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After an impressive move yesterday that has opened the door to a near-term challenge of the $1,800 resistance area, Gold is up another $7 an ounce at $1,783 as of 6:00 am Pacific…Silver is 63 cents higher at $34.89…Copper is off a penny at $3.81…Crude Oil is up 43 cents at $106.71 while the U.S. Dollar Index has fallen one-quarter of a point to 78.95…

Stock index futures as of 6:00 am Pacific are pointing toward a positive open on Wall Street this morning…China’s Shanghai Composite Index is now above the 2400 level for the first time since last fall…it gained 6 points overnight to close at 2410…as we illustrated last month, there has been quite a close correlation in recent years between the speculative Chinese market and the Venture Exchange…we noticed a potential change in trend with the Shanghai Composite last month and that’s indeed what has occurred as the technicals have turned bullish…all the stars are lining up nicely for the CDNX…

China’s central bank has come out with a landmark report that outlines the path to a critical reform for the economy including an acceleration in the loosening of capital controls…foreigners would be given far greater access to the Chinese stock and bond markets within a decade under a three-phase plan to liberalise investment flows into and out of the country…the central bank said the plan would also allow Chinese companies to take advantage of a “strategic opportunity” to buy cheap foreign assets and help transform the renminbi into an important international currency…

Venture Closes In On 1700

Volumes are picking up and the Venture Exchange will be gunning for its sixth consecutive daily advance today…for the last two sessions the Index has closed above its November high of 1675…after falling to an intra-day low of 1671 yesterday, the CDNX reversed and closed up 6 points at 1685 as Gold moved higher…Nevada is certainly heating up…Gold Standard Ventures (GV, TSX-V) jumped 66 cents yesterday and was the sixth most active CDNX stock, trading just under 6 million shares, after releasing drill results from its Railroad Project on the Carlin Trend…RR-11-16 intersected what appears to be a flat-lying mineralized zone from 169.2 to 225.6 metres (56.4 metres grading 4.26 g/t Au)…drilling of that hole and two other holes to the east continues…this story appears to have a lot of legs to it, so GV should remain very active…another situation we like at the moment in Nevada is Corvus Gold (KOR, TSX) which closed yesterday at 80 cents…

Cascadero Copper (CCD, TSX-V)

One of the keys, of course, to making big money in the speculative junior resource market is finding a company like Gold Standard before it reports a significant discovery…that search is never easy but we believe we’ve uncovered another potential gem in Cascadero Copper (CCD, TSX-V) which is very active with large-scale projects in Argentina, British Columbia and Ontario…the stock closed yesterday at 18 cents for a market cap of $22 million…there’s a lot going on with CCD, as you’ll notice when you visit the company’s web site as part of your due diligence, but this morning we want to briefly touch on what we believe investors have overlooked with CCD which is not one but three very promising porphyry systems within a short distance of each other in northwest Argentina, home to some of the largest porphyry deposits in the world…first, let’s take a quick look at the Cascadero chart which shows this stock is starting to stir after trading in a horizontal channel for the last two-and-a-half years…given Cascadero’s fundamentals, and our bullish outlook for the overall market, the likelihood of CCD busting through this horizontal channel over the short-term appears very realistic…where it could go from there is anyone’s guess, but Gold Standard and Cadillac Mining (CQX, TSX-V) have shown this week what can happen in this bullish new environment when a company reports a very good drill result…

Note: Jon holds a position in CCD (John and Terry do not).

Earlier this month, Cascadero completed a $1.5 million over-subscribed private placement…in early January, the company bolstered its already strong board of directors by adding Brian Causey of Hunter Dickinson…

So what is the potential short-term “trigger event” for Cascadero?…the company’s major focus at the moment is on its huge land package in Argentina…Cascadero is in “elephant” country and has the potential to be the next Lumina Copper (LCC, TSX-V)…CCD’s property portfolio there consists of more than a dozen projects covering 226,000 hectares or nearly 900 square miles…what really has us excited is what the company is doing in the rich Pancho Arias mineral district…using a hockey analogy, CCD could be on the verge of a “hat trick” with its Pancho Arias, Las Burras and Incahuasi properties (along a 19 km stretch) as each has large tonnage potential (Copper, Gold and Moly) based on existing drill data (Pancho Arias and Las Burras) and geophysics (Incahuasi)…a 2012 drill program is expected to begin soon…if you’re looking for “blue sky”, there’s plenty of it with CCD just based on the PALBI Porphyry Potential (our acronym for Pancho Arias, Las Burras and Incahuasi)…for some fascinating geological details on these properties, we suggest as part of your due diligence that you check out the corporation presentation President and CEO Bill McWilliam has put together under the “Investors” section on the company’s web site…2012 is Cascadero’s best chance ever for a major breakout, so it’s a situation we’re going to follow closely in the weeks and months ahead…

Abcourt Mines (ABI, TSX-V)

Abcourt (ABI, TSX-V) continues to strengthen and closed yesterday at 15.5 cents…the company expects to have an updated resource estimate for its Elder-Tagami Gold Project near Rouyn-Noranda by the end of March followed by a Preliminary Economic Assessment…we expect very good news on the updated 43-101 resource estimate given the fact the company has completed nearly 20,000 metres of successful drilling at Elder-Tagami since the last estimate in 2009…the past producing Elder Mine is currently being dewatered…meanwhile, the company’s other major asset is its Abcourt-Barvue Silver-Zinc deposit near Val-d’Or where drilling has also been successful…Abcourt may need a fresh face at the helm to truly unlock shareholder value but there’s no denying the quality of the company’s assets…this has the potential of being a very good year for Abcourt, especially if Silver and Gold continue to climb…below is John’s updated chart…some patience will be required, however, as the stock deals with a resistance band between 16 and 18 cents…

Note: John, Jon and Terry do not hold positions in ABI.

Adventure Gold (AGE, TSX-V)

Adventure Gold (AGE, TSX-V) is heating up as a 15,000 metre drill program is now underway at the company’s very promising Pascalis-Colombiere Gold Property near Val-d’Or…AGE has outlined a Gold trend at Pascalis over at least a three-kilometre strike and up to 900 metres depth and 500 metres wide…immediately adjacent to Pascalis is Richmont’s (RIC, TSX) Beaufor Mine which is just one reason we’re so bullish on Adventure Gold – Pascalis could turn out to be a very strategic fit for Richmont and that raises the possibility of AGE getting taken over…Pascalis is definitely on Richmont’s radar screen…we visited Pascalis last summer and we have some more pictures to share with our readers tomorrow, but for now John gives us his own picture of a very bullish-looking AGE chart…the stock gained another penny yesterday to close at 47 cents…

Note: John, Jon and Terry do not hold positions in AGE.

Gold has traded in a range between $1,748 and $1,761 so far today…as of 5:50 am Pacific, the yellow metal is down $8 an ounce at $1,752…Silver is 32 cents lower at $34.03…Copper is off 4 pennies at $3.79…Crude Oil has backed off 47 cents to $105.78 while the U.S. Dollar Index is up one-quarter of a point to 79.29…

Stock index futures as of 5:50 am Pacific suggest a slightly negative open on Wall Street this morning…China’s manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro zone debt crisis, the HSBC flash purchasing managers index showed this morning…nonetheless, the PMI – the earliest indicator of China’s industrial activity – rose to a four-month-high at 49.7 in February from 48.8 in January…the PMI has been below 50, which separates expansion from contraction, for most of the last eight months…

Fitch ratings agency this morning slashed its rating for Greek sovereign debt to “C” from “CCC,” indicating that default is “highly likely in the near term”…not exactly a surprising statement…

The TSX Venture Exchange enjoyed another robust day yesterday, gaining 21 points to close at 1679…the Index appears poised to bust through a resistance band…once that happens – and we’re certain it will – interest in this market should pick up significantly…below is John’s latest CDNX chart…

Additional evidence that the Venture Exchange is about to explode to the upside comes from analyzing the CRB Index…commodities are looking VERY bullish…

Cadillac’s Surge Confirms The Bullish Market View

One of our old favorites, Cadillac Mining (CQX, TSX-V), enjoyed a spectacular day on drill results out of Utah which really underlines how market sentiment has changed over the last two months…what Cadillac’s jump yesterday should confirm to naysayers is that indeed this market is in another major bull phase…we’ve written about Cadillac’s Goldstrike Project on several occasions over the past year and it does have excellent potential…CEO Victor Erickson and director and geologist Andre Audet worked very hard and skillfully at putting that package together – they tied up an entire former Gold and Silver mining camp – and they have to be commended for that…what they need to do now is capitalize on this opportunity, build momentum and “seize the moment”…this market side of the equation has been Cadillac’s weakness and hopefully this time management will do things right…in this business, execution on the ground is critical but so too is execution in the market…Cadillac needs to raise money with the right people in the right way and at the right price, and keep the momentum going with its Goldstrike Project…

Rainbow Resources (RBW, TSX-V)

A company that is doing well on all fronts is Rainbow Resources (RBW, TSX-V) which hit a new all-time high yesterday (27 cents) on record volume for the stock, just over 800,000 shares…Rainbow recently concluded a $1.1 million financing on almost entirely “hard” dollars, and the company is expected to provide a comprehensive report on its promising West Kootenay “Big Strike” Project in the very near future…just a guess on our part, but we think the odds are good the company will be coming out with news before PDAC…a company’s stock chart is a picture that tells a thousand words…below is John’s updated TA on RBW which closed yesterday at 26.5 cents…the short-term Fibonacci level John has calculated is 37 cents (that’s not a price target, just a theoretical level based on technical analysis and an understanding of the science of Fibonacci)…

Note: John and Jon hold positions in Rainbow Resources with Jon adding to his position again yesterday (Terry does not hold a position).

Arian Silver (AGQ, TSX-V)

We introduced AGQ to our readers about a month ago when it was trading in the mid-to-upper 20’s, and yesterday it broke out to close at 43.5 cents on the best volume since January 19…Arian is a small but growing Silver producer with its flagship San Jose Project in Mexico which still holds strong upside exploration potential…given our bullish outlook for Silver, Arian could do extremely well in the year ahead…below is John’s updated chart on AGQ…

Note: John holds a position in AGQ (Jon and Terry do not).

Adventure Gold (AGE, TSX-V)

Adventure Gold remains one of our favorites and its chart has turned very bullish…the company has started a 15,000 metre drill program at its Pascalis-Colombiere Gold Property near Val-d’Or, a property that encompasses the former producing L.C. Beliveau Mine…drilling and other exploration work up to this point clearly demonstrates that the Pascalis Gold system extends significantly to the north, the south and the west of the former Beliveau Mine…Richmont Mines (RIC, TSX) operates the adjacent Beaufor Mine and is keeping a close eye on results from Pascalis which would appear to be a possible “natural fit” for Richmont…Adventure is well-managed and has an outstanding geological team, so we truly believe this will be a breakout year for the stock…AGE jumped 4 pennies yesterday to close at 46 cents…

Abcourt Mines (ABI, TSX-V)

Abcourt is a company we started following over a year ago and we continue to like its potential given the quality of its Elder-Tagami Gold Property near Rouyn-Noranda and its very prospective Abcourt-Barvue Silver-Zinc Property near Val-d’Or…Abcourt perked up last week on some very nice Silver and Zinc assays…we’ll have more on ABI including a chart from John in the next couple of days…

Gold is firmer this morning…as of 5:30 am Pacific, the yellow metal is up $13 an ounce at $1,747…Silver has gained 26 cents to $33.87…Copper is up 4 pennies to $3.78…Crude Oil continues to surge, adding $1.35 a barrel to $104.59 while the U.S. Dollar Index is flat at 79.11…

The euro zone has once again successfully kicked the Greece debt can down farther down the road…euro zone finance ministers sealed a 130 billion euro ($172 billion) deal for Greece early today to avert a chaotic default next month after persuading private bondholders to take greater losses and Athens to commit to deep cuts…how Greece addresses its growth deficit, however, remains to be seen…ultimately Greece will cave in and default but right now it’s not an issue to lose any sleep over…central banks are printing money faster than rabbits can make bunnies, so as investors that’s all we need to know…Gold is going higher and so are the markets in general…

Keep focused on the big picture…the recent growth in global money supply is very bullish for the markets…the euro zone, U.S. and Chinese economies will fare better than most were fearing last year…and the European Central Bank’s long-term refinancing operations (LTRO), which flooded the markets with $644 billion in cheap cash last December, marked a turning point in propping up the region’s battered banks and improved liquidity tremendously…it was a liquidity crunch in Europe last fall that temporarily drove Gold lower…

Have you ever heard of the Office of the Extractive Sector Corporate Social Responsibility Counsellor?…that’s indeed a mouthful, and at first glance one might think it’s a government department in Ecuador or in some other left-wing, screwed-up regime…in reality, it’s a federal agency created by the Stephen Harper Conservatives to mediate complaints about Canadian mining operations abroad…it has spent more than $1.1 million in the past two years but has yet to mediate anything, another classic example of Big Government failure and waste of hard-earned taxpayers’ money…the CBC (another waste), to its credit, has uncovered the boondoggle of the Office of the Extractive Sector Corporate Social Responsibility Counsellor (good grief) in a report the other day…the agency has racked of hundreds of thousands of dollars in travel, entertainment, training, meetings, reports and other expenses according to documents obtained by the CBC…its senior official, Marketa Evans, has been flying around the world to conferences, roundtables, workshops and other meetings – in all, 47 trips to Africa, South America, Washington and cities across Canada…she earns up to $170,000 a year…what the agency hasn’t done is mediate a single complaint against a Canadian mining company…the fact this information was uncovered by the CBC is definitely ironic in that the CBC is the embodiment of all that’s wrong with Canada – a taxpayer-subsidized ($1.1 billion a year) state broadcaster with a sense of entitlement and a liberal agenda and created out of a national inferiority complex…a stronger, more confident Canada in the 21st century doesn’t need the money-sucking CBC any more than it needs an Office of the Extractive Sector Corporate Social Responsibility Counsellor…

Today’s Markets

Stock index futures are pointing toward a positive open on Wall Street…with just seven more trading days remaining this month, including today, we are anticipating a breakout in the Venture Exchange through the 1675 resistance area prior to the beginning of March…that will set the table for an explosive move up to at least the 1800 area (the 500-day moving average) where the CDNX will meet some temporary resistance…in fact, after busting through 1675, all it would take is a 19.4% jump from there for the Index to reach the 2000 level and that’s what could be in the cards next month before a 10% haircut correction…that’s just speculation but it’s a very real possibility given the very bullish CDNX chart…there is still plenty of cash sitting on the sidelines to produce that kind of “reverse capitulation” event…that’s when the naysayers and doubters finally cave in and their fear turns to greed as they throw in the towel and embrace the market as it shoots higher, not wanting to lose out on additional gains…

Silver – New All-Time High In 2012?

The chart for Silver is looking exceptionally bullish which is why we’ve been putting forward a lot of Silver stocks recently (producers and explorers)…John’s 12-year monthly chart below tells the story – look how the SRSI has bottomed out…this is the best time since late 2008 to be long on Silver and Silver stocks…

Base Metals – Barclays Sees Sharp Demand Pick-Up

Barclays Capital says its leading indicators for base metals demand point to a sharp pick-up in demand momentum toward the end of first quarter and into the second quarter this year…this is certainly consistent with our bullish outlook for the Venture Exchange…analysts cite recent purchasing managers indexes in U.S., China and elsewhere…”This does not discount the cyclical slowdown that EM (emerging markets) and the global economy still face for this year, but it probably encourages market participants to look beyond the downturn and should bode well for metals demand,” Barclays stated…”The latest reading of our leading indicators for base metals demand now points to a clear pick-up in demand growth starting in late in the first quarter…our leading indicator experienced a sharp m/m (month-on-month) increase, the sharpest increase since the start of our series in 2005″…

St. Andrew Goldfields

A company worth performing some due diligence on is St. Andrew Goldfields (SAS, TSX), a profitable Gold producer focused on the Timmins mining district…SAS appears to have broken out of a downtrend that started in the second half of 2010 after the stock climbed just above $1.70…SAS gained 25% last week on a sharp increase in volume, closing Friday at 52 cents…the company has 368 million shares outstanding but enjoyed an impressive fourth quarter (net income of 4 cents per share, record production, earnings and cash flow) and expects to produce 90,000 to 100,000 ounces of Gold this year while reducing cash costs per ounce…John’s chart shows the stock has good upside potential from current levels…

Note: John, Jon and Terry do not hold positions in SAS.

Special Notes:

David Coffin, well-known and respected throughout the mining industry, has passed away suddenly. So our deepest condolences to his family, especially his best friend and brother Eric who partnered with him on the very popular HRA Advisory. David often spoke at conferences and his insight, wisdom and knowledge will be greatly missed. Eric will continue with the HRA Advisory, and that’s what David would have wanted.

Stock markets in both Canada (Family Day) and the United States (President’s Day) are closed Monday.

TSX Venture Exchange And Gold

The Venture Exchange continues to perform according to script and now appears set to challenge the 1675 resistance area.  The daily chart was showing an overbought condition in early February with the first major support area being 1625.  Sure enough, after climbing as high as 1674 February 9, the Index fell nearly 50 points or 3% as it hit 1625 exactly last Tuesday.  That helped immensely in unwinding the overbought condition, and now the CDNX is well-positioned for a potential fresh breakout as John’s chart outlines.  Volume must continue to increase.

Of major significance is the fact the Venture Exchange’s 100-day moving average (SMA) is now reversing to the upside.  If history is any indicator, this is an extremely bullish development and the bears are advised to run for cover.  Their control over this market since March of last year, as we have been stating for several weeks, has ended.  Commodities are looking strong and the growth in global money supply will continue to be a major factor in fueling this bull run.

For the week, the Venture was up 4 points as it closed at 1658.  There are still many scared retail investors sitting on the sidelines, wasting their time watching CNN and worrying about Greece and the euro zone and everything else the mainstream media is trying to frighten people about.  The ground underneath them has shifted but they don’t know it yet.  These investors will be the ones joining the party late in a “reverse capitulation” and when they do, it’ll be time to take profits.  Thank you very much.

Gold

Gold continues to give very encouraging signs with the price holding in the low $1,700’s while the recent overbought condition has unwound significantly.  The yellow metal closed Friday almost unchanged from the previous week, resting at solid support around $1,725.

Demand for Gold hit an all-time high in 2011 as European, Indian and Chinese demand soared according to the World Gold Council’s just-released annual report.  In Europe, Germany and Switzerland were the main drivers of the growth as the euro zone debt crisis escalated and investors looked for safe havens.

While the jewelry market was resilient, the Gold investment market grew more with a 5% increase in annual demand.  Total demand around the world rose to 4,067 tonnes, worth around $206 billion – the first time annual demand for Gold has risen above $200 billion.

India is still the country where most Gold is sold, despite the recent weakness of the rupee, with around 500 metric tons of Gold jewelry sold in 2012 and total demand of 933 metric tons.

There was a hefty increase in Chinese demand which led the WGC to predict that China is emerging as the world’s biggest buyer of Gold.  Check out the chart below – China’s growing appetite for Gold is a trend that is likely still in its early stages.

Central banks also hiked their purchases from 77 metric tons in 2010 to 440 metric tons in 2011 as worries about a second global recession grew.

Silver fell 31 cents for the week to close at $33.59.  Copper lost 11 cents to $3.72.  Crude Oil, on concerns about Iran, jumped $4.57 a barrel to $103.24 while the U.S. Dollar Index gained more than one-third of a point to 79.39.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, is having a huge impact on Gold.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates that won’t end anytime soon (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), money supply growth, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  It’s hard to imagine Gold not performing well in this environment.  The Middle East is being turned on its head and that could ultimately have major positive consequences for Gold.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than two years and strictly through word-of-mouth we have built a loyal following. 

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.  While we focus very much on the Gold market and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on undiscovered junior exploration companies or small producers, 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.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. Always perform your own due diligence and please read our disclaimer at the bottom.

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.  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 (BMR) 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 and entertainment 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 Advisers. 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 Adviser 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.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Gold is steady this morning…as of 5:55 am Pacific, the yellow metal is up $5 an ounce at $1,734…Silver is 7 cents higher at $33.59…Copper is down a penny to $3.79…Crude Oil is up another 46 cents to $102.77 while the U.S. Dollar Index is off marginally at 79.26…

Stock index futures as of 5:55 am Pacific are pointing toward a positive open on Wall Street…

Well-known investor Jim Rogers, CEO and Chairman of Rogers Holdings, gave some good advice on CNBC this morning…“If you listen to governments, then you are not going to make a lot of money…governments lie, distort and make mistakes…in 2012, we have elections and many governments pumping money into the economy, spending and printing money…it’s 2013-14 we have to worry about…my way of playing this is to own real assets like commodities”…

CDNX Surge In The Works?

The recent acceleration in global money supply is one of the driving forces in the markets right now, and that trend is likely to continue through much – if not all – of this year…in this kind of environment the Venture Exchange will always perform well…the CDNX chart took a dramatic turn in January and we believe it’s currently gearing up for another major move that will soon take it through resistance at 1675…it’s time, therefore, to lock in positions on the best quality plays and ride the coming wave…

On Tuesday the CDNX touched our initial downside target level of 1625, and yesterday it closed up 15 points at 1648…it seems increasingly likely that 1625 will hold as support…if it doesn’t, then 1565-1575 would appear to be the worst-case scenario…the bottom line is that the CDNX chart is showing a lot more upside potential than downside risk at the moment, so that’s why it’s important to be positioned properly at this strategic time…March has a chance to be a spectacular month with big volume finally coming back as well…only time will tell but we like the odds…below is a snapshot of the market’s technical condition right now…notice how the overbought RSI condition has unwound…

Don’t forget, U.S. markets are closed Monday for President’s Day and Canadian markets are also closed for Family Day…we’ll be posting our regular weekly review tomorrow with no postings Sunday or Monday due to the long weekend…next week we’ll be pulling a lot of things together from the first six weeks of 2012 and listing our “strong plays” and “watch list” for the balance of the first quarter and beyond…the speculative situation that we see having the most momentum going forward, technically and fundamentally, is Rainbow Resources (RBW, TSX-V) with a current market cap of only $6.9 million…this is a young company (listed just a year ago) that hooked up with some determined Alberta “cowboys” in a transaction with privately-held Braveheart Resources last fall, so Rainbow is now stamped with some Alberta AAA beef – watch out…RBW is a Gold and Silver explorer on the move and is now in the game with cash in its pockets and a terrific land package in southeastern B.C. to tell the world about and drill…

Arian Silver (AGQ, TSX-V) pulled back to support and is now in a Bullish Engulfing Pattern with the stock closing yesterday at 35 cents…it was a normal pullback from the recent high of 39 cents, and we hope some of our readers were able to take advantage of it…

Note: John, Jon and Terry do not hold positions in AGQ.

Golden Predator (GPD, TSX) looks very attractive at 62 cents and the company announced yesterday that it has entered into a purchase agreement with Alexco Resource Corp. (AXR, TSX) pursuant to which it will acquire a 100% interest in the Brewery Creek Project, subject to a 2% net smelter returns royalty in favor of Alexco…on closing, the purchase agreement will replace the existing Brewery Creek option agreement under which Golden Predator has the right to earn up to a 75% interest in the project, with Alexco having the right to buy back a 10% interest…Golden Predator will pay Alexco $4-million less the amount of the current reclamation bond posted by Alexco with the Yukon government (estimated at $795,000), issue 7.5 million common shares of the company and 3.75 million share purchase warrants…

We expect the Yukon plays, including GPD with its Brewery Creek Project, will heat up considerably this spring, so there are a lot of opportunities in that space…the Big Daddy up there, of course, is ATAC Resources (ATC, TSX-V) which has just bounced off its rising 20-day rising moving average (SMA) and is looking exceptionally attractive from a technical standpoint as John’s chart outlines…

Note: John, Jon and Terry do not hold positions in ATAC.

Gold is under some pressure this morning with the euro sliding to a three-week low versus the greenback…as of 5:50 am Pacific, the yellow metal is off $19 an ounce at $1,709…Silver is 69 cents lower at $32.81…Copper has fallen 6 pennies to $3.74 while the U.S. Dollar Index has climbed nearly one-third of a point to exactly 80.00…

Gold Demand Growing

Demand for Gold hit an all-time high in 2011 as European, Indian and Chinese demand soared according to the World Gold Council’s just-released annual report…in Europe, Germany and Switzerland were the main drivers of the growth as the euro zone debt crisis escalated and investors looked for safe havens…

While the jewelry market was resilient, the Gold investment market grew more, with a 5% increase in annual demand…total demand around the world rose to 4,067 tonnes, worth around $206 billion – the first time annual demand for Gold has risen above $200 billion…

India is still the country where most Gold is sold, despite the recent weakness of the rupee, with around 500 metric tons of Gold jewelry sold in 2012 and total demand of 933 metric tons…

There was a hefty increase in Chinese demand which led the WGC to predict that China is emerging as the world’s biggest buyer of Gold…

Central banks also hiked their purchases from 77 metric tons in 2010 to 440 metric tons in 2011 as worries about a second global recession grew…

The Fed – Will They Or Won’t They?

The Federal Reserve is not yet ready for a QE3 program of asset purchases to boost the U.S. recovery, according to the minutes of its January policy meeting released yesterday…only a few members of the rate-setting Federal Open Market Committee thought that economic conditions “could warrant the initiation of additional securities purchases before long”…the minutes show that despite the Fed’s bias towards doing more to aid an economy beset by high unemployment, its hurdle for another big asset purchase program is high…

Today’s Markets

Stock index futures as of 5:50 am Pacific have rebounded after earlier losses, thanks to a slew of U.S. economic reports released in the last half hour…jobless claims fell 13,000 to 348,000 (close to a four-year low)…housing starts rose more than expected in January while producer prices outside food and energy recorded their largest increase in six months last month..they are unlikely to ignite inflation pressures, however, given the slack in the labor market…the Philadelphia Fed’s business outlook index is released at 7:00 am Pacific…

The TSX Venture Exchange closed up 4 points yesterday to close at 1634 despite the Dow’s largest single-day point drop of the year…the Venture’s overbought daily technical condition has been unwinding nicely over the last eight trading sessions, so the downside from current levels is really quite limited in our view…if 1625 doesn’t hold as support, then the 1565 to 1575 area most definitely will…it’s time to lock in positions on good quality situations in advance of what we believe is a very powerful move in the making…one of the best 20-cent deals we see at the moment is Rainbow Resources (RBW, TSX-V) which has successfully completed a $1.1 million financing on almost entirely “hard dollars” (very little flow-through which was nice to see)…with the PP out of the way, we expect things to heat up with Rainbow and a major report is pending from the company’s geological consultant on RBW’s Big Strike Project in the West Kootenay region of British Columbia…

John hit the “nail on the head” with Encanto Potash (EPO, TSX-V) which closed yesterday at 42.5 cents…momentum traders have certainly jumped on EPO as we speculated they would after the stock broke out to 30.5 cents February 3…the next major resistance area for EPO is 50 cents as John outlines in the updated chart below…

Note: John, Jon and Terry do not hold positions in EPO.

Some of our readers are closely following Focus Metals Inc. (FMS, TSX-V) which is a graphite play we have reported on occasionally over the last year or so…again, John was bang-on in his February 10 breakout call for FMS as it busted through resistance in the mid-80’s…below is an updated FMS chart that continues to look very strong…

Note: John, Jon and Terry do not hold positions in FMS.

As regular readers know, one of our favorite small Gold producers is Richmont Mines (RIC, TSX) which is at a “sweet spot” right now with the stock closing yesterday at $11.56…RIC has declined in 7 out of the last 9 sessions and now is the time (based on technical patterns) to be jumping all over it…this is a very well-managed and profitable company with an impressive production growth profile…

Note: John, Jon and Terry do not hold positions in RIC.

Gold continues to find strong support in the low $1,700’s…as of 5:35 am Pacific, the yellow metal is up $10 an ounce at $1,731 after falling as low as $1,721 overnight…Silver is 31 cents higher at $33.89…Copper is flat at $3.80…Crude Oil has added $1.28 a barrel to $102.02 (didn’t a Saudi official recently say they wouldn’t let Crude go over $100?) while the U.S. Dollar Index has reversed and is now up nearly one-fifth of a point at 79.55…

Stock index futures as of 5:35 am Pacific are pointing toward a positive open on Wall Street…European shares are rallying on the back of economic data that was not as bad as expected while Asian markets closed sharply higher today…

The Empire State survey, the monthly gauge of manufacturing in the state of New York, came out with very positive numbers (better than expected) just a few minutes ago…industrial production figures are coming out at at 6:15 a.m. Pacific while the National Association of Home Builders’ Survey will be released at 7:00 am…

Meanwhile, minutes from the last Federal Open Market Committee meeting will be released at 11:00 am Pacific, and traders will be watching to see what Fed members had to say about more quantitative easing…

Euro zone officials have called off an emergency meeting of finance ministers to approve the next bail-out for Athens amid a growing fight among the country’s European creditors about the merits of allowing Greece to go bankrupt…Jean-Claude Juncker, the Luxembourg prime minister who chairs the euro group, said the delay in today’s scheduled meeting had been prompted by the continued failure of Greece’s political leaders to commit to the bail-out’s tough terms after April elections…

A long-awaited report that’s expected to provide a road map to austerity for deficit-plagued Ontario will be released later today and will contain some controversial recommendations on health care, according to Ontario Finance Minister Dwight Duncan…Big Government Ontario is going in the direction of Greece and needs a major wake-up call…hopefully Don Drummond’s report will provide that today…

The TSX Venture Exchange, which has declined in six out of the last seven trading sessions, hit support at exactly 1625 yesterday…that was our initial minimum target level and we’ll see if that holds…the Venture’s daily overbought technical condition is unwinding in an orderly fashion…based on technical patterns and Fibonacci and other support levels, we highly doubt the CDNX will fall below 1575 in this anticipated minor pullback that started February 6…in fact, yesterday’s intra-day low of 1625 may have been an important bottom…below is John’s updated chart for the Venture…

We believe it’s just a matter of time – perhaps by month-end – when the CDNX blasts through the resistance band highlighted in John’s chart…now is definitely the time to be positioned in the right situations to take full advantage of that anticipated breakout in the Index…

One of those situations, we believe, is Rainbow Resources (RBW, TSX-V) which has beefed up its treasury through a strategic financing with news imminent on the official closing of that private placement…Rainbow has a current market cap of just $5.4 million and a barnburner of a project (Silver and Gold properties) in the West Kootenay region of British Columbia…a major report on that project is forthcoming from the company’s geological consultant, Moose Mountain Technical Services, as RBW has already indicated…with PDAC coming up in the first week of March, it wouldn’t surprise us if Rainbow is gearing up to hit the ground running by that point with a tsunami of information which should clearly reveal the potential of its 7,000-hectare land package that was created through privately-held Braveheart Resources over a period of several years…Rainbow, listed just a year ago, was essentially a “shell” up until the Braveheart transaction last fall…this is precisely the kind of low market cap opportunity that has “home run” possibilities…the stock is just starting its first major “run”, as one can tell on John’s updated chart below, with the sharp increase in volume since December an obvious clue that good things – perhaps great things – are in store…the Rainbow chart is indeed a picture of beauty as it continues to trade in an upsloping channel in place since November…

Note: John and Jon continue to hold positions in RBW (Jon added to his position yesterday).  Terry does not hold a position in RBW.

In late breaking news, Abcourt Mines (ABI, TSX-V) has intersected 4.7 metres grading 1,386.16 g/t Ag (approx. 45 ounces per tonne) and 5.57% zinc at its Abcourt-Barvue Silver-Zinc Property near Val-d’Or (from 240 to 244.70 metres depth)…that 4.7-metre intercept (true width estimated at 80%) included 1.30 metres grading 4,696 g/t Ag and 11.75% zinc…Abcourt closed yesterday at 10.5 cents and will be very active today given that news which was released pre-market…

Golden Predator (GPD, TSX) has been halted this morning, pending news…

One reason for our optimism regarding the CDNX is how so many individual junior mining stocks (on both the Venture and the TSX) have broken out of downtrends on significant volume…the latest example is Volta Resources (VTR, TSX) which jumped 38 cents yesterday on total volume (all exchanges) of nearly 6.4 million shares…Volta reported the discovery of new high-grade mineralization through RC drilling at its Kiaka Gold Project in West Africa…momentum should carry Volta higher to the resistance levels John has highlighted…

Note: John, Jon and Terry do not hold positions in VTR.