BullMarketRun.com

Another shortened trading week coming up as Canadian markets remain closed tomorrow (“Boxing Day” holiday), though U.S. markets re-open after enjoying their best week in over a month.  All markets will be closed on Friday, of course, for New Year’s Day.

Morning Musings resumes Tuesday with the Venture well-positioned for a breakout above Fib. resistance at 517 as you can see in this 6-month daily chart.  The Venture seasonal rally gained considerable traction last Wednesday and Thursday when the Index pushed above a downtrend line as well as its EMA(8) and EMA(20) moving averages.

Interestingly, despite the rout in commodities during this 4th quarter, the Venture has an excellent chance to finish Q4 in slightly positive territory with its best Q4 performance since 2010.  That bodes well for a further recovery in Q1 and contrasts sharply with the situation last year when the Index plunged by more than 20% in Q4.

Venture 6-Month Daily Chart

The long dollar/short Gold trade has exhausted itself for the time being with the U.S. Dollar Index headed for its biggest monthly decline since April.  This fits historical patterns of Dollar weakness in the 3-6 months following the start of a Fed rate hike cycle.  The best thing for the Venture, Gold and commodities in general was getting a Fed rate hike out of the way after 18 months of speculation fueled a record run in the greenback.

Gold has a very good chance of breaking out above $1,080 resistance this coming week, and that should keep Gold stocks buoyant.  Bloomberg notes that the put-to-call ratio on SPDR Gold Shares has reached its lowest level since 2008, perhaps indicating that investors who were betting on further declines in Gold prices are losing enthusiasm for this trade.  The COT structure is also highly favorable for a Gold rebound with smart-money commercial traders having dramatically scaled back their short positions on the dip below $1,100 and amid all the “doom and gloom” regarding the metal.

Just over 2000 years ago Luke recorded the birth of Jesus Christ:

“In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world (this was the first census that took place while Quirinius was governor of Syria).  And everyone went to their own town to register.   So Joseph also went up from the town of Nazareth in Galilee to Judea, to Bethlehem the town of David, because he belonged to the house and line of David. 

“He went there to register with Mary, who was pledged to be married to him and was expecting a child.  While they were there, the time came for the baby to be born, and she gave birth to her firstborn, a son. She wrapped him in cloths and placed him in a manger, because there was no guest room available for them.   And there were shepherds living out in the fields nearby, keeping watch over their flocks at night. 

“An angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were terrified.  But the angel said to them, ‘Do not be afraid. I bring you good news that will cause great joy for all the people.  Today in the town of David a Savior has been born to you; he is the Messiah, the Lord.  This will be a sign to you: You will find a baby wrapped in cloths and lying in a manger.'” (Luke 2: 1-12, New International Version)

A Savior was born and He is Christ the Lord.  He came for all of us.

Christmas is a time when we celebrate the birth of Jesus but it is also a day when we celebrate all that He accomplished by willingly going to the cross (for us) in His death.  He came to save the world and He wants all of His children to be in relationship with Him.

During this Christmas season it is our hope and prayer at BMR that all of our subscribers and readers will have time to pause and reflect on the real reason for the season.

From our homes to your homes, the team at BMR wishes you a very Merry Christmas.

May the Christmas season give you rest, give you peace, give you joy, give you comfort, and give you precious time with family and friends.  May the Lord bless you and may His face shine upon you this Christmas season.

Warmest regards,

Jon, John, and the team at BMR

BullMarketRun.com

8:00 am Pacific

The Venture “December Reversal” has clearly started after the intra-day all-time low of 494 Tuesday, December 15, the day prior to the Fed decision to raise interest rates for the first time in nearly a decade.

Below is a 6-month daily chart from John with several important highlights:

1.   RSI(14), which became very oversold this month, has broken above a downtrend line going back to October and is showing strong up momentum at 50% after yesterday’s close;

2.   The Venture this morning has pushed above a price downtrend line also going back to October;

3.   The Index has broken above its EMA(8) and EMA(20) moving averages which are also reversing to the upside…

4.   Sell pressure (CMF) is declining significantly and should change into buy pressure soon;

5.   A bullish +DI cross appears imminent.

The 515 support should reassert itself on a monthly basis.  Note the Fib. resistance levels – the first “wall” to come down should be 517.

The Venture is up 2 points at 513 as of 8:00 am Pacific.  The TSX has gained 28 points while the Dow is down 36 points.  North American equity markets close early today at 10:00 am Pacific.

Gold continues to look solid, perhaps preparing for a breakout above $1,080 resistance.  The yellow metal is up $5 an ounce as of 8:00 am Pacific.

Comments Section

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We wish all of our subscribers and readers a very Merry Christmas.  We will be posting a separate Christmas message later today.

BMR Morning Musings resumes Tuesday, December 29, following the Christmas break.

Gold has traded between $1,068 and $1,076 so far today…as of 9:30 am Pacific, bullion is down $3 an ounce at $1,069…Silver is up slightly at $14.29…Copper has added 2 pennies to $2.13…Crude Oil has rallied $1.55 a barrel to $37.69 while the U.S. Dollar Index has gained one-third of a point to 98.55…

Dennis Gartman is right about this point concerning Gold:  “What really had my interest was the CFTC reports that came out last week indicating that the commercials, as they’re called, who are normally enormously net short, are almost net long,” the editor of the Gartman Letter said. “The fact that commercials are effectively net long and the public is abundantly out – that is a reason to be abundantly in.”

According to Gartman, in the “enormously rare” instances that commercial interests shift their participation to the long side, it’s an indication that “real” bull markets have begun.  “Commercials are always ahead of the public,” said Gartman. “The last time we saw this happen in the other direction was when the commercials got egregiously net short back in November of 2011. They’re the ones that call the top, they’re the ones that call the bottom, so that alone has me interested.”

More Production Cuts Expected In Nickel

With such a high proportion of the cost curve losing cash, it appears to be only a matter of time until production cuts become more prominent in Nickel, according to Goldman Sachs in a report dated December 21…cuts outside China have been minimal and disappointing to date, and the bank expects weak supply and demand fundamentals to persist…

Crude Oil Update

Oil prices will take decades to recover and will still not reach the peak seen in recent years, according to the latest World Oil Outlook (WOO) from OPEC (consider the source, however, at a time when some members of the cartel are deliberately pressuring prices to the downside)…in the group’s latest outlook on supply, demand and prices to 2020 and 2040, OPEC predicted that a barrel of Oil would cost (in real terms) around $70 by 2020 and $95 by 2040, a far cry from a high point of $114 a barrel last seen in June 2014 before prices began to plunge on oversupply…

We have an updated WTI chart in today’s Morning Musings…

The Growing Global Terrorist Threat

The Wall Street Journal reported this morning that Western security officials are struggling to respond to the threat that Islamic State can make authentic-looking Syrian and Iraqi passports, which could be used to hide operatives planning attacks in Europe or North America among refugees…ISIS likely obtained equipment and blank passport books needed to make Syrian passports when the group took control of the Syrian cities of Raqqa and Deir Ezzour, those officials said…it has also gained control of materials to make Iraqi passports when it occupied the Iraqi city of Mosul, a Belgian counterterrorism official disclosed for the first time…the near-absence of communication with the Syrian government means Western officials are lacking key information that could be used to identify the passports, according to a confidential analysis by the U.S. Department of Homeland Security…

In today’s Morning Musings…

1.  North American equity markets are buoyant following a slew of economic data on the final full trading day before Christmas…

2.  A look at key support for the TSX and how a turnaround could form in early 2016…

3.  One of the better opportunities on the Venture under a nickel…

4.  China continues to push hard to increase its currency’s global appeal…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…

Gold has traded between $1,073 and $1,082 so far today…as of 10:45 am Pacific, bullion is down $24an ounce at $1,074…Silver is 4 cents higher at $14.29…Copper is off 3 pennies at $2.11…Crude Oil has stabilized, up 46 cents at $36.27 after falling below $34 yesterday for the first time since 2009, while the U.S. Dollar Index has fallen one-third of a point to 98.15…

Gold ETFs have surged in recent days and witnessed their biggest increase since January according to MKS (Switzerland) SA…assets in the SPDR Gold Trust, which is the world’s largest Gold ETF, rose by almost 3% to 648.91 tonnes on Friday, the first increase in 2 months…

Uranium is the only metal that has increased in price in 2015, although Gold has strengthened in a number of currencies other than the U.S. dollar, BMO Capital Markets reported this morning.   “Uranium prices averaged $39 (per pound) in 2015, higher than the $33/lb average in 2014,” BMO says. “It was the only mining commodity to improve this year.”

However, in many producer-nation currencies, commodities outperformed, BMO adds…for instance, for the year to date, Gold has averaged $1,164 an ounce in U.S. dollars, down 8% from 2014…however, for miners in Australia, it’s been a banner year at $1,544 AUD an ounce, a gain of 10%…in Canada, the yellow metal’s gain is 6% to $1,481 CDN an ounce…

Crude Oil Update

Analysts have cited tomorrow’s WTI contract rollover into February as a significant factor for the positive start to today’s session, with traders and money managers preparing for the Western Hemisphere’s harsher winter months…another boost for WTI has been the decision by the U.S. government to lift its 40-year export ban for Crude Oil…exactly how much U.S. exports will impact the global market isn’t known, but it has pushed WTI to parity with Brent…

Drunk Zamboni Driver Arrested

This has nothing to do with mining or investing, but perhaps it is related to the season (too much rum with the eggnog at work?)…it’s one of the more bizarre stories we’ve seen in what has already been a crazy year…police in rural Manitoba say impaired driving charges are pending against a Zamboni operator…officers received a complaint Saturday about the man during a minor hockey game in Ste. Anne, southeast of Winnipeg…Marc Robichaud, chief of the town’s police department, says the machine was striking the rink’s boards and moving erratically around the ice…an officer spoke with the driver between periods of the game, then placed him under arrest…Robichaud says the man in his 30‘s, who was new to the ice-clearing job, has been released from custody…he is to face charges of impaired driving, refusing a breath sample and resisting arrest…Robichaud says arresting a Zamboni driver for impaired driving is a first for him, but the offence includes operating any motorized vehicle.  “Liquor and any kind of motorized vehicle don’t mix, irregardless of whether it’s on the road or wherever it may be,” he said…there was no damage to the machine or the rink…

A reminder to everyone…please don’t drink and drive!

In today’s Morning Musings…

1.  Long-term chart for Gold – how a move to $2,800 an ounce could unfold over the next few years…

2.  High-grade producer Klondex Mines (KDX, TSX) looks even more attractive after acquiring idled Rice Lake mine at fire sale price…

3.  Updates on 2 Lithium plays…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…