Gold suddenly turned south this morning after climbing as high as $1,546 an ounce…the only reason we can think of for that is profit-taking…as of 9:05 am Pacific, the yellow metal is off $13 an ounce at $1,526…Silver is down 94 cents at $35.88…crude oil has slipped $1.57 to $98.72 on economic slowdown concerns while weakness continues in the U.S. Dollar Index…it hit a fresh 3-week low this morning and is currently off one-fifth of a point at 74.59…yesterday’s ADP jobs report along with some other weak U.S. economic data drove the Dow down nearly 300 points to its rising 100-day moving average (SMA) yesterday…despite the heavy sell-off in both the Dow (down 2.2%) and the TSX (down 2%), it’s important to point out the CDNX fall was much more muted…it dropped only half as much as the Dow, the TSX and the Nasdaq and we consider that to be significant…for more than two weeks now the CDNX has been outperforming the major markets and even Gold and that is a major change of trend…amid all the doom and gloom right now, it’s a very bullish sign that the world’s most speculative market is behaving as it is after leading the way lower in March…the Dow may not have quite bottomed out yet – it’s off another 80 points this morning – but we’re convinced the CDNX has, and that’s entirely consistent with the CDNX being the very reliable leading indicator it is…coming out of the 2005 correction, which had an almost identical footprint to this year’s CDNX correction, the market initially popped up strongly and then pulled back slightly below its 10-day moving average (SMA)…so far we’re seeing the same thing now with the CDNX…we were asked by a reader this morning to “tone down” our bullishness on the markets because of the problems in Greece (“huge cascading impacts”) and everything else going on in the world…folks, with all due respect to that particular reader (we welcome everyone’s opinion), a major reason a lot of people don’t make the kind of money they would like to make in the markets is because they succumb to their emotions…when everyone is selling, they get scared and sell…when everyone is buying and situations become overbought, they get excited and buy too…this is why technical analysis is so important because it helps to take emotion out of trading and investing – I’m sure John would concur with that…it takes nerves of steel to be bullish when the crowd is bearish but that’s when big profits are born…anyhow, the CDNX is off 13 points at 2054, its 20-day SMA, as of 9:05 am Pacific…the 20-day SMA has flattened out and potentially could reverse to the upside sometime next week which would be another bullish development…the action in the CRB Index also continues to be supportive of our view of a CDNX turnaround…John updates the CRB chart below…
There are no major movers on the CDNX so far today…Gold Bullion Development’s (GBB, TSX-V) 10, 20 and 50-day moving averages are now all in bullish alignment…the stock also appears to be in the process of completing a bullish “cup with handle” formation as John pointed out yesterday…that must occur in order for GBB to break to the upside past resistance at 54 cents…we saw the same sort of formation with Currie Rose Resources (CUI, TSX-V) a while back prior to its recent move…GBB is currently up half a penny at 48 cents…CUI is down a penny at 19 cents…Adventure Gold (AGE, TSX-V) has announced the start of a 5,000 metre Phase 2 program at its Pascalis-Colombiere Gold Property near Val d’Or…the intent of this program is to further define the Gold system, leading to a resource calculation which is already being worked on…AGE released very positive results yesterday from this property which encompasses the past producing L.C. Beliveau mine (Richmont’s Beaufor Mine is just a few kilomeres away)…we found a comment from AGE President and CEO Marco Gagnon in this morning news release quite interesting…”Following positive drill results and the permitting process, an open-pit or an underground operation could be producing in the near future“…earlier this year we met with AGE’s Jules Riopel, VP Exploration, regarding the company’s strong portfolio of properties…he was very keen at that time on Pascalis and given the drill results, his bullishness on this property appears to have been justified…the former L.C. Beliveau Mine was a very profitable operation between 1989 and 1993, producing nearly 170,000 ounces of Gold for Cambior…AGE is ahead 1 penny at the moment at 52 cents…we’ve lost a company in the BMR model portfolio but that’s actually a good thing…Richfield Ventures (RVC, TSX-V) will be trading no more as it has been swallowed up by New Gold Inc. (NGD, TSX)…we introduced RVC to our readers in December, 2009, when it was trading at $1.20…its last trade Monday was $9.03…we will be keeping a close eye on NGD as we believe this producer has terrific prospects…the Blackwater deposit should be a nice fit for NGD…the company already has an established presence in central British Columbia through the continuing development of its New Afton Project which remains on budget and on time for a mid-2012 production start…meanwhile, numerous exploration companies are focusing on the Blackwater area and we’ll be reporting on them in the weeks and months to come…Richmont Mines (RIC, TSX) has touched its supporting 50-day SMA this morning…given how Richmont has performed this year, that could be a sign the markets are close to reversing again to the upside…
