Gold is attempting to hold above its December low and stage a reversal…reports of a pick-up in physical demand from Asia are encouraging…as of 6:00 am Pacific, the yellow metal is down $4 an ounce at $1,540 after falling as low as $1,526 overnight …Silver is 22 cents lower at $27.50…Copper is off a nickel at $3.50…Crude Oil is $1.14 lower at $92.84 while the surging U.S. Dollar Index is unchanged at 81.26 after briefly climbing above 81.50…
Amazingly, the Dollar Index is up for 12 consecutive trading sessions – the first time that has occurred, according to the Wall Street Journal, in 27 years…this shows the anxiety traders/investors have over the situation in Europe, but this has also created a very overbought technical situation that will need to unwind very soon (that process could now be underway) which should bring some relief to the battered stock markets and Gold…another factor to consider is that the Fed has about as much interest in a runaway U.S. Dollar as it does in a runaway Gold price…that brings up another point on a broader issue…the likelihood of a significant policy response from the Fed and/or the ECB is growing by the day given the escalation in the euro zone debt crisis and growing concerns over an economic slowdown in China… below is an updated Dollar Index chart from John…
The euro continues to trade within a support band between 126 and 129, and indicators are approaching bearish limits…the euro hit a low of 126.80 this morning and is currently trading slightly higher at 127.44…
Today’s Markets
European markets have turned positive for the day while stock index futures in New York are pointing to a higher open on Wall Street…the TSX has declined in 9 out of the last 10 sessions (1,000 points or 8%0 with triple digit losses in 6 of those sessions)…the Venture has fallen in 8 out of the last 10 sessions (191 points or 13%)…
Gold Stocks – “Buy When Nobody Wants To Buy”
Gold stocks took another beating yesterday with the TSX Gold Index plunging 10 more points to 267…May is only half over and the Gold Index is already down 14% for the month…it’s also now off more than 40% from last summer’s all-time high…there is support around the 260 area on the Index, so a bottom or a rebound is likely near at hand…
In an interesting interview with The Gold Report, a link to which was provided in our comments section yesterday, Bob Moriarty gave some words of wisdom to investors…
“The mere fact that shares are hard to sell and there’s very low volume is a buy signal all by itself…if you want to make a fortune in the junior mining segment, buy when nobody wants to buy and sell when everybody wants to buy…if that were all you did, you’d make 100% a year…juniors have a 200-400% range every year…buy when things hit a new low, sell when they hit a new high and ignore all the gurus” – Bob Moriarty.
Canaco (CAN, TSX-V) Gets KO’d
The Venture Exchange hit a new 52-week low yesterday, helped in no small part by a disappointing if not bewildering resource estimate from Canaco Resources (CAN, TSX-V) for its Handeni Project in Tanzania…how Canaco could drill 400 holes and over 100,000 metres and still come out with only about a million indicated and inferred ounces is a mystery to many (using a cut-off grade of 0.5 gram per tonne Gold, Magambazi is estimated to contain an indicated mineral resource of 15.2 million tonnes grading 1.48 g/t Au and containing 721,300 ounces, as well as an inferred mineral resource estimate of 6.7 million tonnes grading 1.36 g/t Au and containing 292,400 ounces)…investors were expecting much better from Canaco and headed straight for the exists, sending the stock price down 67% to 29.5 cents for a market cap below the company’s cash value…it’s unfortunate that CAN has become CANNOT in this case…they ought to pick up their toys in Tanzania and invest in something else in North America but under different management…
Canaco’s woes yesterday helped send the Venture Exchange through the 1300 support area like a knife through butter, and the Index closed down 64 points at 1240 on the second-highest volume day since the end of February…there is great value in many plays right now, and all that’s needed is a shift in sentiment which will come…as investors, the only thing to really be fearful of at the moment is our own emotions…
For those that think the gold bull market is over read this, makes a good case for the opposite, I work in a office with 50 plus employees and only one of them ever mentions gold or silver and no one mentions gold or silver stocks, but back during the dot com boom that is all you ever heard was how much they were making on this stock or that stock. The normal public still has no idea about gold or silver…
Comment by Greg — May 16, 2012 @ 5:19 am
Can we got some technicals on the Venture Jon? is 1200 likely to hold as i think you had mentioned before it was the next support band after 1300? Thanks.
Comment by STEVEN — May 16, 2012 @ 5:20 am
The Venture built a nice base around the 1200 level down to 1155 in 2009, and we will be showing that in a chart from John…….so that is where there should be excellent support…..RSI(2) is currently at levels seen at previous reversals….
Comment by Jon - BMR — May 16, 2012 @ 5:25 am
Another venture chart indicating support (just a random number for the most part). Well, eventually you will nail it right and then you can finally say you called the bottom.
Comment by Joey — May 16, 2012 @ 5:42 am
Well Joey, markets look like they may be turning around. Gold is going up, $US is going down, maybe there is sunshine ahead….no need to be bitter.
Comment by John - BMR — May 16, 2012 @ 6:11 am
ALWAYS SUNSHINE AFTER A HURRICANE…. sorry … surveying the damage is hard… and theres lots of it… when CN spun out tigra.. did all the good stuff go there??
Comment by Jeremy — May 16, 2012 @ 6:23 am
no bitterness here. just glad i haven’t been investing purely on technicals.
Comment by Joey — May 16, 2012 @ 6:34 am
Looking at the 5 year chart, I don’t see support at 1200, I see weak support at 1050. But thats my eyes only. I am sure John will have his reasonings for 1200. But I for one hope 1200 is the bottom. I am as anxiuos as anyone to see this market turn around.
Comment by dave — May 16, 2012 @ 8:15 am
Dave
If you go back to Aug/09 there is some support around 1180. Maybe this is what Jon is looking at, I’m not sure.
Comment by D — May 16, 2012 @ 8:26 am
Hey BMR Rbw nr shouid be coming,has held up pretty well any thoughts thnx.
Comment by Gerry — May 16, 2012 @ 8:39 am
One don’t need eyes at all to tell where the bottom is, the bottom will be in when FEAR
dissipates. Do you really believe the sellers are looking at the charts, trying to find a
bottom. Might as well relax, no one & i mean no one, including BMR, whom i consider good
chart readers, are able to tell.. If only i were a fly on the wall, during their most
recent conversations, they are as bewildered as we are. R !
Comment by Bert — May 16, 2012 @ 8:43 am
BC min files show a lot of staking has been going on in the Valhalla area, and not just by Eagle Graphite…..this is only a guess at this point but my hunch is that RBW is getting in on the action which would be a smart move….so there is positioning going on, and probably ground movement to go with it…..what’s really amazing is that the Eagle has landed right on RBW’s doorstep at Gold Viking……..the min files confirm that…..this is going to get very interesting I’m sure…
Comment by Jon - BMR — May 16, 2012 @ 8:49 am
Jon – This is only a guess at this point but my hunch is that RBW is getting in on the action
which would be a smart move.
Bert – No way are you guessing. Would our buddy Jon take a chance of letting down his
followers, if it turns out to be not so. This is not a Jeopardy site my buddies. R !
Comment by Bert — May 16, 2012 @ 8:58 am
You will see an NR on RBW before the end of the week…
Comment by db — May 16, 2012 @ 9:04 am
To be honest, i would rather not see a RBW NR until the Vulture exchange returns to
some sort of normal trading. A NR now would be wasted, but i guess they have to do,
what they have to do. R !
Comment by Bert — May 16, 2012 @ 9:21 am
Jon … if we assume that you have talked to RBW, and they have been staking… is that insider info??? if not then i can be deemed to be a secret so that others know not what they do??
just asking:) from RBW’s point of view:)
Comment by Jeremy — May 16, 2012 @ 9:29 am
Jeremy, no……this is publicly available info if you do your homework on the bc min files site which is what we did……..given the amount of staking activity, there are different players involved….rainbow is not visible at the moment but that means nothing……..quite often a company will mask its identify by staking thru a third party…..Johnston won’t confirm anything so RBW is keeping any cards it has close to its chest for now….
Comment by Jon - BMR — May 16, 2012 @ 9:33 am
Bert
You say the bottom will be in when the fear dissipates. I say fear will dissipate when the bottom is found which will only be changes by fundamentals. Fear will not dissipate on its own. All the negative news has been the driver behind the fear and only if that changes will we see a tunaround. Someting positive has to be a catalyst for improvement. There must be a reason for optimism , and yes no chart will tell you that.
Comment by D — May 16, 2012 @ 9:45 am
From my caclulations the Jewel Ridge update is due out this week. I think this is something RBW can afford to throw at the market without “wasting a NR”. Seeing as flake graphite is now listed on their homepage, we will surely be seeing an NR regarding that soon enough…
Comment by db — May 16, 2012 @ 9:47 am
D
Fear will dissipate when there is a reason for optimism, your words i think ? R !
Bert
Comment by Bert — May 16, 2012 @ 9:53 am
Bert
Thats how I see it. I don’t see getting too excited about cherry picking a individual stock until sentiment does a 360. Altough GBB seems to be stirring. Unwinding oversold condition on RSI and Slow Stochastic .
Comment by D — May 16, 2012 @ 10:09 am
Jon
Please forgive me, but consider this as constructive criticism. Being a follower of this
site, i am finding it difficult to get excited over what i consider HYPE, something that
may be, in other words, a hunch, an assumption, it could be, it looks like. That’s what
got us into trouble in the past, we thought the market/stocks could be, may be, should be
going up… Your words, are being scrutinized & picked apart by this person for sure, it’s
the only way to try to make a dollar. You may be better with words than me, but you have to
give us concrete information, which will prompt us to say, for goodness sake, we can depend
on Jon for sure. R !
Comment by Bert — May 16, 2012 @ 10:19 am
Bert- I feel Jon is giving as much as he can ( regarding RBW) without getting himself in trouble. He cant spout off insider info on the net without serious implications and possible burning some bridges at the same time…
Comment by db — May 16, 2012 @ 10:27 am
DB
But the point is, we are still left with uncertainty, isn’t that what’s bringing the markets
down now ? It’s all about uncertainty. If we can’t back up what we say, say nothing ! I
don’t expect some to agree with me, because in uncertain times, anything is better than
nothing, but not for me my friend, no guess work, no uncertainty, i want it straight, or
nothing. R !
Comment by Bert — May 16, 2012 @ 10:35 am
Bert, it’s no “hunch” with regard to what Eagle Graphite is doing – that is in the public domain even though they’re a private company….that’s good detective work on our part……like you, I’m not privy to what’s going on behind closed doors, but obviously RBW is fully aware of what’s happening in the area and they are certainly not ignoring all of this since they’ve tipped their hand a little on their own web site with regard to the graphite situation….I get back to my question of yesterday and this is not “hype” but a fair question…..what is a private graphite company doing staking ground immediately next to Gold Viking??? Do they have money to just throw around? Given the existing deposit plus all the flake graphite occurrences in the area, I think it’s safe to say this particular region of Canada is going to get a lot more attention for its flake graphite potential…..
Comment by Jon - BMR — May 16, 2012 @ 11:07 am
Jon – This is only a guess at this point but my hunch is that RBW is getting in on the action which would be a smart move.
Jon – It’s no “hunch” with regard to what Eagle Graphite is doing
Bert – With all due respect, this is not about Eagle Graphite, it’s about RBW, a company
i have invested in (see your comments above)… Your guess & your hunch about RBW could
lead some astray. It’s very difficult as it is, to invest with confidence, on absolute facts,
alone hunches. I have had my say & i will not be commenting on this further, thanks for
your reply… R !
Comment by Bert — May 16, 2012 @ 11:19 am
Jon – If you have the URL for the bc min files site handy would you mind sharing so that I can research the staking last weekend? Thanks. 🙂
Comment by Andrew — May 16, 2012 @ 12:02 pm
No problem, Bert, we’ll just respectfully agree to disagree on that one….how Eagle Graphite moves ahead, and the size of their deposit, is very relevant to RBW and the entire area IMHO……for example, if they were to go public in the near future through an IPO, that would cast a whole new set of eyes on the Slocan Valley in general and all companies involved…..either an IPO, or the involvement of a major private equity firm, could help change the exploration dynamics as well as infrastructure in this area as well…..Eagle, in otherwords, is the lead player in what could develop as a very significant area play, depending on the extent of what currently exists as a deposit or if other deposits are found….all this means a whole lot more of course to RBW if they are directly involved in the graphite action and that would require holding some ground…….so that’s where things sit…..I for one am hoping RBW throws its hat into the ring……..after all, it’s almost their back yard…….
Comment by Jon - BMR — May 16, 2012 @ 12:13 pm
Thx Jon …. as Bert suggests, sometimes we might misinterpret things you say, and wonder if it is opinion, supposition, result of DD, or…??? thus my question… having said that if the info you are presenting is based on ‘something’ the cred of that particular statement may be increased because of that..:)
I didnt even know that BC mines had public info available regarding staking:) thus we need guidance 🙂 thx mate
Comment by Jeremy — May 16, 2012 @ 12:23 pm
This report may be of interest to some who are researching graphite plays: http://resourceclips.com/wp-content/remote/resource-express/toronto/Graphite_Toronto_V11_PRINT_REV_LR.pdf
Comment by Andrew — May 16, 2012 @ 1:19 pm
Holly crap….the legs have fallen off the Venture. This is worse than I had anticipated.
If the S&P or Dow decides to fall any further its only going to bring down the Venture even further. We could bottom out around 1000 or perhaps 800. This is looking brutal.
On the positive side, large cap gold stocks were in Green today which is diverging from the market. Gold may have bottomed and we could have a bottom in the Venture within the next few days.
If larget cap gold stocks continue to outperform this week and into next then we’ve hit bottom. I can’t see any further downside in the Venture unless havoc happens in the Euro zone…..perhaps Greek exiting the Euro might be that catalyst. Lots of risk right now.
Comment by Andrew M — May 16, 2012 @ 1:26 pm
Hi Andrew, the B.C. government (like Quebec and some other provinces) has some great sites for those interested in the geology of the province, and the one for mineral titles is mtonline.gov.bc.ca. You need a password to access the best parts, which is easy to get, but learning how to navigate your way around takes time.
Comment by Jon - BMR — May 16, 2012 @ 1:40 pm
Andrew – I’m pretty sure Greece will have to leave the Euro Zone and the EEC, but I would think that many investors have already factored that in. They will likely be followed by others in due course.
Comment by Andrew — May 16, 2012 @ 1:42 pm
Thanks Jon, I think I found that one and sent them an email, I’ll follow up again . Cheers 🙂
Comment by Andrew — May 16, 2012 @ 1:43 pm
Venture daily RSI(14) is at its lowest level since the early October low; SS has also touched the lows of December and October, so there is hope for an imminent rebound. Dow has fallen 10 out of 11 days, U.S. Dollar Index is up 13 days in a row………we must be close to a bottom…how long can this go on?
Comment by Jon - BMR — May 16, 2012 @ 1:44 pm
AGE is at its lowest RSI ever, so I guess it is holding up reasonably well.
Comment by Andrew — May 16, 2012 @ 1:46 pm
Tomorrow is Facebook day & because of the publicity surrounding it, i will go out
on a limb & predict that tomorrow, the markets will shine. Good night ! R !
Comment by Bert — May 16, 2012 @ 4:06 pm
Crapbook/Facebook I think will come down to earth in a hurry
Comment by Joey — May 16, 2012 @ 4:45 pm
Bmr, good chart on nes.v last week
Comment by Clint — May 16, 2012 @ 5:30 pm
GUYS AND GALS… check some things out… GDX,GDXj, HUI… plus some select stocks…. doji’s…. hmmmmmmm the struggle has begun… some buying… some whipsawing… bottoming process for now… and of course the market is what the market does…. but I would like to think that we have some signs of the sun rising…. but in a mirror it would be setting yes??
Comment by Jeremy — May 16, 2012 @ 5:54 pm