BullMarketRun.com

Gold , coming off its back-to-back quarterly losses for the first time since 2001, is beginning a new month and quarter on a quiet note…as of 7:30 am Pacific, bullion is down $2 an ounce at $1,596…Silver is off 33 cents at $27.97…Copper is flat at $3.40 where it’s trying to hold support…Crude Oil, which has posted four consecutive weekly gains, has retreated $1.10 to $96.13 while the U.S. Dollar Index is down one-quarter of a point at 82.77…

Today’s Markets

Asian markets were weaker overnight with Japan’s Nikkei average, which climbed a whopping 19% in Q1, falling to a three-week low as it lost 263 points or just over 2% to close at 12135…all eyes tomorrow will be focused on Bank of Japan’s highly-anticipated policy meeting…new central bank chief Haruhiko Kuroda is expected to come out with guns blazing by introducing significant new additional stimulus measures such as longer-term government bond purchases to inflate the economy…China’s Shanghai Composite fell 3 points to 2237 as it hovers around its low for the year…Chinese factory output expanded at its fastest pace in almost a year in March, but the rise was slower than most economists had predicted, suggesting that China’s economy may not rebound as quickly as many had hoped…China’s official Purchasing Managers Index, released this morning, rose to 50.9 in March from 50.1 in February…the strength and extent of China’s recovery hinges on when the central bank tightens monetary policy after loosening policy last year and increasing credit supply to induce an economic rebound…European markets were closed today for an extended Easter break…in North America, the Dow is up slightly in early trading to begin the new quarter after posting its best first quarter since 1998 thanks in part to an improved housing market, an energy boom and healthy corporate profits (the second and third quarters of 1998 featured a significant correction before the market rebounded to finish the year higher)…as of 7:30 am Pacific, the Dow is 7 points higher at 14586…the pace of expansion in the U.S. manufacturing sector unexpectedly slowed in March, according to an industry report released this morning…the Institute for Supply Management (ISM) said its index of national factory activity fell to 51.3 from 54.2 the month before…the reading was shy of expectations of 54.2 according to a Reuters poll of economists…however, U.S. construction spending rebounded in February as both public and private outlays increased, bolstering views of faster economic growth in the first quarter…auto sales and the March jobs report are also due this week….the TSX has declined 25 points after the first hour of trading while the Venture is down 2 points at 1097…

Venture Chart -The 2-Year Trend Reversal Pattern

While the broader equity markets have been performing extremely well this year, the Venture of course has been in the tank with a drop of 10% on top of sharp declines in 2011 and 2012…this highly speculative market has shown an uncanny ability to deceive and humble experienced traders and investors, especially recently with eight consecutive weekly losses and by far the worst February on record…what we thought was a bottom early last summer (1154) turned out not to be a bottom as the Index fell below 1100 in March and closed Thursday at 1099…support levels to watch are around 1090 and 1027, the 2009 early summer low…on a positive note, there is a divergence between RSI(14) and price which means that a genuine turnaround may not be far off…in addition to weakness in Gold, this market has been hurt by a challenging overall regulatory environment for companies plus a lack of major discoveries/success stories to get investors excited…historically, however, it’s typically times like this – when sentiment levels are so negative – that offer unusual opportunities…the most powerful up-legs are born out of the times of deepest despair…what also gives us hope is an interesting chart from John that shows the Venture has a pattern of important trend changes every couple of years, and a new 2-year period is just beginning…note how the RSI(14) on this long-term monthly chart went from 70 (high risk) to below 30 during the Crash (low risk), back up to 70 by late 2010/early 2011, and has fallen back down to just above 30…history tells us that while we don’t know exactly where the bottom will be, now is when investors (those thinking beyond just tomorrow or next month) should be the most eager to accumulate positions in good quality juniors in anticipation of a turnaround…

Updated Silver Charts

Long-Term Silver Chart

John’s updated long-term Silver chart (11-year monthly) shows a market approaching a moment a decision during this second quarter…Silver will either break above the down trendline which has been in place since 2011, or fall below important support…we believe the bias is to the upside based on RSI and the strong support that has held in the mid-$20’s for more than two years…

Silver Short-Term Chart

The short-term Silver chart (9-month daily) shows that over the near-term we can expect trading to continue to remain within the support band between $28 and $29.60…selling pressure has turned to weak buying pressure based on the CMF(20)…Silver needs to climb above its EMA(20), currently at $28.92, for momentum to shift in its favor…

Another Opinion On Silver

Standard Bank is cautious regarding Silver for 2013 due to weak demand/supply fundamentals that could put downward pressure on prices as the year unfolds…writing in its latest Precious Metals Definer note, the bank said last week that it believes China’s above-ground Silver inventory is currently “as high as 18 months of fabrication demand, up from 16 months at the start of 2012 and only 4 months in 2009″…this is of interest because, as with most other metals, China has been the major source of demand growth for the metal since 2009…according to Standard Bank, China was still a net importer of Silver in 2007…in 2010, however, it became a net exporter of the metal as a result of growing demand and changes in export tax rebates…”During 2010 the country imported an average of 298mt per month…In addition, China added another 288mt per month of Silver from mine supply and scrap, leaving the total monthly supply of metal at 586mt in 2010…In contrast, China’s average monthly fabrication demand in 2010 was only 330mt per month, implying a monthly surplus of 256mt per month in the local Chinese market during that year”, the bank writes…”By implication, this had to be taken up by investment demand or stockpiled by fabricators…Even though China’s imports have slowed from 298mt per month in 2010 to 166mt per month in 2012, the decline in imports was still not enough to stop the rise in metal within China”…

Wildcat Silver (WS, TSX) Updated Chart

Gold Stocks – HUI Chart Update

An 11-year monthly HUI chart shows a potential bottom was formed in March at 337.29 (the HUI is down slightly in early trading today at 354.62)…a re-test of that low this month certainly can’t be ruled out, but keep in mind that a spring rally in the producers has occurred quite often…in fact, between 2001 and 2012 the average gain in the HUI has been nearly 7%…

Note: John, Jon and Terry do not hold share positions in WS.