn since early June, certainly due to the reality of a slowing global economy with Silver having a lot of industrial uses…

The divergence between Silver’s RSI(14) and price on this 9-month daily chart is encouraging, however…patience is the key here…at some point the bears will be pushed back…

Silver Long-Term Chart

An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that could develop…

Have we seen the  bottom of “Wave 4”?…that’s quite possible, but still too early to tell…encouragingly, RSI(14) has so far managed to hold support which goes back to 2001…

Sell pressure continues to remain very strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which started modestly in early 2013, could continue for a while yet…this should be viewed in a larger context as a bullish contrarian indicator given historical patterns…it doesn’t necessarily mean, however, that Silver has found a bottom just yet…

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