Markets are weak across the board today…as of 5:25 am Pacific, Gold is down $18 an ounce at $1,566…Silver is 47 cents lower at $26.86…Copper is at a 3-week low, off nearly a dime at $3.34…Crude Oil has retreated $3.09 a barrel to $88.74 while the U.S. Dollar Index is up nearly one-fifth of a point at 83.81…
U.S. stock market futures are pointing toward a lower open on Wall Street to begin a busy new week (a barrage of earnings reports and economic news will be released this week including second quarter U.S. GDP on Friday) after Asian and European markets suffered from worries that Spain will need a full bailout…European shares are off close to 2% today while China’s Shanghai Composite sank 27 points to close at 2141…the Chinese market is looking very attractive according to some analysts, especially those who are anticipating an economic rebound in that country during the second half of the year…Chinese stocks are currently trading at 9.6 times forward 2012 earnings, compared with an average of 17.5 times since 2006, according to data from the Shanghai Stock Exchange…the SSEC has fallen 13% from the year’s high on March 2…
A slowdown in the broader Chinese economy hasn’t had an impact on the advertising market, which is a positive sign for the growing consumption-driven side of the Chinese economy that the mainstream media often overlooks….in an interview with CNBC Friday, WPP Group CEO Sir Martin Sorrell said that for the advertising industry, consumption rates matter more than the headline economic numbers…“In China, we’re up 14% so far this year,” Sorrell said…“We’ve seen no slowdown, but we’re focused on consumption”…he noted that China’s five-year growth plan shifts the emphasis from investment and savings toward even greater consumption…he said the consumption trend is also still going strong in other big emerging markets like Brazil, India and Russia…”In all those economies, the rise in the middle class has been enormous,” Sorrell said…“We’re talking about hundreds of millions of people that have been brought into a consumption phase, and that’s having an impact on our business”…
Energy Takeover
Calgary-based Nexen Inc. (NXY, TSX) has agreed to a $15.1-billion (U.S.) takeover by Chinese oil producer CNOOC Ltd., marking the most important acquisition to date by an Asian firm in Canada…the all-cash deal is worth $27.50 per Nexen share, a 66-per-cent premium to the 20-day volume-weighted average for the company, which has not seen its shares reach that level since before the financial crisis…Nexen closed at $17.29 Friday on the TSX…the Nexen takeover, which will test Canadian foreign ownership rules, is a signal of a dramatic boost in confidence by Chinese acquirers since the Unocal deal died in 2005…
Reading The Fed
The U.S. will make little progress tackling high unemployment before 2014 unless the Federal Reserve eases policy further, one of the central bank’s leading officials has warned in the run-up to a meeting next week where the option of “QE3” will be on the table…the comments by John Williams, president of the Federal Reserve Bank of San Francisco, show how the weak economy is pushing the central bank towards action to support growth…in an interview with the Financial Times, Williams predicted that unless “further action” was taken, there would be a lack of progress in boosting the jobs market – where the unemployment rate has been stuck around 8.2% since the start of the year – over the next 18 months…but he declined to call directly for a Fed move…“I think the argument against further action is the question of uncertainty around the effects, the costs and the benefits of doing so,” he said…Williams is regarded as close to the centre of gravity on the rate-setting Federal Open Market Committee, of which he is a voting member this year…the FOMC will conclude its next meeting on August 1…a series of Fed officials, including chairman Ben Bernanke, have said the central bank will need to consider further action unless it sees progress towards lower unemployment…
Silver Chart
While it’s down today, Silver has been gathering internal strength recently while testing key support at and above its December lows in recent weeks…the unusually bullish COT and sentiment indicators for Silver suggest that a powerful upside move is in the works, likely commencing during this third quarter…commercial short positions are close to record lows, while the large and small spec long positions are also close to record lows…the commercials are rarely wrong, so our money is on them….a new uptrend in Silver which will really gain traction and accelerate once the price succeeds in breaking above the downtrend line as shown in John’s 1-year weekly chart below…
Alexco Resources (AXR, TSX)
A strong Silver producer to keep in mind for a potential major upside move in the metal is Alexco Resources (AXR, TSX) which has been hit hard since March…selling pressure remains intense, as John’s chart shows, but common sense tells us to go in the opposite direction of the crowd with this one at the moment…AXR closed at $4.10 Friday…
Everton Resources (EVR, TSX)
On Friday, we had a brief chat with Everton Resources‘ (EVR, TSX-V) President and CEO Andre Audet who has agreed to do another interview with BMR in the near future…Everton is focused on the hot Dominican Republic, where of course GoldQuest Mining (GQC, TSX-V) has made a significant discovery, but EVR is still languishing under a dime…it’s trading at long-term support and should be on everyone’s radar screens as there’s enough interest in the DR right now that Everton shouldn’t have a problem attracting joint-venture partners for its projects which, it appears, is the route it will need to take…we’ll have more on Everton in the next week or so…in the meantime, below is an updated multi-year weekly chart from John…
Corvus Gold (KOR, TSX)
Corvus Gold (KOR, TSX), which we’ve mentioned several times in recent months, is enjoying exploration success in Nevada and has been a strong performer this year…based on fundamentals as well as John’s latest chart, we see Corvus as having considerable potential during the second half of 2012…
Note: John, Jon and Terry do not hold positions in AXR, EVR or KOR.
The up pattern in the TSX.V chart has been broken. A “W” formation will not occur. I would be very careful with any buying here.
I will be holding off on the 2 I spoke about as I monitor trading action the next few days.
Comment by dave — July 23, 2012 @ 5:37 am
Thanks much. Looking forward to the interview with Audet of Everton Resources.
Comment by George Wohanka — July 23, 2012 @ 5:39 am
Please be reminded that there is a limited amount of selling & it will dry up, in particular,
on the Venture. We have been beaten down more than any other exchange, so it is safe to say,
that there’s a good possibility that we will see the day, when we move up when other exchanges
move down. Better days ahead. R !
Comment by Bert — July 23, 2012 @ 5:42 am
Andre Audet does not, in my opinion, do good interviews. I have as much faith in him as I do in Roodenburg and Pirie – none. 🙂
Comment by Andrew — July 23, 2012 @ 6:01 am
I don’t know that there will be a limited amount of selling. I wouldn’t be surprised to see the venture tumble another 10 – 20%. The only thing preventing it from crashing right now is low volume and investors away for the summer but that could change in a flash.
Comment by Andrew — July 23, 2012 @ 6:13 am
Andrew, I know it’s Monday and the markets are down, but try to cheer up. Maybe Bert needs to post another poem.
Comment by Jon - BMR — July 23, 2012 @ 6:20 am
Bert tries to always speak with optimism, and that is good to a point. But this could be an ugly August coming up. Yes, the market will turn around but it may wait till September.
RBW did a “shooting star” candlestick the other day, I was not surprised to see the open with a gap down.
Comment by dave — July 23, 2012 @ 6:32 am
Dear Andrew,
Even through the joy I feel the pain
Even in the sun I feel the rain
Even when I’m high I feel the lows
Like that’s all I know
And lord knows I can’t complain
But even when I do it feels the same
I’m getting high just to fight the lows
Cause that’s all I know.
Comment by Bert — July 23, 2012 @ 6:57 am
Dear Andrew
Even through the joy I feel the pain
Even in the sun I feel the rain
Even when I’m high I feel the lows
Like that’s all I know
And lord knows I can’t complain
But even when I do it feels the same
I’m getting high just to fight the lows
Cause that’s all I know
Comment by Bert — July 23, 2012 @ 7:02 am
Sorry for the double posts, i didn’t think the first one went through.
So Andrew you are getting a double dose today.
Comment by Bert — July 23, 2012 @ 7:04 am
ATC was down 0.21 earlier now 0.10. Remember what our buddy Jon wrote,
watch ATC for an indication of how the Venture will perform. Although i
don’t agree with that line of thinking, i will grab onto anything during
those troubling times, but we will rebound & the positive market will take
care of all the doom & gloom. R !
Comment by Bert — July 23, 2012 @ 7:11 am
We need more of this:-
From, PG
Mining and Exploration Shares – The juniors are especially suggesting their wash-up is near complete. We actually started to see some bids come into the market late last week In case you forgot, a bid is where someone is actually willing to buy shares-lol).
Comment by Bert — July 23, 2012 @ 7:22 am
Readthe lead article on stockhouse. Looks like Copper is forming a “head and shoulder” pattern. Oh brother.
Comment by dave — July 23, 2012 @ 9:13 am
Todays smile.Money is not everything but it sure helps us keep in touch with our children
Comment by gil — July 23, 2012 @ 9:28 am
There are two extreme views a optimist and a pessimist\And there is Andrew a realist
Comment by gil — July 23, 2012 @ 9:35 am
As for the Stockhouse post, i call those guys ”opportunists”, they come in and go out with the
tides. In this environment, how can anyone predict with certainty what may happen next week, next
month, in particular, since Big Ben at times, can move the markets when he speaks.. I will take it
one day at a time… R !
Comment by Bert — July 23, 2012 @ 9:53 am
What does the board think of CSQ and its potential moving forward? had a bit of a selloff today but helped improve technicals a bit. Assays expected almost on weekly basis.
Comment by db — July 23, 2012 @ 3:40 pm
db – CSQ is on my watch list, all time high today and possibly an entry point at the close. Its still O/S and I’ll watch the action at the open. I’m also watching ATY 39.7m Sh OS and after today’s sell off RSI dropped to 53
Comment by Andrew — July 23, 2012 @ 5:09 pm
BMR
How can I find the watch lists that you posted a while back, I think Levon was on that list?
thanks
Comment by greg — July 23, 2012 @ 9:57 pm
db – CSQ O/B sorry (not O/S)! 🙂
Greg – the original lists were posted 27th February. Several plays have since been added.
“Strong Plays”, “Watch Lists” And The “Sleeper List”
We’ve mentioned a lot of good companies over the last few months, and since we started in the summer of 2009, so to provide some focus going forward (especially considering how bullish the markets could be) we’ve created five separate lists (the “BMR Group”) which include a total of 35 companies…the categories are as follows…
“Strong Play” Group A
“Strong Play” Group B
“Watch List” Group A
“Watch List” Group B
“Sleeper List”
The “Strong Play” groups are those companies that we believe (based on fundamental and technical considerations) have the best chance of superior market performance over the short to medium term and, in particular, over the next six to nine months…from a technical perspective, each of them also has a rising 300-day moving average (SMA) which shows they are already market leaders and out-performers…the “A” list is considered to be marginally superior to the “B” list in terms of potential price appreciation…
The “Watch Lists” (also separated into “A” and “B” levels) are excellent prospects for the balance of the year that should be watched closely for additional news and developments that may warrant an upgrade in our system…
The “Sleeper List” consists of companies whose market caps have been knocked down considerably for various reasons but could rebound abruptly and therefore offer excellent potential…as the saying goes, buy low and sell high…Cadillac Mining (CQX, TSX-V) was a great example of that recently…
We will periodically update our lists (perhaps once a week) and that may include deletions and/or additions…please read our disclaimer…we are not making “buy”, “hold” or “sell” recommendations…we are merely putting companies forward that we believe are worthy of our readers’ due diligence…we will be commenting on each of these 35 situations over the coming week…
Strong Play Group “A” (5)
Rainbow Resources (RBW, TSX-V), Wildcat Silver (WS, TSX), Cap-Ex Ventures (CEV, TSX-V), Focus Metals (FMS, TSX-V), Adventure Gold (AGE, TSX-V)…
Strong Play Group “B” (5)
Richmont Mines (RIC, TSX), Great Panther Silver (GPR, TSX), Scorpio Mining (SPM, TSX), Alexco Resources (AXR, TSX) and GoGold Resources (GGD, TSX-V)…
Watch List Group “A” (10)
Cascadero Copper (CCD, TSX-V), Gold Bullion Development (GBB, TSX-V), Abcourt Mines (ABI, TSX-V), Kaminak Gold (KAM, TSX-V), ATAC Resources (ATC, TSX-V), RJK Explorations (RJX.A, TSX-V), Corvus Gold (KOR, TSX), Gold Standard Ventures (GV, TSX-V), Canaco Resources (CAN, TSX-V), Sprylogics International (SPY, TSX-V…
Watch List “B”(15)
Spanish Mountain Gold (SPA, TSX-V), Arian Silver (AGQ, TSX-V), Geologix Explorations (GIX, TSX), St. Andrew Goldfields (SAS, TSX), Seafield Resources (SFF, TSX-V), Amarc Resources (AHR, TSX-V), Sunridge Gold (SGC, TSX), McEwen Mining (MUX, TSX), Volta Resources (VTR, TSX), Golden Predator (GPD, TSX), Hana Mining (HMG, TSX-V), Prodigy Gold (PDG, TSX-V), Encanto Potash (EPO, TSX-V), Huldra Silver (HDA, TSX-V), iSign Media Solutions (ISD, TSX-V)…
“Sleeper List” (5)
GoldQuest Mining (GQC, TSX-V), Currie Rose Resources (CUI, TSX-V), Greencastle Resources (VGN, TSX-V), Rackla Metals (RAK, TSX-V), CMC Metals (CMB, TSX-V)…
Comments…you’ll notice there are two non-resource companies on the above lists – Sprylogics International (SPY, TSX-V) and iSign Media Solutions (ISD, TSX-V)…yes, there are a number of companies we have probably overlooked but as we mentioned at the top, our system has some built-in flexibility for additions and deletions as the weeks go by…as always, perform your own due diligence…
Comment by Andrew — July 24, 2012 @ 5:33 am
Thanks Andrew
Comment by greg — July 24, 2012 @ 8:28 pm