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John: As investors it’s so easy to get caught up in the daily news releases, blogs and movements of our investments that we sometimes lose focus on the “Big Picture”.  By that I mean the indicies and sector charts which are associated with the stocks of our interest. In our case the main index is the CDNX and the sector, of course, is Gold (continuous contract). Other indexes that we need to analyze are the TSX Gold Index and of course the U.S. Dollar Index.  Over the next 4 days we will be looking at each of these weekly charts to review what has happened recently and where we believe the Gold sector and these indicies are going in the near future.

We have chosen weekly charts because we are primarily interested in trend analysis.   Today we start with the CDNX:

The first thing to notice about this chart is that the CDNX has only experienced one down week in the last 14 weeks.  This is incredible and shows what great inherent strength there is in this index.

We have previously shown how the CDNX often leads Gold and the TSX Gold Index and how these junior and microcap Gold companies are becoming an increasing force in the area of Gold investments.   The CDNX opened last week at 1793, drifted to a low of 1785, climbed as high as 1836 and then closed at 1823 for a weekly gain of 38 points (2.11%) on volume of 1.5 billion shares.

Looking at the chart we see there is a band of resistance between 1900 and 2000 (the declining 200-week moving average is also in this area) and there is no apparent resistance between the present level and 1900. The weekly SMA(20) moving average (dotted blue line) is providing strong support and is pointed up in bullish orientation. The Bollinger bands which denote volatility are getting wider, thus the volatility is increasing.  The index level is consistently closing above the upper band and shows no signs of weakening. The volume remains at a high level and since the beginning of August the average weekly volume has doubled.

Looking at the indicators:

The RSI is overbought but only at 76%, so there is plenty of room for the CDNX to climb without the RSI reaching an extreme level – bullish.

The Chaikin Money Flow (CMF) indicator (green) is high at .605 (above .25 is bullish) and shows the buying pressure  remains high – bullish.

The ADX trend indicator has the +DI (green line) above the -DI (red line) and at the 52 level, climbing and showing no signs of weakening. The ADX trend strength indicator (black line) shows the trend strength at 29 and climbing, thus getting stronger. The +DI crossed above the -DI in mid-August and that is when the bullish trend really started to kick in. All ADX indicators are in bullish orientation.

Outlook: We fully expect the CDNX to continue its bullish advance to at least the 1900 level where it will encounter some resistance.  As we’ve stated before, this is a bull market of historic proportions.  The CDNX may pause or correct somewhat after a move into the 1900-2000 area, but over the coming months we see a high probability of a very strong push well beyond 2000.

Gold came close to another new all-time high this morning before profit taking came in and drove the yellow metal down as much as $25 from its high of the day…as of 9:30 am Pacific, Gold is off $10 an ounce at $1,371…it has traded within a range today of $1,361 to $1,386…Silver has retreated 27 cents to $24.36…the Federal Reserve is certainly not coming to the defence of the battered U.S. Dollar, though the Dollar Index has moved up today on a technical rebound…Chairman Ben Bernanke said in Boston this morning that high unemployment and low inflation point to a need for a further easing of U.S. monetary policy…the sell-off we saw in Gold this morning is quite normal and healthy from a technical perspective…investors need to stay focused on the “big picture” which we believe means even higher precious metal prices in the months ahead…the “power shift” to the emerging markets is just one of many contributing factors to the rise in Gold and upward pressures on commodity prices in general…the CDNX was higher initially this morning but has since pulled back, similar to yesterday…the Venture is down 9 points to 1813…the CDNX has stayed at or above its 10-day moving average since late July and we see no reason why that won’t continue…the 10-day SMA is currently at 1790…after a 3-day 25% correction that brought the stock back to an area of strong technical support at 24.5 cents, GoldQuest Mining (GQC, TSX-V) has stabilized today…GQC is currently up a penny to 25.5 cents…this company has so much going for it in both the Dominican Republic and Spain with some outstanding Gold-silver and base metal properties…in a bullish environment for juniors, we expect GoldQuest to perform exceedingly well…it’s actually a stronger company with more potential now than it had 3 years ago when the stock got as high as $1.80, giving GoldQuest a market cap of $100 million…Gold Bullion Development (GBB, TSX-V) is down 2 pennies to 57 cents…the last few weeks have been quiet for GBB but that should change quite soon with the company’s $8 million financing expected to close sometime next week…Sidon International (SD, TSX-V) continues to hover near very strong technical support at 10 cents…the stock is currently off half a penny to 10.5 cents…our outlook on Sidon remains very positive but like with many of these junior plays, patience is important…Excel Gold Mining (EGM) is down half a penny to 17 cents on light volume…this company is focussed on developing a very valuable asset in its Montauban Property in Quebec which has outstanding Gold, silver and base metal potential which it will test very soon with a drill program…

Gold hit a new all-time high of $1,388 this morning before pulling back…as of 9:50 am Pacific, the yellow metal is up $3 an ounce to $1,375…Silver is ahead 42 cents to $24.47…the U.S. Dollar continues to slump and is now at 76.64 on the Index…it should find some technical support above 76…the CDNX is down 8 points on profit taking to 1821 after trading as high as 1836 in the early going…Gold Bullion Development (GBB, TSX-V) is unchanged at 58 cents…a turnaround in GBB’s 20-day moving average appears to be close at hand, a technical event that normally signals the beginning of a new uptrend…based on the length of time it took GBB to close its last financing, we expect the current $8 million financing to wrap up sometime next week…GoldQuest Mining (GQC, TSX-V) has pulled back 25% from its new 52-week high of 32.5 cents Tuesday…GQC is currently at 26.5 cents, down 2 cents for the day…we view this as nothing more than a healthy correction which has taken GQC back to an area of strong technical support…this company has much going for it in both the Dominican Republic and Spain, giving it massive upside potential in the bull market for juniors going forward…this is definitely one of those stocks to just tuck away for a while and not worry about…accumulating on any weakness has been the smart and successful strategy with GQC over the last month and will continue to be…GoldQuest is extremely well positioned for exploration success in the DR and potential production in Spain with the Toral zinc-lead-silver deposit…Excel Gold Mining (EGM, TSX-V) is down half a penny to 17 cents…there’s a lot on the go with Excel at the moment as the company prepares to launch a major drill program at its Montauban gold-silver and base metal property 120 kilometres west of Quebec City…Excel also announced yesterday that an exhaustive compilation of historical drill data and other geological information on Montauban is nearly complete…this is the first undertaking of its kind with respect to Montauban and it’ll give investors new insight into the potential of this property which we consider to be huge…the company has also secured a large land package of well over 100 square kilometres surrounding the former mine…geologists we’ve spoken to are very excited about the regional prospects…Excel is a perfect fit for the BMR Portfolio with the potential of Montauban and the immediate surrounding area overlooked and underrated…more drill results from Richfield Ventures (RVC, TSX-V) are expected next week…the stock has lately been digesting its large gains through July, August and September…next week’s results will determine if it launches into a fresh and possibily major new move to the upside…RVC is currently down 4 cents to $2.72…

Gold has rocketed to a new all-time high this morning, hitting $1,375…as of 8:45 am Pacific time, Gold is up $19 an ounce to $1,369…Silver has climbed 46 cents to $23.77…the U.S. Dollar’s weakness continues with the Dollar Index down a quarter of a cent and trading just above 77…technically, the TSX Gold Index is by no means overbought and appears as if it could accelerate dramatically, confirming that Gold is likely going even higher in the immediate future…the CDNX confirms this is as well and our near term technical target of 1900 – 2000 on the Venture – very possibly this month – is looking  quite achievable…the CDNX has jumped 26 points to 1830…Excel Gold Mining (EGM, TSX-V), which we added last week to the BMR Portfolio, has come out with news this morning…3 significant pieces of information …the company will be releasing a report very soon (later this month) on “the most extensive compilation of historical data ever assembled pertaining to the Montauban Mine, a former producer of Gold, silver, zinc, lead and copper“…Excel is also preparing to launch a drill program at Montauban, aided by a soon-to-be-received 3-D Gemcom geological model of the Montauban mineralized structures…the company has also arranged a small financing of $750,000 at 20 cents (3.75 million flow through shares)…we are hugely bullish on this play based on what we’ve learned about the former Montauban Mine – a large structure approximately 3 kilometres in length – and the potential as well of the surrounding area as Excel has assembled a total land package of approximately 130 square kilometres…this company has reorganized itself and has brought in new blood including Frank Basa and Jacques F. Monette from Gold Bullion Development (GBB, TSX-V) to advance the Montauban Project as quickly and efficiently as possible…Excel is exactly the type of junior exploration company we love to uncover at BMR – overlooked with an undervalued property and a great turnaround story…there is also strong community and political support for Excel’s Montauban Project which we believe can be quickly put into commercial production, starting with the North Gold Zone…Excel is currently unchanged at 17 cents…GoldQuest Mining (GQC, TSX-V) took a strange and sudden drop over a 10-minute period this morning as it fell from a high of 32 cents to a low of 25 cents before rebounding…GQC is currently at 28 cents, down 2 pennies for the day…we can’t contribute the drop to anything but someone’s foolishness…GoldQuest has so much going for it and this company should be a tremendous performer as the bull market in junior golds intensifies in the coming months…Greencastle Resources (VGN, TSX-V), a company we have followed at BMR, came out with interesting news this morning as it’s getting back into the Gold exploration business after a 3-year absense from that space…Greencastle has nearly $6 million in cash on hand (its current market cap is only $7 million) and has entered into an option agreement to acquire a 100-percent interest in a property covering approximately 13,000 hectares (28 claims) in the Nechako Plateau region of British Columbia, on trend with Richfield Ventures‘ (RVC, TSX-V) Blackwater Project…there are work commitments attached to this option and Greencastle is immediately initiating a Fugro airborne magnetic and electromagnetic geophysical survey over the property to define targets for follow-up exploration…with this move by Greencastle, it’s probably safe to assume the company is also about to unlock the value of its Nevada gold assets…it has 2 promising properties (Jewel Ridge and Indian Creek) on the Battle Mountain Trend…Greencastle’s chart has recently turned quite bullish with a reversal in its 100-day moving average and increased volume…the stock is currently off half a penny to 15.5 cents…Richfield, meanwhile, is up a penny to $2.77 …more drill results from Blackwater are expected next week…Richfield is showing signs of a potential new breakout as detailed in John’s chart analysis posted earlier today…

6:30 am Pacific

Richfield Ventures (RVC, TSX-V), which was first introduced to BMR readers last December at $1.20, has been enjoying tremendous success in developing its Blackwater bulk tonnage Gold project in central British Columbia.  Richfield has a fully winterized camp in place for continued aggressive drilling of Blackwater in the months ahead.  The company, which is armed with nearly $20 million in cash after a large financing last month,  has delievered some excellent drill results and the stock has tripled in value since early July when the CDNX bottomed out at 1343.  In a news release yesterday, Richfield announced it has acquired additional claims immediately to the west of Blackwater and that more drill results are expected sometime next week.  The stock has been consolidating recently, forming what John states below is a “continuation pennant”, in advance of what appears to be another potential breakout:

John: Yesterday Richfield traded in a narrow range, opening at $2.75, reaching a high of $2.78, a low of $2.74, before closing at $2.76 for a gain of 1 penny on rather low CDNX volume of 36,000 shares.

Looking at the 2-month daily chart we see that on August 25 the stock price broke out above the previous consolidation resistance level (blue horizontal line) on 2x the volume of each of the previous 8 sessions to a high of $1.74. This was followed the next day by another rise in price to a high of $1.98 on relatively huge volume for RVC of 588,000 shares. These two moves set up the upsloping channel which continued to form until September 16 when there was a breakout above the resistance (blue line) of the channel.

When looking for chart formations always be aware that chart patterns occur within chart patterns. In this case we see that a continuation pennant was formed inside the upsloping channel between September 7 and September 15 when the price broke above the top blue line of the pennant.   From September 16 to September 27 the price pattern was a downsloping channel, then from September 28 through now the candles have formed a continuation pennant near the top of the downsloping channel. This often occurs just prior to a breakout.

Since the beginning of September the average daily volume has declined, validating this period as one of consolidation.   I have also shown the Bollinger Bands with the SMA (20) pointing up and shown as a red dotted line. Note that the price bounced off this moving average on August 16 and August 25, and again on October 7, 8 and 12 (yesterday).   The prices have moved continuously in the top half of the upsloping Bollinger Bands which is very bullish. Also note that the Bollinger Bands are converging which indicates there could be increased volatility in the near future.

Looking at the indicators:

The RSI has been virtually flat around the 60% neutral level since September 27. This can be viewed as “bullish neutral” being above the 50% level.

The ADX trend indicator has the +DI (green line) above the -DI (red line) at 23 and 19, respectively, and flat with the ADX trend strength indicator (black line) gently sloping down at 27. These indicators are in bullish orientation but relatively flat due to the consolidation.

The Bollinger Band width indicator shows the distance between the band is very low and close to the previous low level (orange horizontal line). This previous low occurred on August 25 when the price broke above the consolidation resistance.

Outlook: Richfield’s chart patterns and indicators point to a probable breakout to the upside in the near future.

Gold has bounced around so far today in a range between $1,340 and $1,354…as of 8:30 am Pacific, the yellow metal is off $7 an ounce at $1,347…Silver has declined 8 cents to $23.20…the U.S. Dollar recovered very modestly after hitting a fresh 9-month low yesterday…the Dollar Index is now at 77.59 but well off its high of the day just below 78…despite the drop in precious metals and commodities in general this morning, the CDNX is 7 points higher at 1792…it hit a new 52-week high this morning of 1796…the CDNX is telling us that we’re likely to see Gold hit a new high in the very near future…Excel Gold Mining (EGM, TSX-V) is the newest stock in the BMR Portfolio and we’re expecting big things out of Excel beginning rather quickly…what excites us about Excel is the Gold and silver potential, not to mention the base metal possibilities, of its Montauban Mining Camp Project approximately 100 kilometres west of Quebec City…we visited the property in late August and since then we’ve done an exhaustive amount of research on this former producer…Montauban is a large structure that was intermittently mined for zinc, lead, copper, Gold and silver (nearly 4 million tonnes of ore in total) last century…geologists are now taking a fresh look at Montauban and discovering that there is an immense amount of untapped potential with this property and the surrounding area…Excel has tied up a large land package and the company’s geological consultants are also in the process of compiling an impressive amount of historical data related to Montauban, including assays from approximately 900 drill holes, in advance of a major drill program starting this fall…just one example of Montauban’s untapped potential is that Muscocho mined the North Gold Zone in the 1980’s to a depth of only 80 metres with average grades of approximately 7 grams per tonne…this zone, which also includes silver and base metal values, was traced for a length of 800 metres at the time and remains open at depth and along strike…the theory is that Muscocho only scratched the surface of what actually may exist at the North Gold Zone and overlooked mineralization extending further north…there is also a South Gold Zone which has received limited historical attention with the main base metal sulphide deposit (open at depth, historical non-compliant reserves, Gold and silver values as well) in the middle of the North and South Gold Zones…Excel has been trading in a tight range between 17 and 17.5 cents this morning…the stock has excellent liquidity and a very bullish chart…we see Excel as an exciting turnaround story fueled by a highly prospective property in one of the best areas of the world for mining and exploration…GoldQuest Mining (GQC, TSX-V), which has jumped more than 60% since we added it to the BMR Portfolio late last month, has hit a new 52-week high of 32.5 cents…GQC is uniquely positioned for success in the Dominican Republic where it has been active for nearly a decade and has several advanced-stage exploration projects…the company also has a major asset in the Toral zinc-lead-silver deposit in northwest Spain…Gold Bullion Development (GBB, TSX-V) is unchanged at 57 cents…we’re anticipating that GBB will close its $8 million financing by sometime next week with more news from Granada by month-end…Richfield Ventures (RVC, TSX-V) came out with news this morning, announcing it has acquired nearly 4,000 hectares immediately west of its Blackwater Project in central British Columbia…Richfield also stated that assay results on 4 more holes are expected next week, so some speculation may soon kick in here…Richfield is currently unchanged at its 20-day rising moving average of $2.75…RVC has consistently found support at its SMA-20 since early July, so the technicals and fundamentals both suggest this could be a strong week for Richfield with the potential for a new 52-week high…

Welcome to our site, or at least a sneak preview of it!  The final version may look much different than this as we continue to develop a very unique investment and money-management resource site.  An important component of this site is original research on small and undiscovered junior resource companies, mostly in the gold exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

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.

Disclaimer:

BullMarketRun.com is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company.  We strongly recommend that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions.  The stocks we cover, by definition, are highly speculative and potentially very volatile.  Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisors. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.  It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

The BMR Portfolio (continued)…

Sidon International Resources (SD, TSX-V)

Sidon fell as low as 9.5 cents last Monday before rebounding and closing Friday at 11.5 cents for a half cent weekly gain…the stock is now between its rising 100-day SMA at 10 cents, where there is exceptional support, and its declining 50-day SMA at 13 cents…despite the stock’s fall from a high of 18 cents in early August, quite a normal pullback from a technical perspective considering this stock was as low as 3 cents in March, we remain very bullish on Sidon’s prospects as the company advances its Morogoro East Gold Property in Tanzania…we spoke with Sidon’s President and CEO Kamal Alawas early last week and we believe the company is on the right track with its exploration plans and objectives for Morogoro East…this highly prospective property has attracted the attention this year of a lot of artesianal miners, most of whom have been cleared away but in a respectful fashion so as not to alienate the local community…several dozen of those miners are now helping Sidon with work that needs to be done at Morogoro…Sidon is currently test mining a placer deposit and making all the necessary preparations for an upcoming drill program at the property…for competitive reasons at the moment we believe Sidon is keeping its Tanzanian cards close to its chest…on the corporate front the company is exploring ways to communicate its message more effectively which includes the creation of a new web site…Sidon has come a long way over the past 6 months and overcoming growth pains is always a challenge for any junior exploration company…we’re very confident Sidon’s best days are yet to come…

Seafield Resources (SFF, TSX-V)

Seafield was up nearly 30% in September but seems to have stalled recently in the low to mid-20’s…the stock closed Friday at 21 cents, a 4-cent loss for the week…while it has fallen below an area of support between 22 and 23 cents, the next level of strong technical support is nearby at the rising 100-day moving average of 19 cents…with regard to Seafield’s fundamentals, overall we believe very strongly in the exploration potential of the company’s Quinchia Property in Colombia…there is no doubt that Quinchia hosts some excellent porphyry targets and the company’s goal of  outlining at least 3 deposits (each with a million ounces or more) in its nearly 70 square kilometre land package seems very realistic…on the other hand the pace of exploration at Quinchia has been disappointing and is something the company is going to have to address…to date they’ve only drilled at Miraflores where drilling has been slow (only 6 holes since late June out of a planned 11) due to the nature of the rock…drilling has still not started at Dos Quebradas, the property we are most excited about that has major blue sky potential…Seafield did release results last week from a recent soil geochemical survey at Dos Quebradas which further confirmed that property’s excellent potential…Chuscal is Seafield’s 3rd major property at Quinchia but it appears the company still has a few paperwork issues to settle before completely tying that property up…

Colombian Mines (CMJ, TSX-V)

Colombian closed the week at 85 cents, down a penny, as it continues to trade between its declining 100-day SMA (78 cents) and its rising 200-day SMA (95 cents)…this trend has been in place for the past month and we are anticipating a breakout to the upside once the 100-day reverses which has a good chance of occurring within the next 2 to 3 weeks…more drill results are expected in the near future from Colombian’s flagship Yarumalito Gold/Copper Property in the Marmato Mining District…broad zones of gold/copper mineralization have been intersected at Yarumalito this year including 141.4 metres grading 0.77 g/t Au in YAR-11…the company had just over $3 million in working capital at the end of July, so it’s well positioned to continue drilling Yarumalito through the end of the year as well as advance some other projects in its very large Colombian land package (over 150,000 hectares)…

North Arrow Minerals (NAR, TSX-V)

North Arrow was quiet this past week as it traded only 196,000 shares, closing at 15.5 cents for a loss of 1.5 cents on the week…we’ve been very patient with this company which has essentially drifted aimlessly since we introduced it to BMR readers last April…the biggest disappointment for us has been North Arrow’s inability to carry out a drill program this summer/early fall at its Lac de Gras diamond property in the Northwest Territories…the company finally received a drill permit last month but then said it was too late in the year to drill at Lac de Gras and has rescheduled drilling there until next spring…the company has some other properties in its portfolio and President and CEO Gren Thomas has also been searching for new opportunities…there is great potential with North Arrow and at this point we’re hoping Thomas can pull a rabbit out of the hat in the very near future and take advantage of a strong market…