BullMarketRun.ca

Rouyn-Noranda, Quebec, 11:50 am Eastern

Gold is on the rebound after hitting a 6-week low overnight of $1,352, just above solid technical support at $1,350…as of 11:50 am Eastern, the yellow metal is down $1 an ounce at $1,370 after climbing as high as $1,380…Silver, which has demonstrated strong technical support at $28, is off 16 cents at $28.90…the U.S. Dollar Index is up slightly at 81.07…American job growth was less than expected in December (payrolls increased 103,000 vs. the median forecast of 150,000) but the unemployment rate dropped to the lowest level since May, 2009 (9.4%), reflecting gains in jobs and fewer people in the labor force….it’s estimated that payrolls will need to increase at twice the current pace in the U.S. for further progress in lowering the jobless rate and accelerating the economic recovery…the CDNX is strengthening after dropping as low as 2209 this morning…as John pointed out on his chart last night, the weakness we’ve seen in the CDNX over the last few days has been a golden opportunity in our view to scoop up lower priced shares in many quality situations…this has been nothing more than a healthy pullback in a powerful overall uptrend…2209 could be the low in this mini-correction based on today’s action if the intra-day reversal holds…the CDNX is now ahead 4 points at 2221…we spent most of yesterday doing company research which we’ll be reporting on next week…Gold Bullion Development (GBB, TSX-V) is unchanged at 80 cents and has hit a strong support level (50) on the RSI..other technical indicators also suggest GBB is looking very attractive at the moment…we’re expecting an exciting January for Cadillac Mining (CQX, TSX-V) which is currently down half a penny at 40.5 cents…with its potential property acquisitions in the Great Basin, and some very strategic holdings along the Cadillac Trend which we’ll be reviewing in more detail next week, Cadillac is well positioned for an extremely successful 2011…Sidon International (SD, TSX-V) made a nice jump yesterday, climbing 2.5 cents to 21.5 cents on volume of over six million shares…Sidon is looking very healthy technically…the visuals on Sidon’s first hole at Morogoro East were promising, as reported December 7, and since then the company has also picked up land near Canaco’s (CAN, TSX-V) Magambazi discovery at Handeni…Sidon has traded between 21 and 22.5 cents so far today, and is currently unchanged at 21.5 cents…Currie Rose Resources (CUI, TSX-V), which has declined for six consecutive sessions entering today, is showing strong technical support around its rising 50-day moving average at 31 cents…CUI has an impressive portfolio of projects in northwest Tanzania along with the Scadding Gold Property near Sudbury which it has optioned to Trueclaim Exploration (TRM, TSX-V)…CUI is currently at 30 cents, down half a penny…

Some unexpected and very nice Christmas gifts have arrived more than a week late but that’s perfectly okay.  There’s no need to blame Canada Post.  In this case you can actually thank certain investors who have been extremely generous as these gifts take the form of junior resource stocks that are being offered at significantly discounted prices after a 100-point drop in the CDNX since Tuesday.

The CDNX has declined from a high of 2312 Tuesday, the first trading day of the year, to a low of 2212 today- a drop of nearly 5% during a three-day period.   If the CDNX were a grocery store, and prices were slashed 5% across the board, you’d see some very happy customers.  So now is not a time to flinch and get scared – now is the ideal time, as it was in November as well as last summer, to embrace this weakness and load up the basket with some serious bargain-hunting.

John updates the CDNX chart for us and sees many reasons to view this pullback in a very bullish context:

Today the CDNX opened at 2267, its high, then drifted lower during the day to a low of 2212 before closing at 2217 for a loss of 45 points (2.0%) on volume of 410 million shares.

Looking at the 1-month daily chart we see that the Index continued its down move that started 2 days ago from its high of 2312. This is a loss of nearly 100 points in just 3 days, but let us put this in proper perspective. First of all, there was a warning that the Index was temporarily topping out. The CDNX rose on December 29, 30 and 31 but on each consecutive day the volume declined (the increase on the 31st was the 10th consecutive winning session). This is a negative divergence. To sustain any uptrend an increase in volume is required. The volume increased on January 4 but on this day the bears were out in force so this was mainly down volume. It is important to note that the volume during the last 3 days (down days) has been pre-holiday average and constant, showing clearly that this is a correction and not a sell-off.

So, why a correction at this time you may ask?   Well, this can be explained by looking at the RSI which was overbought and peaked on Dec 31, and by the very high value of the +DI of the ADX trend indicator. The last move up by the CDNX started on December 16 and lasted for 10 full sessions and took the Index from around 2100 to 2312.

The Fibonacci levels (blue) show that the retracement support levels are at 2203 (50%) and 2178 (61.8%) with the latter being particularly strong.

Looking at the indicators:

The RSI is unwinding from its overbought situation and is approaching a previous support level (orange horizontal line) which is between 55% and 60%.

The Chaikin Money Flow (CMF) indicator shows buying support has decreased during the last 3 days.  Buyers are sitting back and accumulating cheap shares of sound companies.

The ADX trend indicator shows that the +DI (green line) had reached an unsustainable level of above 60 and is now down to the 49 level. The ADX (black line) trend strength indicator is steady and high at 50, showing the uptrend is still strong. The +DI, -DI and ADX lines are in bullish orientation.

Outlook: This minor correction is not expected to fall below the 2178 Fibonacci support level shown on the chart.

Rouyn-Noranda, Quebec, 11:30 am Eastern

Greetings again from Rouyn-Noranda (population 40,000) in northwestern Quebec where we’re beginning a week of special research around the prolific Cadillac Trend…this is the first of two visits we’re making to this part of the Abitibi Greenstone Belt early in the New Year with this initial visit being more research-oriented…75 kilometres to the west of us is Kirkland Lake, another famous area built on Gold…approximately the same distance to the east is Canada’s largest Gold deposit, Osisko’s (OSK, TSX) Canadian Malartic with over 10 million ounces…and of course five kilometres to the south of Rouyn-Noranda is Gold Bullion Development’s (GBB, TSX-V) Granada Gold Property which has been stirring up new excitement in the surrounding area…with Gold near all-time record highs and fresh discoveries being made, the exploration and mining boom we’re seeing in this region right now is not unlike the excitement nearly a century ago…in the 1920’s, the discovery of massive copper and Gold ore bodies triggered an incredible prospecting rush with a subsequent mining boom throughout the Abitibi region…between 1927 and 1950, 46 mines went into production along the Cadillac Trend (including Granada) and in the 1950’s, over 10,000 workers held mining-related jobs…it’s estimated the 200-odd mines that have gone into operation in northwestern Quebec since the mid-20’s have produced some 5.6 million tons of copper, 6.2 million tons of zinc, 1,860 tons of Gold and 5,500 tons of silver…the Cadillac Trend is one of the hottest addresses in the world right now for exploration and mining which is why we’re here…from an investment standpoint, there are still many potential home run opportunities and we’ll be reporting on some of them…Gold is soft again this morning for the third consecutive day…it has traded in a range of $1,364 to $1,381 so far today…as of 11:30 am Eastern, the yellow metal is off $6 an ounce at $1,373…Silver is down 18 cents at $29.08 while the U.S. Dollar Index is ahead over one-half a point at 80.79…some technical analysts have pointed out that Gold seems to have formed a bearish head and shoulders reversal pattern…that view however is not supported by our #1 leading indicator which is the CDNX…the Venture Exchange remains in a strong uptrend and while it has declined the first three trading days of the year, the drop has been very modest and not disproportionate to the move in Gold…the CDNX is currently off 26 points at 2236, just slightly below its rising 10-day moving average (SMA)…the 20-day SMA at 2190 provides very strong secondary support…the winning strategy with the CDNX in our view continues to be to embrace any weakness…the trend so far in January with the CDNX is opposite to that of the last three January’s which is probably a good sign…last year, the CDNX rose each of the first 6 days of the New Year and then experienced an 8% January correction…in 2009, the CDNX climbed the first three days before correcting 8% that month; and in 2008 the Index went higher the first two days of January before a short-lasting but nasty correction of nearly 20% set in…Gold Bullion is off 2 pennies at 80 cents…as long as the drills are turning at Granada, which they are, we’re happy…as many holes over as broad an area as possible should be the strategy for the LONG Bars Zone and that definitely appears to be the Basa and GENIVAR game plan…Granada is going to be all about volume…Cadillac Mining (CQX, TSX-V) is down 3.5 cents to 41 cents…CQX has been a star performer since we uncovered this gem early last month, climbing from the low 20’s to 50 cents…of course we’ll be covering CQX extensively in the coming days and weeks as there’s a lot happening with this company…we’re watching for news soon from Richmont Mines (RIC, TSX) which has been getting excellent results from its drill program at the Wasamac Property, 15 kilometres west of Rouyn-Noranda…Cadillac holds a 100% interest in strategic claims that adjoin Richmont’s Wasamac Property…what’s also interesting is that Cadillac holds most of the mining titles to the south (and some to the west) of Vantex’s (VAX, TSX-V) Galloway Project which is now getting a lot more interest after it was announced December 30 that Robert McEwen has accumulated a significant position in the company…Vantex is up 2 more cents this morning at 53 cents…it has more than doubled in value since December 29, just before the McEwen announcement was made…the fact McEwen has taken a position in Vantex is bullish in our view for all the players in the area including Cadillac which recently partnered with Visible Gold (VGD, TSX-V) to kick-start the exploration development of over 7,000 hectares it holds in the general area including a large block of claims immediately to the south of the Galloway Project…Currie Rose Resources (CUI, TSX-V) made a bullish intra-day reversal yesterday, dropping as low as 29 cents and closing at 32 cents…it’s unchanged this morning at 32 cents…a rising 50-day moving average at 31 cents is providing strong technical support for Currie Rose…Greencastle Resources (VGN, TSX-V) is off 3 pennies at 29.5 cents, just below its 50-day moving average at 30 cents, while GoldQuest (GQC, TSX-V) has dropped very slightly below its 50-day at 31.5 cents…Sidon International (SD, TSX-V) continues to look solid, up half a penny at 19.5 cents…

A view yesterday afternoon from across frozen Lake Osisko of part of Xstrata's very large Horne Copper Smelter, now treating more and more electronic recycling, with the convenience of an adjacent rail line. This is the same location as the original Horne Copper and Gold Mine that formed the foundation for Noranda Mines and built the twin towns of Rouyn and Noranda.

Rouyn-Noranda, Quebec, 1:45 pm Eastern

Greetings from the famous Canadian mining community of Rouyn-Noranda in northwestern Quebec where we landed just two-and-a-half hours ago…we’ll be in the area researching various situations over the next week…after yesterday’s $34 drop, Gold fell by as much as another $18 this morning before bargain-hunters jumped in…as of 1:45 pm Eastern, the yellow metal has recovered about half of its losses and is currently down $8 an ounce at $1,373…Silver is off 57 cents at $29.23 while the U.S. Dollar Index has jumped more than three-quarters of a point to 80.18…the CDNX, which dropped as low as 2244 this morning, has trimmed its losses and is currently down 18 points at 2257…the fact the CDNX has held up so well in the face of a $52 plunge in the price of Gold over two days clearly demonstrates the underlying strength of the Venture Exchange and strongly suggests that all we’re seeing in Gold right now is a normal minor correction…after 10 consecutive winning sessions, a pullback of a few percentage points in the CDNX is also a healthy development…the Index nearly touched its 10-day moving average (SMA) this morning which has consistently provided strong technical support since late July with the exception of a brief period in November…Gold Bullion Development (GBB, TSX-V) found technical support in the upper 70’s, as expected, and is currently up 3 pennies from yesterday at 81 cents…Cadillac Mining (CQX, TSX-V) has pulled back slightly after a powerful move yesterday…CQX is off 3 pennies at 44 cents…Adventure Gold (AGE, TSX-V) is 2 cents higher at 48 cents…all three companies will be in the spotlight during our visit to Rouyn-Noranda in addition to other situations we’re examining…it’s a hot-bed of exploration activity out here in what is undeniably one of the most exciting and prolific areas of the world to explore for Gold…we’re also investigating some silver opportunities…Seafield Resources (SFF, TSX-V), waiting for CDNX approval of its recently closed $15 million financing, fell briefly below 50 cents this morning (49.5 cents) and is currently down 2 pennies at 51 cents…we still very much like the trading action in Seafield over the last few weeks and we expect bargain hunters will eagerly soak up any stock that comes available (if it does) in the 40’s…a drop below the 50-cent financing price seems unlikely, however…strong technical support exists in the low 30’s for GoldQuest Mining (GQC, TSX-V), Greencastle Resources (VGN, TSX-V) and Currie Rose Resources (CUI, TSX-V)…Richfield Ventures (RVC, TSX-V) has nicely unwound an overbought condition that arose in late November and is very close to 50 on the RSI where it has rallied from significantly before…at $4.48, RVC is also strongly supported by a rising 50-day SMA (currently at $4.10) which it has not dropped below since late July…

Over the past few weeks we’ve outlined the bullish fundamentals that are driving Cadillac Mining (CQX, TSX-V) which today surged to a new 52-week high of 50 cents.  During our upcoming visit to Rouyn-Noranda in northwestern Quebec, we’ll be reviewing those fundamentals in more detail in addition of course to covering Gold Bullion Development (GBB, TSX-V) and other interesting opportunities along the infamous Cadillac Trend.   Tonight, John takes a look at the near-term technical outlook for Cadillac Mining:

John: Today, Cadillac Mining opened at 41 cents, hit a low of 40 cents and then moved to a new 52-week high of 50 cents before settling back and closing at 47 cents for a gain of 5.5 cents (13.25%) on CDNX volume of 540,000 shares. This was a particularly strong move considering the price of Gold tumbled $34 to close at $1381 and the CDNX fell for the first time in 11 sessions.

Looking at the 3-month daily chart we see that the “flagpole” started on November 25, 2010, and CQX proceeded to climb in price with increasing average daily volume until a peak of 45.5 cents was reached on December 17.  For the following 8 sessions the price consolidated in a pennant pattern with decreasing average daily volume until today when we saw a breakout to 50 cents with the volume increasing to 540,000 shares.

The close supporting EMA-20 (blue line) is at 34 cents.  The blue Fibonacci set shows the “seed” wave spanning from 6 cents to 25 cents with the first Fibonacci target of 37 cents.   This closely agrees with the base support level of the pennant. The green Fibonacci set shows the next immediate Fibonacci target level (there are higher levels as shown in our pre-Christmas update) is 55 cents (this is not a BMR price target as we don’t give price targets but merely a theoretical Fibonacci level based on technical analysis).

Looking at the indicators:

The RSI, while still overbought at 81%, still has room to move up to the previous overbought level of 92% – bullish.

The Slow Stochastics has the %K (black line) above the %D (red line) at 78% and 75%, respectively, and has plenty of room to move higher without becoming extreme – bullish.

The ADX trend indicator has the +DI (green line) pointing up at 43 and above the -DI (red line) at 13.  The ADX trend strength (black line) indicator is high and steady at 55.  All indicators are in bullish orientation.

Outlook: Cadillac showed impressive new strength today and appears to be entrenched in a firm uptrend.

Note: The writer holds a position in Cadillac Mining.

Wednesday’s BMR Morning Musings will be posted later than normal, due to travel, with an approximate posting time of 2:00 pm Eastern (11:00 am Pacific).

Welcome to our site, or at least the initial version of it!  BMR has been online for over a year now and strictly through word-of-mouth we have built a large and loyal following.  It helps when your model portfolio is up over 200%!

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.    An important component of this site will always be 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. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely in order to make it work for us.  If it’s the other way around –  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly –  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com is completely independent from any companies it covers.  BMR accepts no compensation of any kind from the companies we cover in return for that coverage.   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 adviser, 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.

Gold is getting hit hard today by profit taking…as of 8:35 am Pacific, the yellow metal is off $30 an ounce at $1,385…Silver has declined 74 cents to $29.93 while the U.S. Dollar Index is up nearly one-quarter of a point at 79.39…the CDNX is taking this in stride, however, which tells us the decline in Gold today is nothing to fear…Gold has also not yet suffered any serious chart damage…the largest single-day moves in Gold throughout this bull market have actually been to the downside and they have consistently presented great buying opportunities…the CDNX got as high as 2312 this morning but has since pulled back…it’s now down 3 points for the day at 2285, jeopardizing a 10-session winning streak…we arrive late tomorrow morning in Rouyn-Noranda to begin a week of research and reporting from one of the world’s most prolific Gold producing regions (due to travel, BMR Morning Musings tomorrow will not be posted until approximately 1:30 pm eastern time)…of course there’s a lot of activity along the Cadillac Trend at the moment and we’ll do our best to present the “big picture” and highlight some of the most interesting opportunities…Gold Bullion Development (GBB, TSX-V) is beginning 2011 with a share price nearly 10 times higher than the first trading day of 2010…GBB is off 2 pennies at 84 cents this morning…we’re looking forward to checking out the Granada Gold Property for the first time since last summer…Cadillac Mining (CQX, TSX-V) and Adventure Gold (AGE, TSX-V) will also be a focus of our attention along with other situations…Cadillac holds over 7,000 hectares west of Rouyn-Noranda, including the strategic “Wasa” claims” which adjoin Richmont Mines‘ (RIC, TSX) Wasamac Property, and the company is also targeting “several” precious metal acquisitions in the Great Basin of the western United States as confirmed in a news release December 30…Cadillac has been trading between 40 and 43.5 cents this morning…in another part of the world, with great interest we continue to closely follow the prospects of Currie Rose Resources (CUI, TSX-V) and Sidon International (SD, TSX-V) in Tanzania…exploration updates from both companies are likely this month…a major drill program is also about to commence at Currie Rose’s Scadding Gold Property near Sudbury…Trueclaim Exploration (TRM, TSX-V) is the operator of that project with an option to earn a 51% interest in Scadding…Currie Rose is down 1.5 cents at 33 cents while Sidon is up half a cent at 19 cents…GoldQuest Mining (GQC, TSX-V) is expected to add nearly $2 million to its treasury this month as the company has accelerated the warrant expiry date from a financing last April…9,465,400 warrants exercisable to purchase one GQC share at 20 cents were still outstanding as of December 24, and the expiry date on those warrants has been moved ahead to January 24…any pressure on the underlying stock over the next couple of weeks as a result of this should be absorbed with little difficulty by the market as the outlook for GoldQuest is so positive for 2011…GQC has an impressive portfolio of properties (advanced and early stage) in the Dominican Republic (drilling has started at its La Escandalosa Project) and a promising zinc-lead-silver deposit (Toral) in northwest Spain…GoldQuest is currently down 2.5 cents to 34 cents…