Stock markets are still shaky this morning, despite a better-than-expected U.S. jobs report, after yesterday’s huge sell-off…Gold has been erratic, climbing as high as $1,671, dropping as low as $1,648, and then running higher again…as of 8:00 am Pacific, the yellow metal is up $15 an ounce at $1,664…Silver is up 45 cents at $39.33, Copper has hit a two-month low at $4.17 (down 7 cents), Crude Oil is down 20 cents at $86.43 while the U.S. Dollar Index has dropped by more than half a point to 74.81…more than $2.5-trillion has been wiped off the value of world stocks this week on mounting concerns the global economy is heading towards another recession and Italy and Spain are being engulfed by the euro zone sovereign debt crisis…is this a prelude of things to come (just a “hint” of future turmoil as one reader commented this morning), or merely an over-reaction, a normal correction and an incredible buying opportunity?…there’s no question markets have suffered some technical damage, including the CDNX which has hit a new 52-week low after showing such positive signs since the end of June…we will explore different scenarios in our Week In Review which will be posted Sunday afternoon…with the CDNX, it’s important to point out that the 300 and 500-day moving averages continue to rise and are in no danger of going into decline anytime soon – that’s encouraging along with the fact the CDNX has outperformed the broader markets since the end of June…yesterday’s drop, however, through key support raises the prospect of a “capitulation” before a final bottom is put in…we’ll have to wait and see…much could depend on what the Fed decides to do in the coming days (it meets next week)…the U.S. jobs report this morning was not as bad as some had feared…hiring picked up slightly in July and the unemployment rate dipped to 9.1%, an optimistic sign after the worst day on Wall Street in nearly three years…employers added 117,000 jobs last month (above market expectations of a gain of 85,000), the Labor Department stated this morning…that’s better than the past two months which were also revised higher…still, the economy needs twice as many net jobs per month to rapidly reduce unemployment…the rate has topped 9% in every month except two since the recession officially ended in June, 2009…businesses added 154,000 jobs across many industries…governments cut 37,000 jobs last month, most of that largely due to the shutdown of Minnesota’s state government…Stats Canada reported this morning that the Canadian economy created just 7,100 jobs in July while the jobless rate slipped to 7.2%, the lowest since late 2008 and down from 7.4% a month earlier…gains in full-time jobs offset the losses in part-time unemployment…and on an optimistic note, the private sector created 95,000 positions…the public sector lost 72,000 jobs…the TSX is now below its rising 500-day SMA for the first time since early 2010 with very oversold technical conditions based on RSI(14) and Stochastics, so a rebound appears imminent…as of 8:00 am Pacific it’s off 156 points at 12,225…the CDNX is down another 34 points at 1819, still 83 points above its 500-day SMA…John’s 6-month daily chart shows the RSI(2) is at an extreme value which usually comes at a turnaround point…
A major discovery can turn the Venture around instantly and we have seen that happen on other occasions, particularly over the summer when exploration programs are in full swing and results start coming out…a classic example was back in 2007 when the Venture got hammered in early-to-mid August, along with the broader markets, and then swung violently to the upside thanks to Noront’s (NOT, TSX-V) McFauld’s Lake discovery…the Yukon, northern B.C., northwest Quebec and the Western U.S. are among the areas to watch closely for a potential major discovery through August and September…it’s also important not to lose sight of basic fundamentals when the market is acting on emotion and fear…earnings and fundamentals at some point will take over…a classic example of that is Richmont Mines (RIC, TSX), one of our favorite small producers, which could report stellar second quarter earnings as early as next week…Richmont climbed as high as $8.46 in early trading yesterday and hit an intra-day low of $7.02…after closing 79 cents lower yesterday, it is off another 18 cents at the moment to $7.31 despite the fact this company has a rapidly growing production profile, more than $50 million in cash, no debt, and potential earnings of $1.00 per share this year…John updates the Richmont chart below…
Given the situation at Wasamac, a growing deposit 15 kilometres west of Rouyn-Noranda, it’s important in our view to keep a close eye on Richmont neighbors Visible Gold Mines (VGD, TSX-V) and Cadillac Mining (CQX, TSX-V)…the market hasn’t caught on yet to how significant the Wasamac deposit is becoming, and Visible Gold Mines is also drilling aggressively in the immediate area with an indication, based on their latest news release, that they could be on to something with three rigs at their Lucky Break Project and drilling focusing on the Wasa Creek Property, parts of which are within 1200 metres of the Wasamac Main Zone to the south and west…a company doesn’t put three rigs on a property for no reason…there is also strong fundamental value in our view in Gold Bullion Development (GBB, TSX-V) and Adventure Gold (AGE, TSX-V) who of course are working on significant deposits south and east, respectively, of Rouyn-Noranda…in the Yukon, there are many exciting quality plays and one that has been knocked down in value in this sell-off is Kaminak Gold (KAM, TSX-V)…John updates the chart for KAM which should find support around the $4 level…it’s currently off 24 cents at $3.83, a drop off 85 cents from its all-time high of $4.71 July 27…
Elsewhere in the Yukon, we see value in such explorers as Golden Predator (GPD, TSX), Pacific Ridge Exploration (PEX, TSX-V), Northern Tiger (NTR, TSX-V), Ethos Capital (ECC, TSX-V) and of course Silver Quest Resources (SQI, TSX-V) which also holds a strategic 25% interest in the northern portion of New Gold’s (NGD, TSX) rich Blackwater deposit in central British Columbia…incredible opportunities could open up in some of those situations on any significant additional CDNX weakness…
isd.v has strong support at .275?? Ok, sure, but what will BMR’s excuse or explaination WHEN that support is crushed? As for vgd.v, cqx.v gbb.v sff.v and abi.v well looks as if ALL those stocks are at or very near their 52 week lows. Sometimes it is better to keep quiet and have others assume you’re a fool, then to open your mouth and actually PROVE it!! This mess that the markets are in is a very serious set back, no amount of sugar coating will change that. Looking at the markets with rose coloured glasses on is a sure way to LOSE a LOT of money. All investors have to be REALISTIC in what is happening right now. BMR provides a nice forum and sometimes some real imformation, but no matter how many pretty charts they put up, it still won’t change the reality of the markets. I see the TSX hitting atleast 11,750 before any meaningful turn around.Also I find it rather ironic as a practicing Christian, that when reading how BMR ” invests with a Christian perspective” that they sometimes GLOAT that they are up this much on this stock and that much on that stock ” since 1st introducing it to their readers” What about those who bought later on and are NOW DOWN?? Is that very Christian? Now, Im not saying you can’t gloat, just don’t be such hipocrates about it.
Comment by john — August 5, 2011 @ 8:04 am
Jon, I think it’s significant that when there was the sell off in Summer 2007 we were not in a recession. Global economy was good – Ireland was riding high etc. The continued sell off today may have been triggered initially by fear yesterday, but doesn’t common sense come into play when the sell off continues globally and dramatically and lead one to say “it’s time to go to cash”? Any news from the juniors now is likely going to just give opportunities to sell? I’d hate to lose out on VGD and AGE but I see a black Monday looming.
Comment by Andrew — August 5, 2011 @ 8:10 am
I couln’t resist, I purchased another 15,000 shares of VGN today to add to my stockpile, as news is just around the corner on the Viking oil wells in Provost, afterall, how many jr companies on the venture can claim to ACTUALLY earn income? Im not saying that .17 is the bottom, but VGN sure has more going for it than most of the trash stocks on the venture. According to Tony, these wells look great, the flow rates are better than expected, and we should be hearing about their performance very soon.
Comment by john — August 5, 2011 @ 9:13 am
I think people here should take a good look at NES for a way to play the gold price.
The price has yet to go red today despite the turmoil in the overall markets earlier and they have reported drill results similar to better than Ventana’s over the past 6 months and have barely been rewarded by the market.
Ventana was bought out for $1.3 billion in Colombia but Newstrike has less than a $300 million market cap in Mexico with drill results like these:
1. 113 m @ 2.51 g/t au
2. 282 m @ 1.4 g/t au
3. 214 m @ 3.00 g/t au
4. 190 m @ 3.52 g/t au
5. 116 m @ 4.71 g/t au
6. 317 m @ 5.8 g/t au
7. 52 m @ 6.9 g/t au
8. 271 m @ 1.43 g/t au
9. 259 m @ 2.57 g/t au
Plus all these results have high-grade silver as well which should help incredibly with cash costs, the deposit is also only 22 km northwest of Goldcorp’s 320,000 oz producing Los Filos project.
Comment by Taylor — August 5, 2011 @ 9:24 am
The more posters that keep coming on and posting how bad it is out there just keeps reminding me of what all of the most successful traders and investors always say, you buy when everyone is selling and sell when everyone is buying. It is very hard to do, Jeff Clark who is one of the most successful private money managers has a great article that I recieved this morning in my inbox, it is also posted on the front page of stockhouse too. Worth a read.
Comment by GREG — August 5, 2011 @ 9:42 am
i would like to direct this to john, if your outlook is so negative then why come on here keep rehashing the same old dribble. why are you not busy selling everything you have. instead you feel the need to come on here and save the world? i guess you are just a nice guy who feels the need to warn everybody about the end of the world. just another wolf is sheeps clothing?.. doesnt matter how hard i try i can not take a thing you say seriously as if you did truly believe what you are writing then you would be selling and sitting on the sidelines. not on here selling fear and saving the world.
Comment by heath — August 5, 2011 @ 9:51 am
GBB nice rebound as I bought some at 32 cents… BER as I predicted to go to about 10 cents level. I managed to take advantage of today’s market drop and had a scoop of it . However, this should be the bargain price and it won’t go further down. It will climb back up gradually to 13-14 cents level. NAR, I am holding a portfolio and looking forward to a double or triple profit. SD closed at 4 cents but only 1000 shares at 4 cents…. and I consider 3.5 cents is the current price. No matter it is a buy or sell…. there are always people to scoop it. My buy lot at 3 cents still waiting but I have confidence in this stock. I will buy at 3.5 cents on Monday…. putting 50,000 shares buy lot each time… SFF was down as I predicted to drop to this level.
Comment by Theodore — August 5, 2011 @ 5:51 pm
More bad news & below is part of reason for downgrade. May i add, it never rains’ but it pours
US AAA credit rating downgraded
S&P noted that the bill passed by Congress this week did not include new revenues – Republicans had staunchly opposed President Barack Obama’s calls for tax rises to help pay off America’s deficit.
Comment by Bert — August 5, 2011 @ 6:17 pm
Bert,
I sure hope you are not saying that this is the republicans fault…
Comment by GREG H — August 5, 2011 @ 7:51 pm
I would suggest people go and research past history on countries who have been downgraded by S&P before they panic and think this is some huge crisis, the crisis is not the downgrade by the S&P the crisis is that the United States of America is BROKE, along with the rest of the world. It is just a matter of time before all paper currencies are totally worthless, Europe is on the verge of collapse and as soon as one country defaults over there the rest will follow. Then the United States will be right behind them. I think that wishy washy James West was right a few weeks back when he said sale all of your jr miners and go into physical gold and silver, he just did not have the patience when he saw the CDNX look like it was rebounding and then told his subscribers time to go back into the juniors, most juniors are going to suffer thru this if they make it at all. Monday should be interesting.
Comment by GREG H — August 5, 2011 @ 8:02 pm
GREG H – I sure hope you are not saying that this is the republicans fault…
Bert – I didn’t say a word, i just repeated a paragraph from an article i read. It do
reinforce my friendly argument though, that they do need more revenue down there,
along with deeper cuts. Anyway, they do what they do best in the U.S., while i
continue to do what i try to do best & that is, to look after my own affairs to the
best of my ability…. My chart readings for the CDNX are that we are way oversold
& at support, so Monday through Friday should be interesting indeed.
Comment by Bert — August 6, 2011 @ 3:09 am
Check the weeklies on the CDNX we bounced of the 100 and 200 week levels.. horribly oversold, and the US dollar will drop Monday due to S&P… fear, margin, and possibly computer trading created the waterfall… glad it happened on a thur/fri… a mon tuesday would not have been pretty .. too much time to not think!:)
Comment by Jeremy — August 6, 2011 @ 6:34 am
Sometimes, we make money from this kind of oversold situations…. we have be patient, brave and use sixth sense at times….. My guess, GBB will retain current level around 37-39 cents… SD … stays at 3.5 cents until news come out… BER around 11 cents… not much room to go further down. SFF will be around 24 cents…. NAR will be 18 cents level…. waiting for breakthrough to 22-25 cents. VGN and VGD… still no holdings….
Comment by Theodore — August 6, 2011 @ 7:54 am
Bert
what we need (U.S. which is where I live), is a real leader to get this country back on track, whether that leader is a dem or rep, he or she needs to be a leader and make the tough decisions, imo Bush should have let the banks fail back in 2008, we would be on our way to recovery now, instead the worst is yet to come and the only people making money since 2008 have been the banks, like i said before, the govt does not create wealth they consume it and this govt has stifled big business from creating wealth or they have at least taken the incentive away for big business to expand and create more jobs because of Obama’s desire to punish the wealthy and give to the poor, way too many entitlement programs, I also read recently that the average U.S.gov’t income was around $110,000 per yr and the U.S.private sector was around 60k per yr, govt way too big period.
BTW
I really like your postings, most of the time I agree with your thinking.
have a good weekend
Comment by GREG — August 6, 2011 @ 9:20 am
Hello Jeremy
The market knew there would be a downgrade of the U.S. credit rating, so the question remains,
has the market already priced it in ? The Feds are meeting sometime next week & they may have
something up their sleeves, that is, if the market remains volatile. Although it is mostly about
the economy,(jobs), if the 2 U.S. parties embrace each other, it would certainly help. The U.S. is
still the safest place for investors, but they don’t like the uncertainty. If we get a bad start
when the European, Asian & North American markets open Sunday/Monday it won’t last forever, time
takes care of everything, all we need is something positive happening or even something very positive
being broadcast by a VIP, in the very near future. BMR stated recently that a discovery by Normont in
2007 turned the CDNX market around with vengeance. I agree that can happen again. R !
Comment by Bert — August 6, 2011 @ 9:47 am
Greg
I finally got a compliment, thank you ! I try to be truthful with my thoughts at all times,
even when i am negative. I don’t be negative for the sake of being negative, thus when
i recently posted that i had turned negative, it was because my gut told me, that we were
about to move down in a dramatic fashion & we did. Getting back to the U.S. politics, i
really can’t argue about their affairs, but one thing is for sure, i feel for President O’bama,
who in my opinion, was never given a chance & may not survive this. When he was elected the first
Black President ever, i actually felt as if i was an American, with my hand out to congratulate him.
I do ramble don’t i, but i do like posting , but hate to state things that may turn some off, so
i have to be careful or give it up all together. Thanks again Greg. R !
Comment by Bert — August 6, 2011 @ 10:03 am
Keep posting Bert, if everybody agreed on everything what a boring world we would live in. I am a firm believer in standing up for what you believe in.
Comment by GREG H — August 6, 2011 @ 10:22 am