BullMarketRun.com

Gold has traded between $1,525 and $1,544 so far today…as of 8:15 am Pacific, the yellow metal is off $11 an ounce at $1,526…Silver, which has experienced its worst 3-day setback since 2008, dropped slightly below $40 an ounce this morning…it’s currently off $1.64 at $40.02…the recent near-vertical run to $50 in Silver was primarily investment-driven, so the risk of a significant near-term correction had certainly increased…three margin hikes by the CME to curb speculative buying in the last week have helped to cool the metal’s run…Silver is up 150% since last August and from the start of this year to the end of April, Silver futures rallied 57% and were the best performer among the 24 raw materials tracked by the S&P GSCI Index… the U.S. Dollar Index, already technically oversold, continues to struggle…it traded as high as 73.30 overnight but took a turn south again…it’s currently off nearly one-third of a point to 72.78…the U.S. economy added a disappointing 179,000 private sector jobs last month, according to a report ADP and Macroeconomic Advisors…the U.S. government will issue its key nonfarm payrolls report Friday…consistent monthly job growth of 200,000+ will be required in order to drive the U.S. unemployment rate aggressively lower…it’ll be interesting to see what impact required major austerity measures by federal, state and local governments in the U.S. may have on the unemployment and overall economic situation…hopefully these cutbacks will be combined with pro-business and pro-growth tax strategies but that may be expecting too much out of the Obama Administration and Congress…it has been a rough start to the month of May for the CDNX but we don’t believe the sky is about to fall…the Index fell 45 points Monday and another 49 points yesterday…the March low of 2053 provides very strong support with the rising 200-day moving average (SMA) just underneath that…John’s chart yesterday also outlined support at 2150 and 2100…it’s important to emphasize that the CDNX remains in a long-term bull market and each significant pullback during this bull market since the beginning of 2009 has presented an excellent buying opportunity in the higher quality speculative stocks…the CDNX is ahead a relatively modest 30% over this time last year, so it’s hard to argue this market has gotten way ahead of itself especially considering the strength in commodities…focus on companies that are well-managed with strong cash positions and attractive properties with high discovery potential…patience is also critical and keep your eye on the “big picture” which is a long-term commodities bull market with the strong likelihood of much higher Gold and Silver prices…at the moment the CDNX is off another 39 points to 2120…in the current market environment we like to look for stocks that not only have superior long-term potential but are also heavily oversold based on RSI and Stochastics indicators…Visible Gold Mines (VGD, TSX-V) is one of them and it’s also one of our favorites for the balance of the year…VGD fell below its rising 300-day moving average (SMA) yesterday, triggering additional selling that has given VGD its lowest RSI(14) reading on a multi-year chart since 2007…a very strong support area is in the 27-28 cent range, right around the rising 500-day SMA and a late 2009 high that became resistance which was broken last September…with $8 million in the bank and two drill programs in progress, Visible Gold Mines is poised to snap back in a hurry on a market turnaround given its already oversold state…VGD is currently off a penny-and-a-half at 29 cents…GoldQuest Mining (GQC, TSX-V) is also in deeply oversold territory and is underpinned by exceptional support at 20 cents as we’ve been stating recently…GQC is down a penny at 21.5 cents…Gold Canyon Resources (GCU, TSX-V) has held up very well in this market and is currently up 4 cents at $3.39…GCU is expected to close a bought deal financing of approximately $10 million by sometime next week…$2.75, right around the 100-day SMA, appears to be the worst-case scenario for GCU so the downside from current levels is limited…GCU is developing a deposit at its Springpole Project in Ontario that Fraser McKenzie’s mining analyst states is likely to contain at least 5.5 million ounces…Levon Resources (LVN, TSX-V) is expected to complete a $40 million bought deal financing at $1.95 next week…the company’s flagship Cordero Project in Mexico is a potential world class deposit (Silver, Gold, zinc and lead) and the stock is underpinned by strong technical support just below $2…it’s currently off 6 pennies at $2.04…keep an eye on Richmont Mines (RIC, TSX) which hasn’t become oversold yet but could in the very near future…the stock has fallen 25% from its all-time high of $9.75 over the last four trading sessions to $7.35 this morning…as readers know, we’ve very bullish on Richmont’s Wasamac deposit…the company had earnings of 31 cents per share last year and carries no debt…Adventure Gold (AGE, TSX-V) announced this morning Agnico-Eagle Mines Ltd. (AEM, TSX) has started a 4,000-metre surface diamond drilling program on AGE’s promising Dubuisson property located in the western part of the Val d’Or mining camp…the property is contiguous to the Goldex mine property (reserves of 1.6 million ounces at 1.8 g/t of Gold and also straddles a 5-kilometre portion of the prolific Cadillac-Larder Lake Break…AGE is unchanged at 60 cents with its supporting 100-day SMA sitting at 56 cents…