BullMarketRun.com

Commodities remain under pressure due to a number of factors including a perception of slower economic global growth…copper’s drop to a 5-month low, just under $4 a pound, coincides with the weakness we’re been seeing in the CDNX…copper dropped as low as $3.85 this morning but has recovered to $3.93 (up 2 cents for the day) as of 9:20 am Pacific…Gold tumbled as low as $1,477 but has also rebounded…the yellow metal is currently off $8 an ounce at $1,493…Silver, which got smacked down again yesterday after rallying as high as nearly $40 an ounce, is off its lows of the day but still down sharply ($1.22 an ounce) to $33.85…crude oil is now 47 cents higher at $98.68 after falling as low as $95.25…the volatility in these markets has been rather stunning…the CDNX is a superb leading indicator and it was truly sending a strong message back in March that a correction in commodities was just around the corner…the question now is just how deep that correction will be or if in fact it has already largely run its course…the CDNX will often be a step or two ahead of the metals so when we see the Venture Exchange begin to outperform Gold, copper, etc., that’s likely the start of a new and sustained uptrend…astute and experienced traders can take advantage of the current volatility but for most of us, just riding out the storm and keeping some cash available to snap up an incredible bargain or two along the way is the wisest strategy…the long-term CDNX bull market remains intact, so staying focused on the “big picture” is critical…the U.S. Dollar Index has backed off after jumping higher again this morning (above 76.60)…it’s now down slightly on the day at 75.25…China has boosted reserve requirements at the country’s banks by half a percentage point, the eighth increase since last October…Chinese authorities are walking a tightrope…on the one hand, they are determined to keep inflation under control but on the other hand they face significant social and political pressures to ensure that strong growth continues…China’ is obviously critical to the commodities picture…the TSX Gold Index found support at its rising 500-day moving average (SMA) of 360 this morning…whether that’s the bottom after a nearly 20% drop from a high of 444 early last December remains to be seen…the CDNX has hit its lowest level (2033) in over five months…the Index is now trying to recover but is still off 27 points at 2043…a declining 100-day SMA is a negative technical development for the CDNX and suggests this market may not have hit bottom yet…Gold Bullion Development (GBB, TSX-V) reported results this morning from 25 more holes at the Granada Gold Property…we’ll go into more detail on our “Morning Musings” tomorrow after a more comprehensive review but at first glance these assays continue to support the LONG Bars Zone low-grade but near-surface, high-tonnage model…hole #173 in the northeast part of the Eastern Extension is significant as this particular area continues to show excellent potential…#173 returned 80 metres grading 1.36 g/t Au (238 metres of 0.52) within a total interval of 363 metres grading 0.35 g/t Au…hole #108 was released in mid-November so we’re not sure why that was included in this morning’s results…GBB is currently off a penny at 37 cents…Focus Metals (FMS, TSX-V), which we mentioned recently when it was trading around 80 cents, is a company to continue to keep an eye on especially if any additional overall market weakness pushes it lower and closer to its 200-day SMA where there is exceptional support…FMS announced this morning it has completed a $20 million bought deal financing which will go a long way toward advancing its promising Lac Knife Graphite Project in Quebec…the stock has been under some technical pressure recently but it’s in better shape in that regard than most other plays at the moment, and the company is now sitting on piles of cash…waiting for a reversal in the 20 or the 50-day SMA might be the wisest strategy in terms of picking an entry point…the 200-day rising SMA is currently 60 cents…FMS is up a penny at 90 cents at the moment…in the speculative sphere, companies that are aggressive on the exploration front and have strong cash positions are going to be favored by the market in the current environment…GBB and FMS are just two such examples…Visible Gold Mines (VGD, TSX-V) is another…VGD is armed with $8 million in cash and is exploring feverishly in northwest Quebec in the Rouyn-Noranda region…the company’s Joutel Property has all the ingredients we look for in a project that can drive shareholder value in a major way…it’s a significant former producer of Gold and Silver and if there’s anyone who can make new discoveries around that area with a fresh approach, it’s VGD’s senior geologist Robert Sansfacon who’s very upbeat about the prospects for Joutel…VGD closed at 27 cents yesterday, exactly at its 500-day rising moving average, and the stock is currently heavily oversold based on RSI and Stochastics levels…it’s up a penny this morning at 28 cents…