BullMarketRun.com

The re-election of President Obama and an even more deeply divided Congress is producing volatility in the markets today…with the election out of the way, investors’ focus has shifted to the U.S. “fiscal cliff” and how Obama will handle that, and other issues such as global growth and the euro zone debt crisis…Gold rallied strongly yesterday on the assumption of an Obama win, and climbed as high as $1,734 this morning before pulling back on what has become a “risk-off” day in the markets…as of 8:15 am Pacific, the yellow metal is now down $8 an ounce at $1,709…Silver has backed off to $31.45, a loss of 57 cents for the day…Copper is down 8 cents at $3.44…Crude Oil is being hit hard, down $3.47 a barrel to $85.24 while the U.S. Dollar Index, after initially falling last night when Obama was officially declared the winner, has rebounded and is up one-tenth of a point at 80.75…

Obama managed to win a second term in the White House thanks in part to an extraordinarily negative campaign with little vision for how the next four years may play out…the Latino vote, which has grown increasingly important in American politics, was overwhelmingly behind the President which helped in Florida and elsewhere…Republican challenger Mitt Romney, who came fairly close in the national popular vote but lost decisively in the electoral college, couldn’t overcome some personal “brand” issues and his political career is now likely over after two attempts at trying to become President…Democrats actually increased their majority in the Senate while the Republicans’ only bright spot was making some gains in the House where they already commanded a majority…another big winner last night was probably Fox News which can look forward to an even greater ratings bonanza over the next four years as it appeals to the anti-Obama element that may become increasingly frustrated…

The market now will likely focus on expectations for continued relaxed U.S. monetary policy and the need for resolving the so-called “fiscal cliff”, nearly $600 billion worth of forced spending cuts and tax increases that risk pushing the economy into deep recession…

Election Result Views

Barack Obama’s re-election as President was unexpected and is disappointing, but will in all likelihood boost stock markets, according to Dennis Gartman, founder of the Gartman Letter…“History proves that Democrat presidents are better for stock prices than Republican presidents and I suspect that the bull market that’s been intact since March 2009 will continue to move higher as the monetary authorities expand reserves in the system,” he told CNBC…meanwhile, Jim Rogers told CNBC that investors should prepare for rising prices and more expansionary monetary policy now that Obama has won re-election…the co-founder of the Quantum Fund said he expects Obama’s policies will drive up commodities and drive down the U.S. dollar…“It’s going to be more inflation, more money printing, more debt, more spending…it’s not going to be good for you me or anybody else…it looks to me like money printing is going to run amok now, and spending is going to run amok now…I have to invest based on what’s happening and not what I would like”…

Updated Gold Chart

Gold’s major challenge at the moment is to break above important resistance at $1,730…RSI(14) on John’s 6-month daily chart below is now showing up momentum after finding support around 30 as expected…however, the ADX indicator still confirms a bearish trend which began in mid-October when Gold slipped below its EMA-20 which also reversed to the downside…so Gold still has some issues to work out, as evidenced by today’s trading, before we can proclaim the beginning of a new uptrend…the “Big Picture” view of course is still bullish, and an Obama victory last night has helped to solidify that…

Today’s Markets

Asian markets were mixed overnight while European shares, which initially rallied following Obama’s re-election, reversed course and are ending sharply lower…data came out today that showed German industrial output fell more than forecast in September…in addition, a report released by the European Commission also weighed on the markets as it showed growth for 2013 would flatline but would pick up again in 2014…North American markets are weak this morning, in particular the Dow which is suffering its fifth triple digit loss in the last 20 sessions…as of 8:15 am Pacific, the Dow is off 309 points to 12936…the TSX has shed 136 points while the Venture Exchange has slipped 17 points to 1286…

TSX Gold Index

The TSX Gold Index is plodding along with the 200-day moving average (SMA) providing support in the low 320’s…a sideways trend is still in place, as John shows in the 6-month daily chart below, until there is a definitive move through the 330 area…as of 8:15 am Pacific, the Gold Index is down 2 points at 327…

Huldra Silver (HDA, TSX-V)

Huldra Silver (HDA, TSX-V) continues to be a shining light in this market as the company ramps up production from its Treasure Mountain Silver-lead-zinc deposit…as of 8:15 am Pacific, HDA is up a penny at $1.55 after breaking through some important resistance yesterday…below is an updated chart from John…

GoldQuest Mining (GTC, TSX-V) Updated Chart

“This quest is just beginning,” according to Dundee Capital Markets which issued a report on GoldQuest near the end of last week after the stock touched its 200-day SMA at 70 cents…as of 8:415 am, GQC is unchanged at 86 cents…”This new discovery, while still modest in size (1 to 2 million ounces of Au), has all the qualities of a future low cost producer…the core zone of high grade represents high quality underground ounces that could potentially be mined in the lower quartile of costs based on grade and configuration”, the Dundee report stated…the new support band for GQC is between 67 and 71 cents while the next major resistance is $1.05 according to John’s 6-month weekly chart…

Note:  Jon holds a position in HDA and GQC…