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Gold is down for the second straight day but continues to hold above major support at $1,350…an optimistic U.S. economic growth forecast from Federal Reserve Chairman Ben Bernanke yesterday was the catalyst for a sell-off in Gold with investors fearing that Bernanke may ease up on “QE” measures…not surprisingly, China has also taken additional steps to tighten its monetary policy as emerging markets continue to battle inflationary pressures…as of 8:20 am Pacific, the yellow metal is down another $16 for the day at $1,358…reports are that physical buying remains strong in Asia and that should help underpin prices…Silver is off 48 cents at $28.26 while the U.S. Dollar Index is essentially unchanged at 79.17…U.S. December retail sales rose 0.6%, less than the 0.8% analysts expected but sales for all of 2010 gained 6.65% after falling 6.5% in 2009…the annual gain is the largest since 1999…CPI numbers also came out this morning…December CPI rose 0.5%, the biggest increase since June, 2009, due to higher gasoline prices…the core CPI rose 0.1% for December which was in line with expectations…the CDNX is off sharply this morning, declining 21 points to 2268…technically, this is still a very healthy market and the winning strategy in our view continues to be to embrace any weakness…the TSX Gold Index has dropped below rising its 200-day moving average (SMA) for the first time since last summer…this has happened on only a handful of occasions over the last two years and each time it has presented an excellent buying opportunity with Gold hitting a bottom…Gold Bullion Development (GBB, TSX-V) is off three pennies at 76 cents after dropping as low as 71 cents…GBB is following a familiar and bullish technical pattern if you look closely at its chart over the last number of months…this kind of weakness has consistently represented an attractive opportunity…Seafield Resources (SFF, TSX-V), which has shown good strength in recent days, is off two pennies at 56 cents…the Seafield chart looks very positive as John outlined this morning…we’re keeping a close eye on Kent Exploration (KEX, TSX-V) which is firming up on a significant turnaround in its fortunes…Kent was a market laggard during the final six months of last year but we expect it will enjoy a much better first half of 2011…the financing for spin-off company Archean Star Resources has been completed and Archean Star is expected to be approved for trading very soon on the Venture Exchange…that represents a nice “dividend” for Kent shareholders…drilling is on-going at the Gnaweeda Gold Project in Western Australia where Kent (Archean Star) is following up on last spring’s impressive result of 18 metres grading 12.34 g/t Au at Bunara…the technicals are looking much more favorable now for Kent and the stock is currently up half a penny at 15.5 cents on relatively strong volume of over 500,000 shares…Currie Rose Resources (CUI, TSX-V) is trying to find its footing…CUI hit a low of 17 cents this morning but is currently unchanged at 18 cents on over three million shares…bargain hunters are definitely stepping as CUI tries to gain some traction out of oversold conditions…Abcourt Mines (ABI, TSX-V) is up a penny at 19 cents after some “gap-filling” yesterday…the chart and fundamentals with this one are extremely positive…

6:00 am Pacific

John: Yesterday, Seafield Resources (SFF, TSX-V) opened at 56 cents, dropped to 54 cents and then climbed to a high of 62 cents. It closed at 58 cents for a gain of 2 pennies on CDNX volume 3.1 million shares.  Looking at the 2-month daily chart we see that after the sudden and huge move to 77 cents early in December, Seafield has been consolidating in a bullish downsloping flag.  Yesterday’s trading showed a definite breakout to the upside on the highest volume in the last 18 sessions, a very bullish sign.

The next major resistance will be at 77 cents (blue horizontal line). There is strong support at the bottom of the flag (green sloping line) and also at 50 cents which also coincides with the Fibonacci 38.2% retracement level.

The last 4 trading days have seen consecutive higher closings accompanied by consecutive higher volumes. These are the required ingredients to form a base for a breakout and a strong move to the upside.   The next Fibonacci target level is $1.04 (this is not a BMR price target as we don’t give price targets but a theoretical Fibonacci level based on technical analysis).

Looking at the indicators:

The RSI on January 10 bounced up off the previous RSI support level at 50%. It is now at the 61% level and climbing – very bullish with a long way to go before becoming overbought.

The Chaikin Money Flow (CMF) indicator has shown bullish buying pressure in the last 5 sessions with yesterday’s showing the highest pressure at .251 – very bullish.

The ADX trend indicator has the +DI (green line) climbing at 32 and above the -DI (red line) at 17. The +DI and the -DI touched on Jan. 10 but did not cross, keeping the bullish trend intact.  This was also the time when the RSI and price bottomed out (vertical blue dotted line). The ADX (black line) trend strength indicator is preparing to turn up at the 33 level. The bullish trend is strengthening.

Outlook: SFF appears to have bottomed out and is starting what appears to be the beginning of a strong move to the upside in the near future.

Note:  The writer holds a position in SFF.

Gold has been bouncing around today between a low of $1,377 and a high of $1,394…as of 11:15 am Eastern, the yellow metal is off $4 an ounce at $1,384…Silver is 25 cents weaker at $29.40…the U.S. Dollar has dropped sharply on a rise in U.S. jobless claims and is currently down three-quarters of a point at 79.34…the CDNX, which hit a new two-and-a-half year closing high yesterday of 2303, is currently down 7 points at 2297…it got as high as 2311 in early trading where there is some minor resistance from the January 4 high of 2312…last week, we stated a low was likely being put in around 2200 which is exactly what happened…again this underscores the importance of embracing any weakness in this extremely bullish market…our first of two trips very early in the New Year to northwestern Quebec and the Cadillac Trend has concluded…this first visit was research-focused and we’ll be returning to the area again shortly for some very interesting coverage…we have a great deal of geological material to review and an even better understanding of the incredible opportunities many companies active in this area offer…through conversations with several independent geologists and others, it’s clear there is intense interest in what’s happening at Gold Bullion Development’s (GBB, TSX-V) Granada Gold Property and in the surrounding area…this is pure speculation on our part, and we caution we’ve been proven wrong before, but news from Granada is overdue (the last drill results came out November 19) and we wouldn’t be surprised to see a major update from GBB sometime next week in advance of the Vancouver Resource Investment Conference January 23-24 (which we’ll be attending)…Gold Bullion will want to put its best foot forward at that event as with every other company…GBB is currently off a penny at 80 cents…we’re expecting big things out of Richmont’s (RIC, TSX) Wasamac Gold Property (15 kilometres west of Rouyn-Noranda) where extensive drilling has taken place since last May…Richmont is aiming to bring this former producer back into production (underground operation) and we see a strong possibility of a major upward revision of resources when a new estimate comes out in the near future….the company is expected to use a lower cut-off grade to expand the mineralized envelope…the geometry of this deposit is such that mining costs can be kept relatively low…the principal shear zone hosting the Gold mineralization at Wasamac dips northerly toward ground held by Cadillac Mining (CQX, TSX-V), a fact we predict that’s going to make things very interesting for Cadillac…in addition, CQX has already confirmed the potential for VMS mineralization on its Wasa claims through only limited drilling to date…Cadillac has other strategic claims in the area and also appears close to nailing down some potential major property acquisitions in the Great Basin…this is a company we expect to do extremely well this year…Cadillac is currently 2.5 cents higher at 40 cents…Abcourt Mines (ABI, TSX-V), recently added to the BMR model portfolio, is up half a penny at 21 cents…Abcourt has one of the best undeveloped silver-zinc deposits in the country with a very positive feasibility study produced by GENIVAR in 2007…Abcourt’s Elder-Tagami Gold Project just north of Rouyn-Noranda has also attracted our attention as resources appear to be building nicely there…Sidon International (SD, TSX-V) released encouraging news this morning from drilling at its Morogoro East Gold Property in Tanzania…the first six holes have been completed over a strike length of 900 metres…Sidon reports zones of disseminated sulphides of pyrite and pyrrhotite as well as some chalcopyrite and arsenopyrite throughout all six holes over intervals of 30 to 70 metres…visuals are not always reliable but early indications are positive that Sidon could be on to something at Morogoro…SD is ahead half a penny at 21 cents…the Dominican Republic is rich in mineralization which is why we are so bullish on GoldQuest Mining (GQC, TSX-V) and Everton Resources (EVR, TSX-V) which both have drill programs in progress there right now…the first one to report assay results in the near future will be Everton which started drilling last fall…both stocks are also looking very positive from a technical point of view as John has outlined the last couple of days…Everton is currently up half a penny at 33 cents while GoldQuest is off 2.5 cents at 33 cents after a nice move to the upside yesterday…the geological case for each of them is powerful…Seafield Resources (SFF, TSX-V) continues to look strong and we have every reason to expect more good news from its Quinchia Project in Colombia…the stock has refused to close below the recent financing price of 50 cents and has been consolidating in a bullish way since early last month when it ran to 77 cents on a spectacular drill result from Miraflores…nine more holes are pending from Miraflores in addition to initial results from a nearby property we’re even more excited about, Dos Quebradas…Seafield is currently off two cents at 54 cents on relatively low volume so far today…Kent Exploration (KEX, TSX-V) is unchanged at 14.5 cents as this company continues to show signs of a strong turnaround after a disappointing 2010…

8:50 am Eastern

John: Yesterday, Goldquest Mining (GQC, TSX-V) gapped up at the open to 33.5 cents from Tuesday’s close of 31.5 cents.   It then climbed to a high of 36 cents before closing at 35.5 cents for a gain of 4 pennies (12.70%) on higher CDNX volume of 308,000 shares.

Looking at the 6-month daily chart we see that GQC started a rally on November 24 and in 4 sessions moved from a low of 25 cents to a high of 37.5 cents.   Since then the price has consolidated in a horizontal trend channel between 32 cents and 40 cents.

During the 5 sessions before yesterday the price hovered around the 32 cent level, the bottom of the horizontal trend channel.  But yesterday the buying pressure and volume increased, causing the price to gap up 2 cents at the open. Trading was orderly during the day which is always a positive sign for a bullish move to continue.  The base at 32 cents provides a strong support level.  Also providing strong support is the SMA(50) moving average at 32.3 cents.

The next major resistance to the price move will be at the 40 cent level (blue horizontal line).

The Fibonacci levels at 61.8% (24 cents), 50% (22 cents) and 38.2% (19 cents) are also exceptionally strong support levels because they coincide with price pivot points.

Volume yesterday was the highest in the last 6 sessions, indicating that buying interest is picking up again.

Looking at the indicators:

The RSI has formed a bullish “W” formation with its base at the 40% level which is ideal to support a powerful move up. The RSI is pointing up at the 53% level, a very bullish situation.

The Slow Stochastics has the %K (black line) crossed up over the %D (red line) below 20%, also very bullish.

The ADX trend indicator shows the +DI (green line) at 26, crossed up over the -DI (red line) at 21 which indicates the trend has turned bullish. The ADX (black line) trend strength indicator is low and turned flat yesterday at 18 –  a new bullish trend has started (weak at the moment).   The primary trend for GQC remains strong.

Outlook: GoldQuest’s healthy technical condition supports the bullish fundamentals of this company.  All indications are that this potential move will continue upwards to challenge the strong resistance level at 40 cents and then carry on to the Fibonacci level of 47 cents on condition the volume continues to increase.  GoldQuest appears ready for another significant move.

Rouyn-Noranda, Quebec, 11:15 am Eastern

Gold has traded in a tight range of $1,376 to $1,388 so far today…as of 11:30 am Eastern, the yellow metal is off $2 at $1,379…Silver is ahead 4 cents at $29.55…the U.S. Dollar Index has declined nearly one-half of a point to 80.36…Gold imports by India, the biggest bullion consumer, likely reached a record last year according to the World Gold Council…purchases jumped to about 800 metric tons, a 44% increase over 2009 when 557 tons were purchased…demand for bullion as an investment in India surged 73% in the year ended September 30 according to World Gold Council data…price no longer appears to be a concern…the trading action in Gold lately has been confusing to some…in situations like this, in particular, we look to our leading and most reliable indicator of the immediate and longer term direction in precious metals prices and that’s the CDNX…the Venture is up again strongly this morning and continues to remain firmly locked in a powerful uptrend…the fact it has out-performed Gold recently as well as the TSX Gold Index is a very bullish sign and tells us that Gold is likely very close to a turnaround and the probability of a drop below key technical support at $1,350 is very remote…over the past year-and-a-half we have consistently used this “indicator” (the CDNX) to make some incredibly accurate market calls that have allowed our readers to make some very astute and timely trades…as of 11:15 am Eastern, the CDNX is 17 points higher at 2283, just a few points below the recent 2+ year closing high of 2288 December 31…GoldQuest Mining (GQC, TSX-V) is showing impressive strength, especially considering the recent acceleration of the warrant expiry date on a financing from last year…nearly 10 million warrants to purchase one share at 20 cents expire January 24…the stock has held up incredibly well (few investors seem to be selling GQC in order to exercise their warrants) which is a very bullish sign…at this point we expect GoldQuest is ready to commence a new uptrend…this is a company with proven projects in the DR (and Spain) that have major upside exploration potential…drilling is underway now at GQC’s La Escandalosa Property (formerly Las Tres Palmas) where the company has an excellent opportunity to significantly expand resources…GQC is up 4.5 cents this morning to 36 cents…also in the DR we like Everton Resources (EVR, TSX-V) which is working on its APV Property which is next to one of the world’s largest Gold deposits, Pueblo Viejo…John’s chart on EVR this morning shows the stock’s decline from 39.5 cents at the end of November to 29 cents yesterday has likely run its course…EVR is currently off half a penny at 31 cents…here on the Cadillac Trend, we’ve spent the past week doing some intense research and we’ll be reporting on more of that very soon as we tie together a considerable amount of geological information…we’ll also be making a return visit to the area very quickly as we suspect things are going to heat up on several fronts…Gold Bullion Development (GBB, TSX-V) is off two pennies at 81 cents on light volume…Cadillac Mining (CQX, TSX-V), also on light volume, is down 1.5 cents at 39 cents…Adventure Gold (AGE, TSX-V) is unchanged at 47 cents…and Abcourt Mines (ABI, TSX-V), the newest addition to the BMR model portfolio, has declined two pennies to 20 cents…Seafield Resources (SFF, TSX-V) is looking strong, unchanged at 54 cents after a nice upside move yesterday…Richfield Ventures (RVC, TSX-V), which is already up 262% since we introduced it to readers just over a year ago, has released a stellar drill result this morning from its Blackwater Project in central British Columbia…Richfield has intersected 222 metres grading 1.23 g/t Au and 5.5 g/t Ag in hole BW-103 which was collared near the western edge of the Gold Zone, 157 metres southeast of previously announced BW-71 which returned a whopping 281 metres grading 1.40 g/t Au…a second higher grade zone at depth was also discovered in BW-103 (30 metres grading 2.52 g/t Au and 12.3 g/t Ag. from 332 to 362 metres)…three other holes reported this morning (BW-98, BW- 99 and BW-102) returned lower grades and widths and fenced off the western boundary of the Gold zone…exploration drilling in a hole approximately 1500 metres south of the centre of mineralization did not intersect any significant values…results are pending on 13 additional holes…another phase of drilling commences late this month as Richfield continues to define a potential multi-million ounce Gold deposit at Blackwater with silver and copper values as well….the stock climbed as high as $4.74 this morning but has since pulled back to $4.44, an 8-cent increase for the day, with the news pretty much meeting the market’s expectations…Currie Rose Resources (CUI, TSX-V) is showing technical signs of bottoming out just below its 100-day moving average (SMA) after news came out Monday…CUI is currently off a penny at 21 cents…volume has been impressive the last few days as bargain hunters have stepped in….Kent Exploration (KEX, TSX-V) is looking very healthy from a technical standpoint and the fundamentals with this situation have improved substantially recently…Kent climbed 1.5 cents yesterday and is currently at 14.5 cents, even for the day and above its 200-day moving average (SMA) for the first time since last fall…

Everton Resources (EVR, TSX-V) is a company we’ve been mentioning occasionally in recent months and readers may recall an interview we did with President and CEO Andre Audet November 26. Everton has pulled back slightly since then and yesterday closed at 31.5 cents as it successfully tested its rising 100-day moving average.

Everton’s focus is on its large property holdings in the Dominican Republic where aggressive drilling continues.  This is clearly a situation that should be watched closely and we encourage investors to do as much due diligence on EVR as possible (there is news out as EVR this morning as well regarding its partner’s plans to spend $3.6 million on exploration at the company’s Opinaca-Wildcat Property in the James Bay area near Goldcorp’s Eleonore Project).  The EVR chart looks attractive as John explains below:

John: Yesterday, Everton Resources (EVR,TSX-V) opened at 29.5 cents and dropped as low as 29 cents before climbing and closing at its high of 31.5 cents for a gain of half a penny on low CDNX volume of just 88,000 shares.

Looking at the 6-month daily chart we see that on November 8 the price broke to the upside from a month-long horizontal trend channel between 26 cents and 28 cents.   This started a climb to 34 cents from where in 3 sessions it declined to a low of 28.5 cents, only to renew its move to the upside to a high of 39.5 cents on Nov. 29 on an exhaustion volume of nearly 1.3 million shares. At that point a top consolidation horizontal trend channel formed between the 34 and 39 cent levels for 17 sessions. This was validated by declining average daily volume.  On Nov. 23 the price broke to the downside and proceeded to decline to yesterday’s low of 29 cents.

There are two sets of Fibonacci levels shown.   The blue set shows the span of the seed wave from 25 cents to 33 cents and the first extrapolated target at the 161.8% level was at 38 cents.   Note that this was equal to the highest close value.

The green set with 0% at 25 cents and 100% at 38 cents shows the next target level is 46 cents (this is not a BMR price target as we don’t give price targets but a theoretical Fibonacci level based on technical analysis).   Also note that the low of 29 cents yesterday coincides with the 50% level of the blue set,  thus we can count on 29 cents being a very strong support level.

The trading during the last 3 days is a bullish “engulfing” pattern.  This is a very strong bullish reversal pattern and could signal a reversal of the price decline.  However, volume must increase to confirm this reversal.

Also shown are 2 important moving averages, the EMA(20) and the SMA(100). The EMA-20 (green line) provides close support during extended upside moves as shown between Nov. 8 and December 20.  When the EMA-20 begins to decline, or when the price should close below this moving average, a stock will typically come under pressure.  The SMA-100 (purple line) provides support of a different kind. It provided close support for the horizontal trend channel from October 13 to Nov. 8 and again it’s providing close support as the stock bounced off this level yesterday.

Looking at the Indicators: The RSI is low and pointing up at the 42% level.   Considering yesterday’s bullish candle, this is a very positive sign.

The Slow Stochastics has formed a very bullish “W” formation with the %K (black line) pointing up and has crossed above the %D (red line) at 12% – very bullish.

The Chaikin Money Flow (CMF) indicator is at zero, showing there is neither buying or selling pressure of any significance.

Outlook: EVR’s chart patterns and indicators project a very bullish scenario but any significant price increase is going to require a considerable increase in volume (disclosure note – I do not currently hold a position in EVR, Jon does).

Currie Rose Resources (CUI, TSX-V) came out with news yesterday and the stock plunged 31% to close at 23.5 cents.  Combined volume on the CDNX and ALPHA markets was a whopping 23 million shares, so there were obviously some eager buyers to soak up the selling.  The stock has stabilized this morning and as of 12:30 pm Eastern time it’s down 2.5 cents at 21 cents, just very slightly below its rising 100-day moving average (SMA).

Speculators hoping for a “glory hole” from the company’s Sisu River Gold Property in northwest Tanzania were disappointed and fled the scene yesterday.  However, the results were still quite encouraging for a first-pass drill program at this property and a major follow-up campaign will take place beginning in the spring.

Sisu River forms just part of Currie Rose’s 260-square kilometre Mabale Hills Project which holds considerable upside exploration potential (a significant discovery less than 10 kilometres southwest of Sisu River is being followed up on this spring as well).  In addition, Currie Rose is making preparations for a major drill program this spring at its Sekenke Gold Project which is approximately 200 kilometres southeast of Mabale Hills.  Sekenke is an even larger land package and what excites us is that it surrounds and runs in between two former producing high-grade mines including the Sekenke Mine, one of Tanzania’s original Gold mines.  Currie Rose has already identified a very promising structure (12 km by 800 metres) within a shear zone on the margins of a large granite intrusion that hosts numerous quartz reefs of the same type and even larger than those that developed at the nearby historic mines.

Currie Rose has another Gold property as well near Sudbury, Ontario (the “Scadding Property”), where an 8,000 metre drill program is just starting. Trueclaim Exploration (TRM, TSX-V) is the operator and has an option to earn a 51% interest in Scadding. 

There is strong technical support for the stock in the low 20’s which we view as a potentially extremely favorable entry point – the long-term bullish uptrend with Currie Rose remains intact on the charts.

This morning we had a very interesting discussion with Currie Rose President and CEO Harold Smith (simply click on the link below to listen to the 12-minute interview).

Currie Rose Jan. 11 Interview

Note:  The writer and interviewer holds a position in CUI.

Rouyn, Noranda, Quebec, 11:30 am Eastern

Gold got as high as $1,388 this morning but has since backed off somewhat…as of 11:30 am Eastern, the yellow metal is up $3 an ounce at $1,379…Silver is 49 cents higher at $29.58 while the U.S. Dollar Index is ahead slightly at 80.84…the CDNX continues to show technical strength after last week’s pullback…the Index is currently up 24 points at 2256…based on how the CDNX is performing so far in January, given some weakness in Gold, the possibility of Gold dropping below key technical support at $1,350 appears very remote…the uptrend in the CDNX, an extremely reliable leading indicator for the precious metals market, is clearly intact…we are continuing our research on the Cadillac Trend in a significant radius around Rouyn-Noranda with several important meetings today and tomorrow…we’re then returning to the area in the very near future…BMR has added Abcourt Mines (ABI, TSX-V) to its model portfolio…fundamentally and technically, Abcourt looks very promising and could become a producer again by sometime next year…its Elder-Tagami Gold Project just north of Rouyn-Noranda is generating good results with excellent potential to substantially increase 43-101 resources…north of Val d’Or, ABI’s Abcourt-Barvue Silver-Zinc Property contains almost 20 million ounces of silver and nearly 300,000 tonnes of zinc (43-101, all categories, reserves and resources)…a feasibility study by GENIVAR shows robust economics for a mostly open-pit situation at $15 silver, 88 cents zinc and a production rate of 1,800 tonnes per day…the company is currently drilling this property with the goal of upgrading reserves and resources and justifying an increase in the size of the proposed mill from 650,000 tonnes to one million tonnes per year…this would reduce the unit mining costs by treating a larger volume of ore annually, further enhancing the economics of the project…Abcourt appears to be getting much more aggressive in telling its story as it aims to get back into production…Abcourt is currently 1.5 cents higher at 23 cents…Alexis Minerals (AMC, TSX), a large landholder along the Cadillac Trend and hoping to turn its fortunes around, has appointed Francois Perron this morning as its new President and CEO… Perron is also a director with Yorbeau Resources (YRB.A, TSX) which is showing signs of waking up and coming out of its doldrums…bottomfishers may wish to do some fresh due diligence on Yorbeau which is trading around 20 cents…Gold Bullion Development (GBB, TSX-V) is quiet and unchanged at 81 cents…we have more to report on GBB later this week but all is looking good…same with Cadillac Mining (CQX, TSX-V) which has pulled back into an attractive area at 36 cents…Kent Exploration (KEX, TSX-V), which used to be in the BMR model portfolio, is once again looking interesting both technically and fundamentally…the stock is up half a penny this morning at 13.5 cents…Kent has struggled since May last year but is clearly on the rebound…the company has fixed itself up financially and the Archean Star Resources spin-off is very close at hand…the financing on Archean Star has been completed and a listing on the Venture Exchange is imminent…Kent shareholders will receive a “dividend” in the form of one Archean Star share for every four shares held in Kent…drilling is ongoing at Kent’s (Archean’s) Gnaweeda Gold Property in Western Australia with initial assay results from this Phase 2 program expected very soon…last but certainly not least, Currie Rose Resources (CUI, TSX-V) is stabilizing in the low 20’s after drill results were announced yesterday from its Sisu River Gold Property in northwest Tanzania…in our view the market over-reacted to the downside yesterday, pushing CUI 31% lower for the day at 23.5 cents…there were several bits of very encouraging information in the news issued by Currie Rose yesterday which is why we tracked down President and CEO Harold Smith this morning for an interview…that very interesting discussion will be posted shortly on our site…Currie Rose is currently off 1.5 cents to 22 cents, its 100-day rising moving average…