Gold took off above $1,700 an ounce overnight to another new record high of $1,716.50 on the Spot Market…as of 8:30 am Pacific, the yellow metal is holding above $1,700…it’s currently $44 higher at $1,707…Silver has pulled back somewhat after climbing above $40 an ounce – it’s up $1.01 at the moment to $39.33…Copper is 13 cents lower (an 11-week low) at $4.00 a pound, Crude Oil is off $3.54 to $83.34 while the U.S. Dollar Index is firmer despite S&P’s credit downgrade…the greenback is one-third of a point higher at 74.74…Morgan Stanley continues to favor Gold…supportive influences of course include the U.S. debt downgrade late Friday by Standard & Poor’s, softer U.S. economic data that adds to expectations that monetary policy will remain accommodative for an extended period (with the possibility of “QE3”), and euro zone debt worries…“We continue to strongly recommend exposure to Gold, not only as a consequence (of) the events of the past week, but also through next year, which reflects our conviction that heightened demand for safe-haven commodities will be sustained by lingering investor concern over sovereign debt and growth risks in the U.S. and Europe, all occurring amid historically low real interest rates,” Morgan Stanley stated…borrowing costs for Spain and Italy tumbled today as the European Central Bank intervened to buy the countries’ respective bonds and try to stabilize financial markets…Spanish borrowing costs also dropped, the 10-year bond yield falling 72 basis points to 5.32%…when a stock market plunge starts making headlines on the TV news and on the front pages of every newspaper (i.e., this morning: “Crisis of Confidence Grips Markets“, “Bad Day Ahead For Wall Street“, “Global Shares Sink After Downgrade“, “U.S. Stocks Ready To Tumble After Downgrade“), that’s typically when you know a bottom is likely very close at hand…it’s one of the best indicators of all and one of the smartest strategies is to go in the opposite direction of the herd…not surprisingly, equity markets got slammed right off the bat this morning but seem to be stabilizing…Gold producers are doing terrific today (lower oil prices are also helping them) but many of the speculative juniors are hurting…the CDNX is off another 108 points to 1704 after declines of 112 and 42 points, respectively, Thursday and Friday…that kind of a steep plunge – 13.5% in 3 days – is what is often seen at a market bottom but what we’re also looking for is a powerful bull hammer reversal…RSI(14) and Stochastics each show the Index is in very intense oversold conditions so this is just not a wise time to fall victim to fear and throw quality stocks overboard…some investors however are doing that anyway but that’s what makes a market…one potential bottom, if it’s not 1700, could be just above 1600 where the Index ran into resistance in early 2010…in fact, that’s also very close to a 50% retracement of the entire gain from late 2008 to early March of this year…this is not a re-run of 2008 in our view…rising 300 and 500-day moving averages are still firmly in place for the CDNX…there are several interesting situations for bottom-fishers to keep an eye on…the Yukon will produce more excitement as the summer progresses and some of the best plays there have been knocked down considerably…they include Golden Predator (GPD, TSX) which has demonstrated strong support around $1.00…Kaminak Gold Corp. (KAM, TSX-V) which has fallen below support at $4.00 and could test the $3.00 level…Silver Quest Resources (SQI, TSX-V) which is now in the mid-80’s which was a strong resistance area during the spring…Pacific Ridge Exploration (PEX, TSX-V), Ethos Capital (ECC, TSX-V) and Northern Tiger (NTR, TSX-V) are also quality situations…of course the leader of the pack, searching for a Carlin-style discovery, is Atac Resources (ATC, TSX-V) which is down a dollar per share at $7.15…savvy traders/investors in conditions such as this will look for extreme oversold conditions in individual stocks and patiently wait for panic-stricken sellers to hit a bid and perhaps even a “stink bid”…Prodigy Gold (PDG, TSX-V) has been knocked down to 40 cents and it’s at its lowest RSI(14) level since its 2011 bottom in January…Romios Gold (RG, TSX-V) is a quality exploration play in the Galore Creek area of British Columbia which we first mentioned when it was trading around 40 cents…it rocketed as high as 65 cents July 26 and is now back down to 45 cents…we’ll be focusing a lot in the coming weeks on northwest Quebec (we’re visiting the Rouyn-Noranda region again soon) where there are several very interesting advanced exploration plays…Richmont Mines (RIC, TSX) growing Wasamac deposit, 15 kilometres west of Rouyn-Noranda, has yet to be fully recognized by the market…of course Richmont is also a cash-rich producer with two mines in operation at the moment and a third (Francoeur, near Wasamac) expected to be in commercial production by early in the first quarter of next year…RIC has powerful earnings momentum and its Q2 financials could come any day now…Visible Gold Mines (VGD, TSX-V) is actively drilling in the Wasamac area and recently announced that three rigs were on its Wasa Creek Property…so something could be cooking for VGD near Wasamac…both Richmont and Visible Gold Mines are up this morning in this down market…of course we continue to be very bullish on Gold Bullion Development’s (GBB, TSX-V) Granada Gold Property…Adventure Gold’s (AGE, TSX-V) has been enjoying great success with its Pascalis-Colombiere Gold Property near Val d’Or and yet the stock is trading not far off its 2011 low…
Interesting quotes from the weekend…
“Our currency is not AAA, and in recent months the performance of our government has not been AAA, but our debt is AAA”…”I can go out drinking all night, but if I’ve got a printing press, my debt is good.” – Warren Buffet
“This is not an issue of credit rating…the United States can pay any debt it has because it can always print money to do that…there’s zero probability of default…what I think the S&P (downgrade) did was to hit a nerve…it’s hit the self-esteem of the United States, the psyche…and it’s having a much profounder effect than I conceived could happen.” – Alan Greenspan
“zero probability in default”, oh common, you think like too many americans that say it can’t happen. China will pull the plug next year in Dec. 2012. It will be major nightmares for all americans. BMR, I have lost all faith in you. I am off this board. Have a great life.
Comment by dave — August 8, 2011 @ 7:42 am
Dave – did you read the article carefully??
Comment by Hugh — August 8, 2011 @ 8:05 am
haha that was a quote from Greenspan not BMR!
Comment by marc — August 8, 2011 @ 8:07 am
Unfortunately Greenspan is right, Bernanke will just keep printing the dollars and gold will keep going higher, and unfortunately inflation will be out of control.
Comment by GREG H — August 8, 2011 @ 8:16 am
Man
I see some good buys out there, but last week they looked like good buys when I bought them too, now they are lower and really look good, how does one know when the bottom is in? crazy times.
Comment by GREG H — August 8, 2011 @ 8:19 am
I hope Obama has something helpful to say at 1:00pm today.
Comment by Andrew — August 8, 2011 @ 8:34 am
The S & P are not finished yet, they have now downgraded some American
institutions, including Fannie Mae, Freddie Mac & would you believe
Berkshire Hathaway. How can one make predictions in this environment. R !
Comment by Bert — August 8, 2011 @ 8:42 am
The market is buying U.S. treasuries fast & furious, so where’s the
worry about the U.S. debt.. It speaks volumes that the U.S. is still
the safest bet to store ones’ cash. So what’s going on today, could
it be that the European Union has to get its’ house in order. R !
Comment by Bert — August 8, 2011 @ 9:50 am
What’s going on now is positive proof that you shouldn’t listen
to the likes of me, instead of moving up, we continue to move
down. I am still somewhat hopeful that the indices will reverse
to the upward before close. R !
Comment by Bert — August 8, 2011 @ 10:35 am
Like I said last week…. It’s not over. Italy,spain,Ireland will be back in the news and another 10% correction if not more for the near futur. But, some here , Barry for example, will still, like a drug or slot machine addict, chearing for ventur stocks. Well that’s life.
Comment by Andre — August 8, 2011 @ 12:32 pm
Did you hear this ?
High frequency machines are blamed for disrupting the market & it is being checked into by
the authorities. It’s unbelievable how fast the 200 or so companies, using those machines,
can trade, many trades can be completed in a minute fraction of a second, no wonder i can’t
seem to peg the market these days. The problem is so bad that the Dow floor traders can’t
even compete & are being squeezed out. Force the manipulators to stop says me & bring some stability to the market. We need a level playing field & what the floor traders may consider level, would still be lopsided for us poor souls, who trade on the lowly man’s exchange. R !
Comment by Bert — August 8, 2011 @ 1:52 pm
Bert – I share your pain… would someone mind pulling the tree stump named Hedgy from my butt!!!! I am hurtin….
Comment by Jeremy — August 8, 2011 @ 1:53 pm
Jeremy
Have you ever considered playing the stock market, instead of pulling stumps,
it would be less painful. R !
Comment by Bert — August 8, 2011 @ 2:32 pm
Because selling has been so violent last few days, I think Fed’s hands are tied in terms of monetary stimulus. It’s plausible that QE3 can be coming…
Comment by Bruce — August 8, 2011 @ 4:10 pm
What a day for those bank stocks… all down 3-4 %…. My bank stocks had a big hit today… but I am not dumping them as I know that it can climb back later in the year. The adjustment appears to continue for another 10 – 15% as the US crisis affect worldwide. Coming back to my favorite junior stocks… GBB’s Friday close had no support and it plunged down to 33.5 cents. I put a buy order at 33 cents but I did not get it. I took out my SD 3 cents buy lot … waited a little longer as I said, 3.5 cents has a lot of support…. today closed at 3 cents…. SFF may come below 20 cents this week. NAR – I bought some today at 18 cents and I am still accumulating and hopefully, I can come up with 100,000 before the news come out. BER – another stock which I bought today at 8.5 cents and bottom price has reached. I am trying to accumulate this one and hopefully, the same I can get 100,000 soon within this week… but I am not in a hurry as this is buyer’s market… Currently, I am holding GBB, SD, NAR and BER….
Comment by Theodore — August 8, 2011 @ 4:31 pm
Theo, what kind of indicators are you using, especially SFF? Thanks.
Comment by Bruce — August 8, 2011 @ 5:01 pm
At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it – there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.
I am trying to find a verse in the bible on how to handdle this latest correction…. Can’t find any. Can you help me?
Comment by Andre — August 8, 2011 @ 5:31 pm
My sixth sense…. SFF will have an adjustment and you can see there are volumes but the price has been dropping… There are quite a big volume changing hands but it is going down… meaning some other people are dumping. I bought SFF long time ago but I sold all of them at about 29 cents…. In my opinion, it does not matter how the chart looks like, my sixth sense tells me it will be in 18-20 cents range for some time.
Comment by Theodore — August 8, 2011 @ 6:23 pm
Interesting observation. I just checked the chart and you are right. Big lot trades were usually lower in price than the preceding trade. I got in at 30c so I’m bleeding on this one.
Comment by Bruce — August 8, 2011 @ 6:55 pm
Bruce, you never know… no one knows that SFF went up to 70+ cents … BER went up to 39 cents first day after they corrected the numbers and now, it went back to the price before announcement. I am thinking that 8 cents range will be the bottom price.. and I scoped some for my sixth sense collection. SD is only a matter of when the news will come out…. very soon I believe…. . The rule is to keep on buy/ sell but you do not necessary hold the stock all the time….. some days my position is zero…… but I never put 100% to stock… reserving 20% for buying….
Comment by Theodore — August 8, 2011 @ 7:28 pm
Finally, it seems we have stabilized. Congratulations may be in order, to those who toughed
it out & to those, who didn’t allow the pressure, as a reason to fall out with their
neighbor. No doubt, it was a scary move down & may not be over yet, but i do feel we will
see better days, but it may take some time for us to recoup our losses. I have always said
charts are accurate when looking at the past, but the future is not ours to see. The same
things applies, that the more stocks we own, the better chance we have of doing well, but
it’s not a guarantee of doing well & when the going gets tough, we ask ourselves, where are
all the buyers. I am only rambling now. Have a good day. R !
Comment by Bert — August 9, 2011 @ 2:49 am
Because SQI was being highlighted by BMR & because i brought it forward earlier, i feel
i can bring forward this news without a complaint & hopefully some of you have positions:
SQI intersections 28 metres of 2.8 gms. per tonne gold at Davidsons……. R !
Comment by Bert — August 9, 2011 @ 4:51 am
You played a good hand, Bert! Nice reward with news from SQI. RIC earnings were good as BMR had forecasted. Hope it continues to be a good day.
Comment by Andrew — August 9, 2011 @ 6:03 am
We are fortunate to see the stocks turn around this morning. God help those of us on
the Venture exchange, if we didn’t see a turn around, according to how quick sellers
come in on SQI, with excellent news. As mentioned previously, it’s going to take
time to regain confidence & we may need 2 big discoveries & not 1…. R !
Comment by Bert — August 9, 2011 @ 6:47 am