BullMarketRun.com

The CDNX managed to bounce off its 50-day moving average at 1,490 this morning, closing the day at 1,502 for an eight point loss…the modest recovery late in the trading session was an encouraging sign, as was the movement in the TSX Gold Index which hit at a low of 304 this morning before finishing at 311…we believe we’re at a key juncture in the CDNX with either a nearly immediate major move to the upside, or a breakdown to at least the 1,400 area…in this kind of a situation, we simply have to wait patiently for the market to give us a definitive sign which could come as early as tomorrow or the beginning of next week…an important clue for us would be whether or not the CDNX’s 20-day moving average can remain in an upswing as it has since last July – in order for that to continue, this market is going to have to reverse upward immediately…the current market action does have some parallels with last October, from a technical standpoint, so a sudden and very powerful move to the upside as we saw October 29 and November 3 (47 points and 37 points, respectively) cannot be ruled out which would turn this market around in a hurry…gold tested its December low again today, just above $1,070, and is currently trading at $1,085 as of 1:30 pm Pacific time…another factor we have to watch out for is a potential technical breakout in the U.S. dollar, an event that has been brewing for a while now (this would likely put downward pressure on commodities)…a bullish case for the CDNX is the fact gold is off nearly 12% from its December high but the Venture is actually up 2.5% from its December high…this is a bullish divergence and confirms in our view that an all-out crash in commodities and the CDNX is simply not in the cards…