Gold surged to a record new high this morning following weaker-than-expected U.S. growth numbers for the second quarter…the continued impasse in Congress over the debt ceiling/debt reduction issue is also helping the yellow metal…as of 8:50 am Pacific, Gold is up $10 an ounce at $1,627 after reaching a high of $1,634…Silver has climbed 30 cents to $40.03…Copper is off 2 cents at $4.42…Crude Oil is down $1.27 at $96.17 while the U.S. Dollar Index has dropped one-third of a point to 73.83…U.S. consumer sentiment fell in July to its lowest point in more than two years (since March, 2009) as anxieties over stagnant wages and rising unemployment deepened, according to the Thomson Reuters/University of Michigan survey released this morning (if you recall, that was also a great time to be investing in the market)…meanwhile, the U.S. economy grew less than expected in the second quarter as consumer spending barely rose…growth in gross domestic product – a measure of all goods and services produced within U.S. borders – rose at a 1.3% annual rate in Q2 (below the consensus estimate of 1.8%) according to the Commerce Department…first quarter growth, meanwhile, was revised sharply down to a 0.4% pace from 1.9%…how that number could have been off so much forces one to be skeptical of any numbers coming out of the Commerce Department…in addition, 2010 fourth quarter growth was revised down to 2.3% from 3.1%, indicating that the U.S. economy had already started slowing before the high gasoline prices and supply chain disruptions from Japan hit…but it gets worse…data released today shows the 2007-2009 recession was much more severe than prior measures had found with economic output declining a cumulative 5.1% instead of 4.1%…yes, unfortunately, the Commerce Department is about as accurate as California preacher Harold Camping who probably would have had more people believing him, perhaps even Nancy Pelosi, if he had selected August 2 as his date for the “end of the world”…”What we’re trying to do is save the world from the Republican budget,” Pelosi told a Washington Post reporter the other day…”We’re trying to save life on this planet as we know it“…nothing that comes out of the mouth of Pelosi surprises us anymore…our advice to our readers at the moment is not to cave in to fear and throw stocks overboard based on emotion and given the circus that’s going on in Washington right now…the big picture for the second half of the year continues to look very positive and the Venture Exchange, despite a significant drop this week, has enjoyed a good month overall and has actually out-performed the major markets…the CDNX is a very accurate leading indicator – its performance this month gives us a lot of confidence entering the final five months of the year…in addition, Copper – also an extremely accurate leading indicator of the health of the global economy – has been performing exceedingly well…the U.S. will sort out its mess and people’s worst fears, including Nancy Pelosi’s, will not be realized…the CDNX has dropped through its 10 and 20-day moving averages but the 20-day SMA is still rising…there is exceptional support around 1930 (the July 12 reversal point) which is also just above the rising 300-day SMA…doesn’t mean this market will necessarily fall another 40 points but 1930 is an area where there is additional very strong technical support…John also sees Fibonacci support at 1962 and 1939 – so those are two other very valid support levels…the CDNX is currently off 15 points at 1969 but appears to be stabilizing and potentially could have a strong finish today…we’ll see what happens – volatility is high right now with political dynamics at play…let’s look at some individual situations…we haven’t mentioned Gold Bullion Development (GBB, TSX-V) in our Morning Musings for a while, so below is an updated chart from John which shows an interesting picture…
From a fundamental perspective, GBB’s 43-101 on the LONG Bars Zone can’t come soon enough…it should give the market much more confidence in what is coming together there and the potential for a multi-million ounce deposit…yes, it’s low grade, but the project has many strengths from its location to near-surface mineralization to anticipated high recoveries…GBB is currently off 2 pennies at 37.5 cents…elsewhere in northwest Quebec, we’re expecting a very active month of August for Visible Gold Mines (VGD, TSX-V) as it begins drilling its Joutel Project and as work continues on its Lucky Break Project on claims near Richmont’s (RIC, TSX) Wasamac deposit…VGD is up over 40% in the month of July and it’s looking much stronger technically with rising 10, 20 and 50-day moving averages for the first time this year…given the extent of drilling this company is doing, and the quality of its geological team, the Law of Averages is such that it’s likely only a matter of time before VGD makes a significant discovery which is why it remains one of our favorite exploration plays in northwest Quebec…VGD is currently up half a penny at 32.5 cents…we’re also keenly interested in Adventure Gold’s (AGE, TSX-V) Pascalis-Colombiere Gold Property near Val d’Or…Phase 2 drilling continues at this property and a resource estimate is in the works that we believe could take the market by surprise given drill results to date…Pascalis-Colombiere has major infrastructure advantages and is a potential low-cost producer given the geometry of the deposit that AGE is outlining…we’ve been doing well with some of our pics in the Yukon lately, in particular Pacific Ridge Exploration (PEX, TSX-V) and Golden Predator (GPD, TSX)…PEX is up a nickel to 66 cents and the company has announced that Bruce Youngman has joined its board of directors…from 2008 to 2010, Youngman was President and Chief Operating Officer of Canplats Resources Corp. during which time the 4-million-ounce Camino Rojo deposit in Mexico was outlined and the company was acquired by Goldcorp Inc. (G, TSX) for $300-million…GPD’s Brewery Creek Project is proceeding well after more drill results this week…GPD has pulled back 9 cents this morning to $1.27…other favorites in the Yukon that have great potential in our view, besides Atac Resources (ATC, TSX-V), include Silver Quest Resources (SQI, TSX-V), Ethos Capital (ECC, TSX-V), and Northern Tiger (NTR, TSX-V)…a “sleeper” for those who like lower-priced plays is Dawson Gold (DYU, TSX-V) which is trading at just a dime…don’t email us a month from now and complain that we don’t bring potential great opportunities to this space…long-term investors who are bullish on Gold should certainly keep an eye on Spanish Mountain Gold (SPA, TSX-V) which reported some impressive long intersections this week…SPA is developing a low-grade deposit in central British Columbia that is believed to be economical with Gold at $1,100 an ounce based on the results of a PEA (Preliminary Economic Assessment) late last year…SPA has been conducting infill drilling within the Main and North zones at Spanish Mountain with results confirming continuity of potentially economic mineralization in areas presently classified as inferred resources…assays released this week from the Main zone included 321.5 metres of 0.65 g/t Au, 284.5 metres of 0.50 g/t Au, 276.5 metres of 0.37 g/t Au, 293.5 metres of 0.30 g/t Au, 249 metres of 0.39 g/t Au, and 240.3 metres of 0.37 g/t Au…results from the North zone included 123 metres of 0.91 g/t Au, 84.5 metres of 0.52 g/t Au, and 147.5 metres of 0.32 g/t Au…the company is working on an updated resource calculation as a precursor to the commencement of a prefeasibility study for the project…SPA is currently off a penny at 60 cents for a market cap of $100 million…
“our advice to our readers at the moment is not to cave in to fear and throw stocks overboard based on emotion” This has been your general advice since this downtrend began back in January. Against my better judgement I have held on to your recommendations due to my naivete. Great buying opportunities is a constant mantra. Gentlemen I think that you have no objectivity and dangerously promote stocks to unsuspecting newbies due to your site being free and wrapping yourselves in the cloak of religion. I am not blaming you for my losses, that is my cross to bear, but this site is reckless in it’s advice. You should stick to retirement, driving a bus, and studying the word of god.
Comment by mclatch — July 29, 2011 @ 8:56 am
Some bonehead put in a market order on CQX for 100K .. took er down… thus the issues with dealing with the general investing knumbskulls who just dont get it!!
Comment by Jeremy — July 29, 2011 @ 8:56 am
I was wondering what happened, thought there was some news out when i opened my account and that CQX was down.
Comment by GREG — July 29, 2011 @ 9:18 am
We look at the big picture—-the long-term CDNX bull market is intact. Call it reckless advice if you will, that’s your opinion. We appreciate everyone’s input.
Comment by Jon - BMR — July 29, 2011 @ 9:24 am
Do not mistake me, I appreciate your input, it’s just your objectivity of the overall market is in question. For a brief period last year your calls were good, but lets be honest since the beginning of this year they haven’t been. If as you stated you wish to take this site to the subscription level you gotta start making people money consistently. The smart money left back in January and is now waiting to get back in and can possibly make another killing this year, but if you held like I did your just hoping to make it back. That is not a service I would pay for, it’s more like blind faith.
Comment by mclatch — July 29, 2011 @ 9:54 am
Mclatch, I would say our calls on the overall market have been very good (hardly over a “brief period”) and included the July call last year of a coming huge run in the CDNX which is exactly what occurred….in early March this year, we warned of trouble and a possible 25% correction in the CDNX……the market made some confusing twists and turns from March thru June but when everyone was ready to throw in the towel last month, after a 25% correction, we were urging people to remain calm and pick up the good quality stocks at bargain prices and get ready for another run…..we’re convinced we’re in the beginning stages of another major uptrend…..we’re not here to tell u when to buy and sell a stock…..we’ve presented a lot of great opportunities……there are times obviously when you need to lock in profits, take profits off the table, which perhaps you haven’t done regularly enough…..you have to take advantage of volatility…….by the way, as far as Gold is concerned, I don’t think anyone out there has made better calls on this market than John over the last year-and-a-half…..he has repeatedly been bang-on……his Gold charts have been sensational….
Comment by Jon - BMR — July 29, 2011 @ 10:23 am
mclatch, BMR always has a reason/excuse why thier picks tank, hence they switch to new picks all the time. Examples are Sidon, cqx, isd, vgd, but ATLEAST they are correct in picking VGN, news NEXT week on their 2 Viking oil wells.
Comment by john — July 29, 2011 @ 10:56 am
I would say that you have presented as many bad opportunities as good, and to the uninitiated hearing things like “our advice to our readers at the moment is not to cave in to fear and throw stocks overboard based on emotion” certainly sounds like telling someone when not to sell a stock. So when you respond with “we’re not here to tell u when to buy and sell a stock” I would counter that you have suggested in the past times not to sell when maybe there is money to be made by selling. It is this disservice to people that prevents them from locking in profits and setting up to make more with any possible pullbacks. I am only harping on about this in hopes that you can use it to better this site which after a year of faithfully following, hope that it can become more objective as I feel your faith in this “long-term CDNX bull market” has clouded the judgement of others as to when to lock in profits.
Respectively
Comment by mclatch — July 29, 2011 @ 11:13 am
We always try to stay focused on the “big picture”. So today, for example, it’s not that we’re telling people not to sell a particular stock, we’re just saying selling any stock for the simple reason that you think the market is going to crash next week or next month is probably a bad idea. There are a lot of fear mongers out there at the moment, and many retail investors have a tendency to get scared very easily. Based on how the Venture is shaping up and has acted this month, and given the fact it’s a very predictable leading indicator, the odds are that this market is indeed in a new uptrend. That’s the point. There’s one reason for buying a stock and a lot of reasons for selling it. If you didn’t lock in considerable profits during the last half of last year at certain times, then you definitely made a mistake. In fact, in September of last year, when we predicted a move to 2000 or better in the Index, we made a point of stating that investors need to take profits along the way and shouldn’t get greedy. You have to do that. Just because we’ve kept GBB or SFF or AGE or SD or whatever in our “model portfolio” for a considerable time, doesn’t suggest you shouldn’t sell one of these plays if the opportunity arises and you can lock in some profits. There is a lot of volatility in these speculative stocks – use the volatility to your advantage, perhaps maintain a core position but look at a trading position as well. We’ve pointed out more good opportunities than bad ones – it’s up to each individual investor to do their DD and learn how to be successful in this market. One thing I notice a lot, we point out a situation where a particular stock is getting hammered for no good reason at all and a major opportunity has presented itself – rather than buying into weakness, which is what you need to do, many investors don’t act quickly enough and end up chasing that stock to the upside. Seems they’d rather buy when a stock is going up as opposed to buying it when no one else wants it.
Comment by Jon - BMR — July 29, 2011 @ 12:44 pm
Mclatch.. get a life.
If you take BMR’s picks and use them for investment advice without doing your own DD there’s no one to blame but yourself.
As a subscriber of the Midas Letter I’m down 60% so far on his picks and have cut most loose on a subscription that costs me $50 a month..
You should be glad you have John and Jon here to provide CDNX charts as well as Gold charts and market commentary to benefit you as when BMR was saying things have gotten overdone at 1865 on the Venture they were bang on within 10 points.
Meanwhile James West was telling me to dump everything and anything as he retreated into a 20% cash, silver and gold position + Gold Canyon at $2.60. If I’d been listening to my paid subscription instead of BMR I’d have missed huge opportunities on Kaminak, Silver Quest and ATAC + more.
Playing stocks under $10 M market caps has the potential to lose you most, if not all your money if you’re not going to do your DD.
In my opinion BMR has been bang on with the right thesis for gold and the CDNX and lashing out at them since you can’t find the right points to buy or sell is pathetic. If you don’t like the site and hate their picks so much why are you here – there’s several sites to use for daily market commentary.
BMR has all their thesis’ correct so far this year with surging gold prices, an oversold CDNX in late June and being in the juniors – the asset class with the most torque in these markets given their oversold levels relative to the precious metals.
It’s not their fault the U.S. debt ceiling is holding down the juniors currently due to the risk trade being off, maybe if you weren’t all in you’d be jumping up and down laughing scooping up great buying opportunities today like some have.
If you have nothing nice to say then leave the site cause no one here cares for your comments, you’re clearly a new investor who doesn’t do his homework and goes all-in in the wrong stocks at the wrong time.
If gold was trading at $1200 and the CDNX had broken support at 1850 and was trading below 1750 you may have a bit of an argument here but you can’t blame Jon/John for being bang on with their macro thesis yet the stocks being neglected due to the U.S. turmoil currently.
Comment by Taylor — July 29, 2011 @ 12:47 pm
Does anyone know what the Period is used for Slow Stocastics?
Thanks.
Comment by Bruce — July 29, 2011 @ 1:02 pm
( I apologise for my English)
I am sure John and Jon are two really good guys who are trying there best to make there website a success. The owner of the web site, in his case, not sure what he is doing.. maybe in charge of the bizarre disclaimer. Last year I warned them of the difficulties in making money on the ventur. In fact I mentioned how only less then 10 % of investors make a profits with the ventur. Also, I advised them that charts do not work very well with ventur type stocks because of the extreme volatility of the prices and the emotional nature of investors who hold these stocks in time. Now in February with the rise of protest in the Arab world and rising oil prices, I knew, or in fact It was easy to predict, oh don’t forget a fragile economical recovery, the markets will get hit hard . We also had later the same problem of last summer .. Greece, Spain, Portugal, Ireland who have once again problems with there debts. Look ..the first thing that get hit hard in bad economical times is ventur stocks,of all kinds. Now for your predictions on gold…. Bravo you were right but why are you not focusing on companies who do have a lot of proven gold and even better who are producing and don’t have any long-term price contracts that were signed two, three, five years ago. Again guys at BMR, charts are good but they are one tool of many, to predict a price on a stock. On the ventur, charts should be on the last line of a list of tools to be used. Look at it like a good Italian spaghetti sauce. You need a lot of excellent ingredients, patience, experiences to obtain a mama’s world class Italian sauce. Predicting stock prices are the same ..you got to have many ingredients ( tools) to evaluate the possibilities of future stock prices. Ventur stocks…. ad on a realy good Crystal ball. The best. Ventur is not gambling but very similar.
Comment by Andre — July 29, 2011 @ 1:08 pm
This may not be the time to lay blame. A friend & i had a conversation this very day & we
both agreed, that the final responsibility must lie with the buyer to do a thorough due
diligence & not to depend solely on an internet service & a free one at that. The
aforementioned is not meant to take away from BMR’s service, but for an extended period
of time, we have seen troubling times & i feel the Canadian Venture Exchange, is the
weakest link & usually is the first to fall back. I will give my forecast, for what it’s
worth & that is, after the turmoil in the states is settled, watch out !!!! in particular
now that August is upon us. Although i am far from being perfect with my words at times and
if you are anything like me, you may regret tomorrow, what you state in a nasty manner today.
Better days ahead, mark my word. Good luck !
R !
Bert
Comment by Bert — July 29, 2011 @ 1:22 pm
Thank you Jon for taking the time to respond to my criticisms and letting people make comments that aren’t always nice. I am sure there are a few who care, it is called a debate I believe. I appreciate your calm responses. Comments over the internet can often sound like a yelling argument or nasty pissing match and that was not my intent.
Comment by mclatch — July 29, 2011 @ 1:55 pm
Bruce
The normal period time for Stochastics is 14.
Comment by John - BMR — July 29, 2011 @ 2:02 pm
John,
Is Stocastics and Slow Stocastics different indicator? I’m using FreeStockCharts. I’ve set Period at 14, K at 14, and D at 3 but cannot replicate SS over 90%.
Thanks in advance.
Comment by Bruce — July 29, 2011 @ 2:08 pm
I understand that, mclatch, we don’t take anything personally, we welcome all input. Sharing comments and ideas in a reasonable manner are also a way to make us all better traders and investors. Each one of us can learn from someone else. No one here, and certainly not me, is perfect. The overriding theme at BMR is that we’re in the bull market of a lifetime for junior resource stocks. Sometimes it’s hard for people to see that when the market drops/corrects or there’s volatility or scary things happening in the world – the daily noise from everything tends to interfere with our brain’s ability sometimes to properly view the bigger picture. I think a year or two down the road, people will be looking back at this period and kicking themselves for not loading up more on quality opportunities. I trust John’s Fib. target for the CDNX – nearly 2900. That’s about a 50% gain from here.
Comment by Jon - BMR — July 29, 2011 @ 3:43 pm
Hi Bruce
I use Stockcharts indicators and with them there are 3 types…FAST, SLOW and FULL.
FAST
FAST %K = %K basic calculation
FAST %D = 3 period SMA of FAST%K
This results in a choppy %K so the SLOW Stochastics was developed.
SLOW
SLOW %K = FAST %K smoothed with a 3 period SMA.
SLOW %D = 3 period SMA of SLOW%K
This smooths the %K and makes it more useful
The FULL Stochastics indicator is a customized version of the SLOW indicator. You do not need this.
The one you should use is the SLOW STOCHASTICS indicator.
On the FREESTOCKCHARTS site there is only one indicator shown. This is the SLOW one. On the scale there is a white arrow on the right hand side for 100% and one for 0%.
Hope this helps.
Comment by John - BMR — July 29, 2011 @ 3:45 pm
John,
Thank you for your explanation. One more question. The below is how I setup the parameters, and I was wondering how you set yours up.
Stochastics: Period = 14, %K = 3
%D: Period = 3, Offset = 0
Thanks!
Comment by Bruce — July 29, 2011 @ 5:31 pm
I usually set up the same but occasionally I will change.
Comment by John - BMR — July 29, 2011 @ 5:46 pm
Bert, I could not agree with you more. The markets will be great as we move thru August and into the Fall.
Comment by david — July 29, 2011 @ 8:48 pm