Gold has strengthened again today after finding strong support in the low $1,500’s…as of 6:10 am Pacific, the yellow metal is up $13 an ounce at $1,587 after touching a high of $1,595.50 overnight…Silver is 27 cents higher at $28.32…Copper is up 3 pennies at $3.52…Crude Oil is flat at $92.52 while the U.S. Dollar Index, which has advanced for 14 consecutive trading days, is off slightly at 81.38…there’s no question the Dollar Index is heavily overbought and due for an imminent technical correction which should be supportive of Gold and the equity markets…
Barrick Gold (ABX, TSX)
We don’t often focus on the big producers but below is a chart from John on Barrick which provides some encouragement that the sharp downtrend in the TSX Gold Index since late February (33%) could be over…in the chart below you’ll see what needs to happen first – Barrick (and others) must get through their downtrend lines…a bullish “W” on Barrick’s RSI(14) gives good evidence that a true reversal could be underway…
Silver Statistics
Total silver supply should rise to over 1 billion ounces this year for the first time in history, as mine output continues to grow in response to strong margins for producers, according to a New York-based commodities consulting group…the CPM Group said investment demand for Silver will remain historically high, but down slightly from last year’s level….although investment demand for silver has grown over the past couple of years, the metal remains a very small portion of total global financial assets, at 0.011%…this is much higher than the 0.006% held in total global financial assets in 2010, but under 1995’s level of 0.015%….fabrication demand for Silver is seen rising over last year, driven by use in electronic devices…Mexico remains the top producer of silver, with an 18.8% rise in output, to 152.8 million ounces in 2011…
Quote Of The Day- Jim Rogers
“I own real assets (Gold, Silver, agricultural commodities) because if the world economy gets better I’ll make money because of shortages and if things get worse they’ll print more money,” which will drive up the value of hard assets, Rogers told CNBC yesterday…
G-8 Meets At Camp David But All Eyes Are On The ECB
Leaders of the Group of Eight nations will be gathering at Camp David this weekend but analysts say the G8 is unlikely to come up with any major steps with regard to the euro zone problems, and the focus will remain on the ECB and its President, Mario Draghi…a “big policy” response is likely necessary from the ECB in order to tackle the current situation with Greece and the growing problems in Spain…it’ll be interesting to see what may develop over the next week or so…unlike the Federal Reserve, which has cut rates to zero, the ECB has kept interest rates at 1%… the ECB hasn’t bought government bonds in large amounts as the Fed did with its Quantitative Easing (QE) programs, though it has provided the banking system with two rounds of liquidity via the Long-Term Refinancing Operation (LTRO)…
Volatility Index
John has an interesting chart this morning on the VIX (Volatility Index) which has been rising steadily recently in tandem with increasing investor fears…based on the indicators shown below in this 6-month daily chart, the VIX is in “overbought” territory and appears to have limited upside potential over the immediate future which lends support to the prospect of an imminent rally in the equity markets…we’ll keep closely monitoring the VIX as it is a very useful indicator…an inverted head and shoulders pattern on the chart is somewhat ominous, but we’ll have to see how this plays out over the next few weeks…
Today’s Markets
Asian markets were down sharply overnight with Japan losing 3% and China off 34 points to 2345…European markets are now showing a little bit of green after starting the day in negative territory…stock index futures in New York as of 6:10 am Pacific are pointing toward a potentially good day on Wall Street with all eyes on the Facebook IPO…the Dow is overdue for a big move to the upside after posting losses in 11 out of the last 12 sessions…
The Venture Exchange, which closed up 10 points yesterday at 1228, seems have to have support in the low 1200’s…Gold’s move yesterday was very helpful…
Rainbow Resources (RBW, TSX-V)
As we were expecting, Rainbow Resources (RBW, TSX-V) has not ignored the activity in the Slocan Valley graphite region (Valhalla Metamorphic Complex) and has carved out a very nice land package for itself in close proximity to Eagle Graphite’s processing plant and Anglo-Swiss Resources‘ (ASW, TSX-V) Blu Starr Property…as market awareness of this very prospective flake graphite area grows, RBW is well-positioned to benefit…in addition, RBW is drawing closer to the start of a drill program at Gold Viking and has commenced prospecting on some of its Big Strike properties as well as the newly-acquired graphite claims…Rainbow has a lot on the go and has held up extremely well in a challenging market environment…with a lot of boots on the ground right now in the Kootenays, we’re now anticipating a wave of prospecting discoveries to begin very soon…we’ll have more on Rainbow in a special report early next week…
Additional Charts – Atac Resources (ATC, TSX-V) and Newstrike Capital (NES, TSX-V)
Like with Barrick and many other situations, Venture bellwether’s Atac Resources (ATC, TSX-V) and Newstrike Capital (NES, TSX-V) need to battle through their downtrend lines as shown in the charts below…ATC made a nice move yesterday, climbing 44 cents to close at $2.41…
Newstrike Capital (NES, TSX-V)
Note: John, Jon and Terry do not hold positions in ABX, ATC or NES.
I don’t think u understand the vix. A couple of months ago u were stating because the vix was so low that that was a bullish sign for the markets. Now the vix is apparently overbought so yet again it is a bullish indicator ( one which i would actually agree with ).
Comment by Clint — May 18, 2012 @ 5:27 am
Iceberg on the ask at 19c on RBW right now
Comment by db — May 18, 2012 @ 6:25 am
RBW=promotional company that one would have to be careful with. I know BMR is doing what they can on their end but RBW is going to gold to silver to graphite now? Maybe they are going after graphite just to catch the graphite pump that is going on in the market now. Remember Moly anybody?
Comment by Joey — May 18, 2012 @ 6:54 am
Joey- no offense but if you did a little dd on RBW and the Kootenays in general, youd see this is alot more than just a “promo company”. The geological setting in southern BC is one of the best in Canada…
Comment by db — May 18, 2012 @ 7:07 am
Joey, you would be correct on the graphite situation if RBW were chasing after something in Quebec or Ontario….in this case, it’s in their own backyard – it came to them – and in fact, the Slocan Valley has every possibility of emerging as one of the world’s top flake graphite districts given what Eagle Graphite is apparently sitting on, and the geological make-up of the area…as an RBW shareholder, I would personally be very unhappy if the company missed out on the emergence of a flake graphite camp in this district….this is a company that has let everyone know they intend on being an exploration leader in the West Kootenay region…..so they can’t overlook this….the Big Strike Project (gold and silver) is still their flagship and their focus, they have made that clear…..plus of course they’ve got a nice asset in Nevada…..even with the Big Strike Project, it’s entirely possible they could hit flake graphite – you want them to ignore that?…….as db said, this area is incredibly geologically rich…..anything is possible, which helps make the RBW opportunity so great……they are parked in one of the world’s richest mineral districts that also happens to be very under-explored….they have boots on the ground right now and a major drill program starting soon……this is the real thing…I’ve seen the geology up close for myself and that’s why I’m invested in this……..
Comment by Jon - BMR — May 18, 2012 @ 7:29 am
Venture still down 165 pts from 10 days ago and just flatlining. Maybe it will pick up later in the day. Still no volume on most juniors. We need a spark and FB doesn ‘t seem to be doing it.
Comment by D — May 18, 2012 @ 8:57 am
BMR
Do you think it is wise to be cherry picking stocks (especially specs) when the markets seem to be still floundering. I’m not questioning your good intent just your timing.
Comment by D — May 18, 2012 @ 9:01 am
On a selective basis, yes…..money is made at times like these, when there is so much anxiety, fear and pessimism and people are predicting things will get even worse…..just the opposite of course of what you see near a top……there is some good fruit hanging on the trees in this market but obviously u have to be selective and go with companies that have strength in important areas….and these will also be the ones that move first when the overall market turns……
Comment by Jon - BMR — May 18, 2012 @ 9:09 am
Everyone have a great weekend.
Comment by John - BMR — May 18, 2012 @ 9:21 am
Can you comment on v.prb chart? Seems like indicators are bullish. Can you confirm this? Thanks.
Comment by Tony T — May 18, 2012 @ 9:25 am
John can chime in on this from the technical side…..PRB has a great project – lots of value there, and I think it’s another excellent example of good fruit that’s available to pick in this market at a heavy discount…..
Comment by Jon - BMR — May 18, 2012 @ 9:28 am
BMR
Are you suggesting contrarian trading in general or just selectively.
Comment by D — May 18, 2012 @ 9:34 am
Tony T.
From a TA view PRB has gapped up 2 days in a row after a double bottom pattern. RSI is pointing up at 46% showing increasing momentum, Vol. is increasing and so is buying pressure. Expect some resis. around 1.20. Looking good.
Comment by John - BMR — May 18, 2012 @ 9:49 am
Thanks for confirming John. I took a small position yesterday in hopes of a repeat of the last little run prb had (40% pop over 4 days). Hoping the same occurs this time.
Thanks again, much appreciated :^D
Comment by Tony T — May 18, 2012 @ 9:52 am
BMR
I agree with your analysis of PRB. Chart looking pretty good except I don’t agree with buying pressure (CMF) as it looks to be decreasing to me. All other indicators look good IMO.
Comment by D — May 18, 2012 @ 10:10 am
Hi D
Buying pressure has been increasing since April 23. I see a bigger picture than a small down dip in one day. Be careful of daily variations that are not confirmed they can give you the wrong message. Don’t take any notice of today’s value because of the long weekend. JMHO.
Comment by John - BMR — May 18, 2012 @ 10:42 am
BMR
Could I get your thougts on one of your past picks CUI as it has been crushed to .03 and now a 20-1 rollback has taken place. Do you still have any interest in this play or just walk away. Appreciate your thoughts.
Comment by D — May 18, 2012 @ 10:46 am
D
Do you have it correct i wonder, i thought the rollback is 1 for 2.5
Comment by Bert — May 18, 2012 @ 11:12 am
Bert
My apologies , you are correct. Trying to type too fast and forgot decimal 5. Typing not my thing..Thanks for the correction.
Comment by D — May 18, 2012 @ 11:15 am
D
You don’t have to apologize my buddy, everyone can’t type like me, that is,
one thousand (1,000) words per minute. R !
Comment by Bert — May 18, 2012 @ 11:22 am
canaccord has been buying up prb like there is no tomorrow. 1 million net since March 1st 2012.
Comment by Tony T — May 18, 2012 @ 11:56 am
To me the latest RBW nr was not liked by me and looking at the beating today some agree,if you have the goods why go screwing around some where else,god help it ever goes up on any news,not the nr i wanted atleast give us the nevada news first.Why the big drop today impatient investors.
Comment by Gerry — May 18, 2012 @ 12:21 pm
Great volume today in rbw, but -13% wrong way…
Comment by Kalkan - Sweden — May 18, 2012 @ 12:24 pm
Kalkan – I’ve been waiting for the opportunity and picked up a few @ .16. I’ll await news from Jewel Ridge before I buy anymore just in case the gold is invisible like VGD’s 🙂 but I don’t think that will be the case. Adding to their West Kootenay land package was good news for me and now they may offer a graphite play so the variety is intriguing and they can evolve their exploration according to the market. Have a good weekend! 🙂
Comment by Andrew — May 18, 2012 @ 12:43 pm
RBW is just talk and staking…..
Do you know how long it will be between staking and some actual results?? I mean, come on…
There is no reason buying these micro juniors now when there is so many small growing producers selling for nickel and dime.
Comment by Don — May 18, 2012 @ 1:21 pm
Not too concerned with RBWs day. Besides TD, ANON was the only one selling. Like Andrew, I took the opportunity to buy more…
Comment by db — May 18, 2012 @ 1:39 pm
SFF large lot changed hands at 12 cents…. Anyways, no change in price…..
Comment by Theodore — May 18, 2012 @ 2:28 pm
DB – Not too concerned with RBWs day. Besides TD, ANON was the only one selling.
Bert – It concerns me to see anonymous selling, why would anyone want to hide
their sales. Don is right, no one knows what’s in the ground. I done
well by selling RBW about a month ago, all because of the hype surrounding
this play, now i await a repeat & thank you for doing your part. I am
being negative again & may not be liked, but being liked, at the expense
of being untruthful, is not my nature. R !
Comment by Bert — May 18, 2012 @ 2:43 pm
RBW – if you look at the historical Net House for each month this year Anon has always been the predominant seller and RBC and TD the main buyers. On Friday RBC bought almost twice as much as was sold through them. I wouldn’t be concerned unless the volume was higher and a hint of a news leak from Jewel Ridge. I feel RBW’s West Kootenay package is a no brainer, its just their ties with Roodenburg and Pirie that has me uneasy and probably a lot of other investors too. Rainbow are not just talking they already have assays pending from Nevada and have started exploration at Referendum and now are exploring their graphite property what else can they do? 🙂
Comment by Andrew — May 19, 2012 @ 6:18 am
Andrew
It’s wasn’t my point, ”what else can they do”, it’s about what results they come out with, after
doing what they have to do. A lot of hype surrounding this play & i feel without results, it’s
clouding our minds. That was a problem in the past, stocks hyped up & now they can’t find their
way back up. I am guilty of bringing forward CEV & SGC, but i had something to base it on, CEV.,
look at it’s results & it’s location & it will go back up. SGC is about to become a miner &
take a look at it’s results & it will go back up. Anyway, i will try to refrain from taking
exception to RBW remarks in the future. Enough is enough. R !
Comment by Bert — May 19, 2012 @ 7:23 am
Bert – I know it wasn’t, it was just a concluding note on my part and dialogue re Don’s comment that RBW was just talk and staking. Its not a great environment to be introducing news anyway. Maybe Camp David will have some encouragement to offer markets next week. Enjoy the long weekend. 🙂
Comment by Andrew — May 19, 2012 @ 7:33 am