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Gold is under pressure for the fifth straight trading session, thanks in part to continued strength in the greenback…as of 7:25 am Pacific, bullion is off $21 an ounce at $1,404…Silver has retreated 81 cents to $22.60…Copper is down 6 cents to $3.22…Crude Oil is $1.61 lower at $92.60 while the U.S. Dollar Index has climbed nearly one-third of a point to 83.84…

Updated Gold Chart

Important Fibonacci support levels for Gold are $1,424, $1,404 and $1,385 in this updated chart from John…

U.S. Producer Prices Drop The Most In 3 Years

As we’ve been mentioning lately, deflation has to be more of a concern for policymakers around the world at the moment than inflation…in the U.S., producer prices saw their largest drop in three years in April as gasoline and food costs tumbled, pointing to weak inflation pressures that should give the Federal Reserve plenty of latitude to keep monetary policy very accommodative…the Labor Department said this morning that its seasonally adjusted producer price index fell 0.7% last month, the biggest decline since February, 2010…wholesale prices had dropped 0.6% in March…underscoring the tame inflation environment, wholesale prices excluding volatile food and energy costs nudged up 0.1%,  the smallest increase since November…the so-called core PPI had risen 0.2% in each of the previous four months…meanwhile, activity in New York state’s manufacturing sector unexpectedly contracted in May, falling to the lowest level in four months as new orders and employment pulled back, data from the New York Federal Reserve showed this morning…the New York Fed’s “Empire State” general business conditions index fell to minus 1.43 in May from 3.05 in April, thwarting economists’ expectations for an increase to 4…it was the first reading below zero since January, which indicates contraction for the sector…

Today’s Markets

Japan’s Nikkei average soared another 2.3% overnight to close at 15096, its highest level since January, 2008…a weaker yen, which is making Japanese exporters more competitive, continues to propel the Nikkei…China’s Shanghai Composite gained 8 points to close at 2225…Chinese Premier Li-Keqiang stated his government has limited room to use policy stimulus to support the economy… European shares are up slightly in late trading overseas despite some disappointing economic data out of the euro zone where economic output contracted for a sixth straight quarter…a slight recovery in Germany failed to offset recessions in France and Italy…the current downtown in the euro zone has now stretched for longer than the 2008-2009 recession, though the drop in output isn’t yet as severe as it was four years ago…business surveys for April suggest the bloc’s economy will likely decline again this quarter…euro zone GDP last expanded during the third quarter of 2011, a time when Germany was growing at rates of 3% or more and recessions were largely limited to small countries such as Greece, Ireland and Portugal…North American markets are under modest pressure in early trading today…the Dow is off 16 points at 15199 through the first 55 minutes of trading…the TSX has shed 94 points while the Venture is off 6 points to 944…

Struggling Resource Sector Saved From NDP Rule In British Columbia

At this difficult time in the junior resource sector, investors got some surprising and very welcome news late last night…what appeared would be an almost certain NDP victory in the B.C. election- according to almost every poll – instead became an historic upset by the Liberal Party as the free enterprise, centre-right coalition led by Christy Clark won a decisive majority government to claim its fourth consecutive election victory going back to 2001…this was a huge win for resource development (with national implications) over the radical agenda put forward by the NDP that even rejected the expansion of an existing pipeline in that province that has operated safely for more than 50 years…the NDP also promised it would run deficits with a tax-and-spend platform that reminded many voters of previous disastrous NDP governments in the 1970’s and 1990’s that forced capital (investment and human) to flee the province…former premier Mike Harcourt actually stated on the Sun News Network last night (before it became apparent the NDP was in trouble) that, “The Liberals and Conservatives focus far too much on the economy…the NDP has a balanced approach”…didn’t Bill Clinton say, “It’s the economy, stupid”?…what the socialists in B.C. still fail to understand is the concept of wealth creation and the fact that the best social program is a private sector job…the NDP also promised a “review” of natural gas fracking and no doubt would have nixed several mining, resource and other development projects for “environmental” reasons…the Liberals in B.C. aren’t without their sins and there’s more they can do to make mining exploration easier in the province, including a quicker approval process for permits, but the industry is no doubt breathing a sign of relief this morning as it won’t have to face the uncertainty and potential negative consequences of four years under the NDP…British Columbia is still open for business, and for that we are grateful…the socialists will have four years to try and figure out how they blew a 20+ point lead in the opinion polls in a late collapse even more dramatic than the Maple Leafs’ performance in Boston two nights ago…

Liberal Election Victory Is Good Timing For Northern B.C. Copper-Gold Discovery

Political stability has returned to British Columbia at a time when the Iskut River region is heating up in a major way with an important early discovery by Colorado Resources (CXO, TSX-V) and a ramping up of exploration activity in the vicinity of Colorado’s North ROK Property…we’ve been following this story closely since Day 1 and we believe this area is shaping up to become Canada’s exploration “hot spot” over the summer…in a situation like this, how the markets are behaving can be almost irrelevant…Colorado hit a new high yesterday on speculation, climbing 36 cents to close at $1.35 on total volume (all exchanges) of more than 4 million shares…CXO appears to be right on track to reach the Fibonacci $1.92 level, as John has laid out, and the potential for much higher prices certainly exists if upcoming step-out drilling results confirm NR13-001 which returned 242 metres grading 0.63% Cu and 0.85 g/t Au…

If you’re looking for the next “up-and-comer” in the region with a low market cap, tight share structure and the potential to explode over the summer, our favorite is Victory Ventures (VVN, TSX-V) which already has a drill program lined up to commence soon at its 100%-owned Copau Property within approximately 5 kilometres of Colorado’s discovery…we also wouldn’t be surprised if Victory expands its footprint in the area as it has the expertise and the means to astutely build on its land package…geologically, the Iskut River region is indeed prolific (Imperial Metals‘ Red Chris Mine goes into production next year) and still very under-explored…with little outcropping, IP surveys (as Colorado has shown) help immensely in the selection of highly prospective drill targets and this is also why Victory has such a great opportunity at Copau…an IP survey located a strong chargeability response (increasing with depth, similar to North ROK) underlying the southwestern portion of the property…they have numerous targets to work with at Copau…Victory closed up a penny-and-half yesterday at 10 cents and has a tight share structure even with the financings that it’s currently closing…as always, perform your own due diligence, but VVN in our view is the company in the best position at the moment to benefit from Colorado’s success…below is an updated 1.5-year weekly chart from John…note the breakout yesterday which does need confirmation…

Colorado Resources (CXO, TSX-V) Updated Chart

Northern Shield Resources Inc. (NRN, TSX-V)

In a challenging market environment, watching Northern Shield Resources (NRN, TSX-V) recently has been interesting as the company’s stock price has doubled over the last 13 trading sessions from 10.5 cents near the end of April to yesterday’s closing price of 21 cents…NRN has also just concluded financings totaling $2.7 million, money they’ll use for an initial drill program continue to advance exploration and development activities in both Greenland and northern Ontario…with approximately 150 million shares now outstanding, NRN has a market cap in excess of $30 million…we’re sure that many companies would like to know what NRN’s “secret sauce” is…they’ll need very good results to support and/or significantly increase this kind of a market cap in the current environment, but the chart tells us that this is a company that definitely needs to be on investors’ radar screens..no need to chase this one at the moment but it’s worth keeping an eye on in the coming weeks and over the summer…

Note:  John, Jon and Terry do not hold share positions in NRN.  Jon holds share positions in CXO and VVN.

Gold has traded between $1,427 and $1,444 so far today…as of 6:45 am Pacific, the yellow metal is down $3 an ounce at $1,428…Silver is off 26 cents at $23.39…Copper is off 8 cents a pound to $3.27…Crude Oil is 26 cents lower at $94.91 while the U.S. Dollar Index is stronger again, up more than one-tenth of a point to 83.30…

Here’s a positive for Gold – consumers will sell the least used Gold in five years after the collapse in prices in April, curbing a source of metal that typically accounts for about one in every three ounces of global supply…refiners will handle about 1,550 metric tons of old jewelry and other discarded metal this year, 4% less than in 2012 and the least since 2008, according to TD Securities…recycling more than doubled in the decade through 2011 as prices rose to an all-time record of more than $1.,900 an ounce…“April was the worst month in memory,” said Arthur Abramov, the owner of Manhattan Buyers Inc., a cash-for-Gold operator in New York that saw volumes drop to 300 ounces a month from 500 ounces…“A lot of people were shocked, and a lot of people were standoffish about selling,” he added (source: Bloomberg)…

Holdings of SPDR Gold Trust stood unchanged at 33.811 million ounces yesterday, just off their lowest level since March, 2009…

April Inflation Eases in India, Gold Imports Up Sharply

One reason Gold has been struggling this year is that global central bank stimulus measures are so far not leading to inflationary pressures as many had expected – expanding balance sheets simply aren’t stoking inflation…in fact, deflation in some economies is more of a concern at the moment than inflation…India is yet another example of where inflation is surprising to the downside…the country’s wholesale price index, its main gauge of inflation, rose just 4.89 percent year -on -year last month – far below expectations for a rise of 5.4% – and slower than the 5.96 percent rise in March…India’s central bank may actually consider cutting interest rates again next month…”Although the central bank’s guidance remains cautious, we believe that the flow of macroeconomic data – continued downside surprises in inflation, a more benign current account and weak growth indicators is creating room for further monetary easing in the coming months,” Rahul Bajoria, economist at Barclays, wrote…

Meanwhile, India saw a 138% jump in Gold imports in April – likely an aberration with banks rushing to import Gold before the implementation of certain restrictions that just came into effect…in addition, of course, consumers were taking advantage of prices not seen in two years while the wedding season and a popular Hindu festival were also factors in driving interest in Gold…the May figure will be more indicative of what the true appetite is at the moment for Gold in India…over the past year, the Indian government has stepped up efforts to moderate Gold demand in order to curb its trade deficit…in January, it raised the import duty on Gold to 6% from 4% to curb imports, following two hikes in 2012…these duties together with a slowing economy have actually had limited impact on denting Gold demand as it is still seen as a reliable store of wealth in that country…following the release of the April data, the Reserve Bank of India (RBI) yesterday brought into effect previously announced curbs on banks importing Gold…

Is China Preparing For Slower Growth?

According to local media reports, China could lower its official growth forecast for next year from 7.5% to 7% – a move that would definitely be worth watching and one that suggests Beijing is growing more comfortable with a slower pace of growth while its re-balances its economy and implements structural reforms…economic growth of 7% is apparently the bottom line for policymakers and any stimulus efforts could make the task of controlling the property market and inflation much harder, the China Securities Journal reported late last week…in addition, recent press reports have stated that Premier Li Keqiang has requested studies on the feasibility of lowering the official growth target to 7% next year…China’s 2012 growth of 7.8% was its slowest in 13 years…over the past three decades the Chinese economy has grown at an average annual rate of 10%…to shift the economy to a more sustainable level of growth long-term, Beijing has pledged to make domestic consumption, rather than investment and exports, the key driver of economic activity…

IEA Forecasts U.S. To Account For One-Third Of New Oil Supplies

The U.S. will account for a third of new oil supplies over the next five years, more than previously expected, according to the International Energy Agency, underscoring the impact of the shale revolution…in its medium-term review of the oil market, the industrialized countries’ energy watchdog sharply raised its forecast for North American oil production from six months ago and slightly cut its forecast for capacity additions from the OPEC cartel…the new outlook, released this morning, paints a mildly bearish picture for Oil prices, as production will grow faster than demand, building a large cushion of spare capacity in the market…“North America has set off a supply shock that is sending ripples throughout the world,” Maria van der Hoeven, IEA executive director, said…“The good news is that this is helping to ease a market that was relatively tight for several years”…the IEA report stated, “There is hardly any aspect of the global oil supply chain that will not undergo some measure of transformation over the next five years, with significant consequences for the global economy and Oil security“…U.S. Oil production grew by more than 800,000 barrels a day last year, the biggest annual increase on record, thanks to rapid growth in output from shale oilfields such as the Bakkan in North Dakota and eagle Ford in Texas…average North American production is expected to grow by 3.9 million barrels a day between 2012 and 2018, accounting for more than half of the increase in non-OPEC production for the period…how Canada deals with this new energy reality – and how it starts moving supplies to critical Asian markets when the expected new premier of British Columbia wants little to do with pipelines from Alberta – is going to be one of this country’s major challenges in the years ahead…

Today’s Markets

Asian markets were mostly lower overnight…Japan’s Nikkei average took a breather, falling 24 points to close at 14758 after robust gains yesterday and last week…China’s Shanghai Composite slipped 25 points to finish at 2217…trading in Europe has been relatively quiet today, while in North America the Dow is shooting for its 18th consecutive positive Tuesday…yes, Tuesdays have been good to the Dow with a record 17 straight advances…as of 6:45 am, the Dow is up 25 points at 15117…the TSX has gained 21 points while the Venture has slipped 2 points to 955…3 straight negative days for Gold (Thursday, Friday and Monday) dropped the Venture to its 20-day moving average (SMA) on a closing basis yesterday…so far, resistance at 970 is proving to be formidable…we’ll see what happens in the coming days, but the 20-day SMA is now rising for the first time since January and it could provide important support…

TSX Gold Index Chart Update

The TSX Gold Index is currently basing within a symmetrical triangle that ranges from approximately 206 to 190…we would expect a rally in Gold stocks if the Index is able to push above the triangle, though resistance at the down trendline (currently at 230) will be stiff…selling pressure recently has been declining as shown in this 6-month daily chart from John…

True Gold Mining (TGM, TSX-V)

A trend we’re seeing on the increase recently is juniors securing financings with majors – True Gold Mining (TGM, TSX-V, formerly Riverstone Resources) is the latest example as it just completed a $10 million private placement with Teck Resources Ltd. (TCK, TSX) at 33 cents per share when the share price was trading in the high 20’s…True Gold has two advanced projects in Burkina Faso, west Africa…if Gold stocks can start gaining some traction, TGM could at least challenge its down trendline resistance at 45 cents…it closed yesterday at 36.5 cents and has risen three days in a row…definitely one to put on the radar screen for the long-term gives its strong management and relationship with Teck…

Great Western Minerals Group Ltd. (GWG, TSX)

Great Western Minerals’ (GWG, TSX) share price has taken a beating since early 2011, plunging from an all-time high of $1.25 in early 2011 to a nearly 4-year low of 13.5 cents this month…it closed yesterday at 15.5 cents…the company is attempting to become a leading rare earth producer outside of China and had just over $50 million in working capital as of the end of December…on Thursday this week, GWG releases its first quarter financials and will also be addressing key market initiatives and its overall business strategy…with approximately 420 million shares outstanding, GWG has a current market cap of $65 million based on yesterday’s 15.5-cent closing price…selling pressure has been intense over the past year, as you can see from John’s 3-year weekly chart below, but the stock may have found at least a temporary bottom at 13.5 cents and could be a good trade for a bounce higher in the weeks ahead…that will depend a lot on Thursday’s results, so put this one on your radar screen…

Note: John, Jon and Terry do not hold share positions in TGM or GWG.

Gold is down for the third straight session but continues to show resilience in the low $1,400’s…as of 7:30 am Pacific, bullion is off $14 an ounce to $1,434…so far it has held above Friday’s intra-day low of $1,419 which is Fibonacci support…Silver is down 17 cents to $23.70…Copper is flat at $3.35…Crude Oil is $1.03 lower lower at $95.31 while the U.S. Dollar Index is relatively unchanged at 83.14…

U.S. Dollar Index Updated Chart

The U.S. Dollar Index got a major lift Friday when the Wall Street Journal reported that U.S. Federal Reserve monetary officials have come up with a strategy to wind down QE3, the Fed’s $85 billion-a-month bond-buying program…there was no timeline given, of course, and the story in our view was all about nothing as it merely reported the obvious – why wouldn’t the Fed have a series of strategies (including a stimulus exit strategy) to deal with various possible scenarios?…even a ramping up of QE3 can’t be ruled out if unemployment remains stubbornly high and inflation continues to come in below expectations…in any event, the Dollar Index is looking more bullish at the moment but that could change in a hurry given these volatile markets…the big question is whether it’ll be able to push through resistance beginning at 83.50 (the Index reacted April 4 after hitting 83.66) in the near future…the Dollar Index ceiling is from 83.50 to the July, 2012, high just above 84…if this ceiling holds firm, this will be helpful to Gold….it’s hard to imagine why the Fed would want to see a major surge in the greenback…below is a 6-month daily chart from John…

Updated Silver Charts

Silver continues to build a base with support at $22…one positive sign recently has been a decline in selling pressure as seen in this 3-year weekly chart from John…

Long-Term Silver Chart

The 11-year monthly chart shows how Silver can be expected to encounter very strong resistance at $26…the primary trend is clearly bearish…below the $22 support, as indicated in the previous chart, one can see the strong long-term support directly underneath $20 an ounce (between $17.50 and $19.50)…notice the bearish -DI/+DI crossover which breaks a long trend…

Data Reinforce Concerns Over Sluggish Chinese Recovery

A slew of economic data came out of China this morning…the upticks came in below forecasts, reinforcing the view that Chinese growth is not about to come roaring back anytime soon…industrial output rose by 9.3% year-on year-in April from 8.9% in March, but this was below forecats for a rise of 9.5%…non-rural fixed asset investment grew 20.6% for the January to April period – against expectations for a rise of 21% – after accelerating 20.9% in the January to March period…retail sales were 12.8% higher than a year ago in April, accelerating from a 12.6% increase in March…the slight rebound was thanks to accelerating growth in car sales and a rush to buy Gold near the end of April which pushed year-on-year jewellery sales in the first four months up by 72%, compared with 17.7% growth in the first three months…

Margin Debt In U.S. Nears Record High

The Wall Street Journal reported over the weekend that small investors in the U.S. are borrowing against their portfolios at a rapid clip, reaching levels of debt not seen since the financial crisis…the trend – driven by a combination of rising stock values and rock-bottom interest rates – is sparking a growing debate among market watchers…on the one hand, it shows investors’ increasing confidence in a bull market for stocks that has already lifted the Dow Jones Industrial Average 15.1% in 2013…on the other hand, increasing margin debt serves as a warning sign that markets might be getting a little too frothy…as of the end of March, the most recent data available, investors had $379.5 billion of margin debt at New York Stock Exchange member firms, according to the Big Board…that is just shy of the record $381.4 billion in margin debt set in July, 2007…in March, the level of margin debt stood 28% higher than one year earlier, a time frame that saw the S&P 500 rise 11.4%…as more investors rely on money borrowed against stocks, any significant fall in stock prices could be magnified if investors are forced to sell securities to raise cash and meet margin requirements…

Today’s Markets

Asian market were mixed overnight but Japan’s Nikkei average continued to climb higher, gaining 175 points to close at 14782…the Nikkei was helped by a weaker yen which fell to a new four-and-a-half year low against the greenback after finance officials from the G-7 gave Japan’s ultra-loose monetary policies a green light at a meeting over the weekend…China;s Shanghai Composite slipped 5 points to 2242…European shares are down slightly in late trading overseas…as of 7:30 am Pacific, the Dow is down 37 points to 15082…U.S. retail sales unexpectedly rose in April as households bought automobiles, building materials and a range of other goods, pointing to underlying strength in the economy…the Commerce Department said this morning that retail sales edged up 0.1% after a revised 0.5% decline in March…economists polled by Reuters had expected retail sales to drop 0.3% last month after a previously reported 0.4% decline in March…the TSX is 76 points lower through the first hour of trading while the Venture has slipped 4 points to 963…970 is the key level the Venture needs to overcome in order to gain fresh upside momentum…

Timmins Gold Inc. (TMM, TSX)

Readers should take a close look at Timmins Gold (TMM, TSX) which is coming off its strongest quarter ever as reported last week, though the stock is down 21% from its April high of $3.05…Timmins earned 10 cents per share in Q1 (vs. 4 cents per share in the same period last year) thanks to declining costs and record revenues of $45.9 million…the company’s San Francisco Mine (open-pit) in Sonora State, Mexico, produced a record 28,328 ounces of Gold in the first quarter and is on track to meet the company’s objective of 130,000 ounces for all of 2013…Timmins has $27 million in cash and will add significantly to its cash balance as the year progresses thanks in part to lower exploration costs – it has almost completed a major infill drilling program (nearly 200,000 metres) at the property, from which an updated technical report will be produced and released late this summer…the stock closed Friday at $2.40…below is a 2.5-year weekly chart from John…there is very strong technical support at $2.25, and this is certainly reinforced by the improving fundamentals…

iSign Media Solutions Inc. (ISD, TSX-V)

A non-resource play we continue to like is iSign Media Solutions (ISD, TSX-V)…the company is a global leader in multi-platform location-based messaging solutions that utilize Bluetooth, Mobile, WiFi and Location-Aware technologies to deliver permission-based consumer messaging in an innovative and cost effective way to engage shoppers at the point of sale…iSign is making strong inroads in the United States and is also in the process of finalizing a major financing (up to $9 million) through a 30-cent private placement…the stock closed Friday at 27.5 cents…the financing will be used for the manufacturing of the company’s smart antennas to fulfill both existing and anticipated purchase orders…the company’s revenues for the first quarter of 2013, ending January 31, nearly tripled over the same period last year…technically, the stock has been consolidating in a horizontal channel between 20 and 30 cents since November of last year…accumulation has picked up since February…note the down trend line in the 2.5-year weekly chart below…if the company continues to successfully advance its business plan, it’s just a matter of time before the share price busts through the 28 to 30-cent resistance area…

Note: John, Jon and Terry do not hold share positions in TMM or ISD.

TSX Venture Exchange and Gold

The Venture gained a modest 2 points for the week, closing at 967, while volume remained light.  However, trading action Thursday and Friday was highly encouraging as the Index held up extremely well in the face of a $50+ drop in the price of Gold.  Also, for the first time in nearly 4 months, the Venture has climbed above its 20-day moving average (SMA).  It also found support at the 20-day SMA during Friday’s session when it fell as low as 958 and rebounded to close down just 3 points at 967 despite the weakness in Gold.  With the 20-day poised to reverse to the upside as early as Monday, a modest recovery that began in mid-April after Gold’s record sell-off could begin to accelerate to the upside in the coming week.  As John’s charts have shown, key resistance is at 970.  On a close above 970, the bulls have the immediate advantage.  RSI(14) on the 1-year weekly chart below is at 38%, leaving plenty of room for a move higher.  Buying pressure has been consistent so far this month, another positive sign.  What appears to be shaping up is a rally that lifts the Index into a resistance band between 1000 and 1075.  This could translate into substantial gains for a select number of stocks.  Given this scenario, keep a close on market leaders and that of course includes Colorado Resources (CXO, TSX-V) with its northern B.C. discovery – and other players in that Iskut River area.

Gold

Bullion went on a roller coaster ride Wednesday through Friday – first, it climbed more than $20 an ounce Wednesday, and then it plunged more than $50 an ounce beginning late Thursday and continuing into Friday as the U.S. Dollar Index took off to the upside.  After hitting an intra-day low of $1,419 an ounce on Friday, however, Gold then shot back up nearly $30 to close the week at $1,448.  Through all of this, what’s interesting is that buying pressure is now showing up on the 6-month chart for the first time since the mid-April record sell-off.  In addition, it’s important to point out that after weeks of outflows, Gold-backed exchange-traded funds on Thursday registered their first day of inflows since the end of March (2.5 metric tons according to data from Bloomberg).  The action we’re currently seeing in both the Venture and the TSX Gold Index suggests Gold has a good chance of pushing through resistance in the $1,480’s in the coming few weeks.  We do believe, however, that the primary trend for the remainder of the year is bearish.  At the very least we do expect a re-test of the April low later this year.

Silver made a nice intra-day reversal Friday and actually finished higher for the day at $23.87.  For the week, though, Silver lost 26 cents.  Copper gained 6 cents last week to close at $3.35.  Crude Oil was up 43 cents to $96.04 while the U.S. Dollar Index jumped a full point to 83.10.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been 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, has had a huge impact on bullion.  Despite its current weakness, the fundamental long-term 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, a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, money supply growth around the globe, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflation is prevailing over inflation in the world economy and this had a lot to do with Gold’s recent plunge below the technically and psychologically important $1,500 level, along with the strong performance of equities which are drawing money away from bullion.  Where and when Gold bottoms out in this cyclical correction is anyone’s guess, but we do expect new all-time highs later in the decade.  There are many reasons to believe that Gold’s long-term bull market is still intact despite a major correction from the 2011 all-time high of just above $1,900 an ounce.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than three 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 a great deal on the Gold and Silver markets 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 and Silver 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. 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. 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.  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 perspective (His money that we have been given stewardship of), He will bless you.  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 hurting for the second straight day and has fallen below the $1,440 level that has provided strong support recently…as of 7:15 am Pacific, bullion is off $30 an ounce at $1,428…it has been as low as $1,424…Silver is up 38 cents lower at $23.37…Copper is up a penny at $3.34…Crude Oil is off $2.33 a barrel to $94.06 while the U.S. Dollar Index has climbed another one-third of a point to 83.10…

Commodity-based exchange traded products (ETP’s) suffered record outflows of $9.3 billion in April, data showed yesterday, as institutional investors dumped Gold holdings…Global outflows from commodity ETP’s tripled month-on-month, according to Blackrock Inc., the world’s largest asset manager, while redemptions from the precious metals segment quadrupled after Gold’s largest spot-price decline in 30 years…investors pulled $8.7 billion from Gold ETPs globally, Blackrock’s data showed, after the yellow metal plunged to $1,321.35 an ounce…lower U.S. inflation expectations, a weak Chinese GDP report and rumors of potential Gold reserve sales by distressed European countries such as Cyprus also contributed to investor outflows, Dodd Kittsley, global head of ETP research at BlackRock, said…the previous record for outflows was set in February when Gold ETP’s lost $5.7 billion…outflows from Gold ETP’s now amount to $17.9 billion year-to-date…by the way, Blackrock has nearly $4 trillion in assets under management and Street Authority reported that, “If the company were a country, then its assets under management would put it at the fourth largest in terms of gross domestic product, higher than Germany or France”…

Deutsche Bank said today that it has lowered its average Gold forecast for 2013 by 6% to $1,533 an ounce in response to the sharp price decline last month and the bank’s upgraded forecast for the greenback…Deutsche Bank looks for the dollar to outperform other currencies in the coming years due to superior U.S. growth prospects coincident with a gradual withdrawal of accommodative monetary policy by the Federal Reserve…dollar strength would create a “powerful counter-weight to Gold“, Deutsche Bank said…

Today’s Markets

Asian investors enjoyed a strong risk-rally today with both Japanese and Australian equities extending their bull run after the yen weakened through the key 100-mark against the U.S. dollar for the first time in four years…Japan’s Nikkei average shot up 416 points overnight to close at 14608, its highest level since January, 2008…for the week, the Nikkei was up an astounding 6.7%…the country’s latest economic data suggest the economy is picking up steadily on the back of aggressive monetary easing by the Bank of Japan and a weaker yen which is helping corporate profits…official figures released today showed bank lending in April was up 2.1% from a year earlier, the largest percentage gain since July, 2009…separate data showed Japan’s current account, the broadest measure of trade with the rest of the world, stood at ¥1.25 trillion ($12.4 billion) in March before seasonal adjustment, the largest surplus in the last 12 months…China’s Shanghai Composite gained 14 points overnight to close the week at 2247…European shares surged to fresh 5-year highs today but investor confidence was trimmed back slightly by industrial output data for Italy which showed a decline for the second consecutive month…the Dow is up 22 points through the first 45 minutes of trading…the TSX has gained 19 points while the Venture is off 4 points at 965…the CDNX has held up reasonably well in light of the $50 drop in the price of Gold over the past 2 days, and that’s encouraging…however, it still needs to overcome resistance at 970 in order to this modest rally since mid-April to continue…

Victory Ventures (VVN, TSX-V) Cashes Up And Goes After Its Own Discovery In Northern B.C.

The hottest play on the exploration front at the moment – and this could easily continue right through the summer – is in northwestern British Columbia where Colorado Resources (CXO, TSX-V) is drilling its North ROK Property where it announced an important Gold-Copper discovery a couple of weeks ago…more on Colorado in a moment…as we’ve been mentioning, a company that’s uniquely positioned to also grab a lot of attention in the immediate future is Victory Ventures (VVN, TSX-V) which is getting ready to commence a drill program of its own – scheduled to commence during the first week of June…this is not a case of a company with some “cow pasture” near a discovery that it’s trying to promote…in fact, in early February, nearly 3 months before Colorado’s announcement that it had drilled 333 metres grading 0.51% Cu and 0.67 g/t Au in its first hole at North ROK, Victory had secured the drill permits for its highly prospective Copau Property and announced its intention to commence a drill program by the middle of the year…a ground magnetic survey located a pronounced northwest-southeast linear-trending anomaly throughout much of the Copau claim area, and this encouraging information was then backed up by an IP survey that located a strong chargeability response underlying the southwestern portion of the property…the chargeability anomaly occurs from depths of approximately 200 metres with increasing response to 450 metres (similar to patterns at North ROK), which was the maximum reading depth of the IP…the present known extent of the anomaly varies between approximately 300 and 400 metres wide (east-west) and over 1,200 metres long (north-south), appearing open to both the west and south and at depth…

Copau is located approximately 5 km from Colorado’s discovery…it’s actually situated between North ROK and Imperial Metals’ (III, TSX) Red Chris Mine (11 km to the south of Copau) which is expected to go into production next year… meanwhile, Colorado is also currently drilling its optioned Eldorado Property which is just a couple of kilometres from Copau…so there’s plenty of activity in the area…more good results from Colorado (from either North ROK or Eldorado), and speculation regarding drilling at Copau, could give investors a real victory with VVN…and if there’s a hit at Copau, look out…Victory’s property has easy road and water access (this is not helicopter-supported drilling)…we also wouldn’t be surprised if the company were to add to its land position in the area, given its knowledge of the region and its stronger financial position…this is the best time, for a company positioned to do so, to pick up very prospective ground from weak players…it’s reasonable to believe that VVN is on the hunt…

Victory’s share structure has us particularly excited as well…at the moment, VVN has just 17.5 million shares outstanding…the company was first listed in August, 2011, raising about $1 million in its IPO at 15 cents…there are 9 million warrants outstanding, at an average price of 19 cents, and just over a million stock options mostly at 10 cents…the company has been careful in managing its cash (a good sign) and is boosting its current cash reserves of $400,000 with an over-subscribed financing at a nickel and another financing announced yesterday at 6 cents…the two private placements will raise in total approximately another $500,000, arming Victory with nearly $1 million as it proceeds to a drill program with a tight float…of course the shares issued in these two financings are locked up until September or so…

Below is an updated VVN chart, and note the Fib. target…there is very strong technical support at 7 and 8 cents…as always, perform your own due diligence but we like the prospects for VVN as this northern B.C. discovery story in the prolific Iskut River region continues to unfold…

Colorado Resources (CXO, TSX-V)

Colorado Resources (CXO, TSX-V) has an $8 million war chest to determine the potential of North ROK where the mapped Mabon-Edon porphyry body strike (see below) is approximately 2.4 km long, trending NNW-SSE, and 1+ km wide…Imperial Metals’ Red Chris porphyry body trends NE-SW with essentially the same strike length and width…both sub-volcanic intrusives are of the same Jurassic age and occur within the same general volcanic host rock assemblages…Copper-Gold ratios at the two properties are comparable…of course there’s still a lot to learn about North ROK as results from only 1 hole have been released to date…Red Chris is a deep-rooted deposit, and the same could be true at North ROK but we have no way of knowing until more results come in…the Edon portion of the target area (reportedly 250 metres topographically higher than the Mabon discovery drill hole collar site to the north) is going to be critical in terms of the potential size of this possible deposit, and it makes sense that Colorado will carry out more geophysical surveys in this area in advance of a potential major ramp-up in drilling…

Probe Mines (PRB, TSX-V) Announces $15 Million Financing

Probe Mines (PRB, TSX-V), which we’ve liked a lot and even more so given current prices, announced a $15 million bought deal financing (flow-through) this morning at a 75% premium to its share price…the deal is being put together by a group of syndicates led by Cormark Securities Inc. and BMO Capital Markets…7.5 million units at $2.00 per share which includes three-quarters of a share purchase warrant (exercisable at $2.10 per share for 2 years) per unit…Probe already had approximately $30 in cash…at yesterday’s closing price of $1.14, PRB’s market cap (excluding this financing which is expected to close May 28) is only $77.5 million…again, the company will have $45 million in cash and a growing multi-million ounce deposit at Borden Lake in northern Ontario…PRB is up 3 cents at $1.17 in early trading following the news…

Bears Lining Up Against Canada, John Examines Dollar Chart

This story was carried this morning by CNBC…Steve Eisman, the hedge fund manager who famously bet against mortgages in the United States in the run-up to the 2008 financial crash, has recommended investors now bet against Canada’s mortgage lenders and banks…Eisman is the founder and portfolio manager of hedge fund Emrys Partners which rose to prominence with subprime mortgage bets that were chronicled by Michael Lewis in the book “Big Short”…Eisman is wary of Canadian mortgage originator Home Capital Group in particular, according to Reuters…and some investors appear to have taken his advice as the stock was down 4% yesterday…”If housing rolls over, this company is going to have serious problems”, Reuters cited him as saying at the Sohn Investment Conference…the news agency said he added that the housing market is troubled and estimated the domestic funding gap for the six big Canadian banks at roughly $427 billion…house prices in Canada have doubled in the last ten years, according to the Teranet-National Bank Composite House Price Index…the surge in the index, which measures price changes for repeat sales of single-family homes, has stuttered this year, falling back by 0.09 percent in what some believe is a cooling off period…Canadian property prices are among the most expensive in the world relative to income, rents and per-capita GDP, and have been fueled by record levels of consumer debt…

Eisman is certainly not alone in his bearish views on Canada…betting against the Canadian dollar is a popular trade right now among hedge funds, and even TD economists are jumping in…the loonie is set to fly south and soon, say TD economists, who believe the currency will drop as low as 90 cents over the next year…it’s the view of economists Francis Fong and Leslie Preston that “Canada has lost much of its economic growth advantage”, and they expect Canada to lag the United States this year and next…”A depreciation in the currency towards its equillibrium value (80 to 90 cents) would help the competitiveness of Canada’s exporters”, they say…”For several years, observers have stressed that given record levels of household debt and a move towards fiscal restraint, the economy must increasingly be driven by exports and business investment…a lower loonie should help facilitate that shift…if you look at the fundamental factors driving the Canadian dollar, we think the outlook is all down”…

So What Do The Charts Say?

John has 3 charts this morning on the Canadian dollar and they combine to paint a very interesting picture…

First, let’s take a look at the short-term with a 15-month daily chart…the dollar clearly has strong support at 97 cents and a “cup with handle” pattern appears to be forming which has to be considered bullish…note the down trend line in place since last fall, however, which is consistent with weakness in the Venture and the commodities sector in general…the dollar pushed right up against that resistance yesterday before a late sell-off…the “handle”, therefore, is starting to take shape…the interpretation is that after the handle forms, the dollar will make another push higher which will take it through the down trend line to the $1.01 target level…

Long-Term Dollar Chart – 20-Year Monthly

A couple of interesting things regarding the long-term Canadian dollar chart…first, note that only once over the last decade has the RSI(14) in this 20-year monthly chart fallen significantly below the 50 level…that’s unusual in any market…the period of best strength was between 2003 and late 2007 when the dollar surged from the low ’60’s to a $1.10, thanks to a big run in commodity prices…the 2008 Crash sent the dollar tumbling into the upper ’70’s before a recovery set in that took it back to a high of $1.06 in 2011…what has formed since then is a symmetrical triangle as pointed out in the chart below…the move to $1.01 as mentioned above is consistent with this chart as the dollar would be testing resistance…at some point, either later this year or next, the dollar is either going to break out above the triangle or collapse below it…based on fundamentals, which includes a slowdown in growth in China which helped fuel the dollar rise between 2007 and 2007, our guess is that the dollar will break lower…in fact, the 90-cent level postulated yesterday by TD would simply be a normal Fibonacci retracement of the gain since the lows of the Crash…so could we see a 90-cent loonie by next year?…absolutely…

Below is a 12-year monthly Canadian dollar chart in comparison with the Venture…while we do see the strong possibility of a rally in the Venture over the short-term, we don’t believe we’ve yet since the lows in this Index in part because both Gold and the Canadian dollar still have significant downside vulnerabilities…the Venture topped out just before the loonie did in 2007, and in all probability the Venture will finally bottom out just before the dollar does…we can;t be certain, of course, of the exact timing…

Gold has traded between $1,459 and $1,478 so far today after yesterday’s jump of more than $20 an ounce…as of 7:10 am Pacific, bullion is off $9 an ounce at $1,466…Silver is down 6 cents at $23.89…Copper is off a penny at $3.32…Crude Oil is 53 cents lower at $96.09 while the U.S. Dollar Index is up one-third of a point at 82.21…

SPDR Gold Trust, the world’s Gold-backed ETF, says its holdings fell 0.60% to 1,051.47 tonnes yesterday from 1,057.79 tonnes Tuesday…physical buying is keeping Gold from falling below the $1,440 level which it touched 2 days ago…Hong Kong continues to report a shortage in the supply of Gold bars which has kept premiums at multi-month highs there…

Roulston:  “Profit Opportunities Enormous”

Some comments from Lawrence Roulston in an interview with The Gold Report:  “Let me put the current valuations into perspective: I’ve never seen anything like this in the over 30 years I’ve been in the business…the valuations are irrational…companies are trading at discounts to cash, some at one-third of the value of cash in the bank…there are companies with multi-million ounce Gold deposits trading at just slightly over the value of cash in the bank and, in some cases, even less than the value of cash in the bank…you could buy cash at a discount and get a Gold deposit or a Copper deposit thrown in for free…the profit potential is enormous for anybody who has cash and is coming into the market now”…

Roulston on the Gold price: “There will be a lot of short-term volatility…but people’s desire to own Gold on the physical level is not going away, whether people are buying Gold jewelry in China or India or Europe or buying bars and coins – Gold will act as a safe haven, as a currency hedge…there will probably be further events such as what recently happened…I don’t want to get into the whole conspiracy theory, but it seems clear that the brokerage firms involved in this had a phenomenal short position before making the calls to short Gold…it was extremely profitable for them…if they’ve done it once, they’re likely to do it again”…

“Quebec Proposes Law Top Make Mining Firms Accountable To Local Community”

That’s a headline in this morning’s Globe and Mail which reports that the Quebec government is preparing to table a mining act that will require companies to be “socially and environmentally accountable” to the local communities they operate in while being closely monitored to ensure the rules will be followed…good grief – we can’t wait to see what the separatists and socialists in Quebec are about to unveil now in another attempt to expand the role of government in the economy and pander to the growing number of radical environmentalists in that province whose real agenda is not to work with the mining and exploration companies, but to be a stumbling block and erode their presence…“There needs to be a balance between economic development and environmental protection”, Quebec Coalition Party Leader Francois Legault recently stated…we’ll be exploring in more detail in the coming weeks what investors need to know about the changes in attitude and approach to mining and exploration in Quebec…

Barrick & DR Government Nearing Agreement Over Pueblo Viejo Mine

A recent spat between Barrick Gold Corp. (ABX, TSX) and the government in the Dominican Republic appears to be thawing…Barrick says it’s nearing a firm agreement with DR authorities over its Pueblo Viejo mine and that an “agreement in principle” has been ironed out that would see the government receive higher revenue from the project through various changes to a lease agreement…Barrick says the changes would result in an even split of cash flows from the mine divided between the corporation that operates the mine and the government from 2013 to 2016…according to Barrick, the government would receive tax revenues of about $2.2 billion over the period, and would provide an additional $1.5 billion to the DR government over the life of the Pueblo Viejo mine…the deal would also apparently include an extension of the window for Barrick to recover its capital investment…

U.S. Jobless Claims Hit 5.5-Year Low

The number of Americans filing new claims for unemployment benefits dropped to its lowest level in nearly 5.5 years ears last week, signaling labor market resilience in the face of fiscal austerity…initial claims for state unemployment benefits fell 4,000 to a seasonally adjusted 323,000, the lowest level since January, 2008, the Labor Department said this morning…the third straight weekly decline in claims pushed them further below the 350,000 mark, which economists normally associate with a firming labor market…

Chinese Core Inflation Still Subdued, Producer Prices Fall Deeper Into Deflationary Territory

China’s consumer price index rose 2.4% year-on-year in April, rebounding from a temporary dip to 2.1% in March…the rise was fueled by a jump in the cost of food, especially vegetables, after an unusually cold start to the spring, the national statistics bureau stated today…however, core inflation, stripping out volatile food prices, continues to be subdued…non-food elements in China’s consumer price index increased just 1.6% year-on-year in April, lower than their average rise in the first quarter…more tellingly, producer prices fell deeper into deflationary territory in April, a reflection of lower global commodity prices as well as unused factory capacity…the producer price index fell 2.6% year-on year in April, a six-month low…“China’s short-term economic growth momentum seems weaker than expected, reducing the risk of sharp price rebound and [helping] lower inflation expectations”, Lu Ting, an economist with Bank of America Merrill Lynch, wrote in a note to clients as reported by the Financial Times this morning…

Today’s Markets

Asian stocks were mostly modestly lower overnight with Japan’s Nikkei average falling 94 points to 14191 while China’s Shanghai Composite lost 13 points to 2233…European shares are mixed…In the U.K., the Bank of England’s Monetary Policy Committee (MPC)  announced it was keeping its interest rate unchanged at the historic low of 0.5% and will not add to its current quantitative easing program, holding its fire until the arrival July 1 of Bank of Canada Governor Mark Carney…the Dow is essentially unchanged as of 7:15 am Pacific…the TSX is off a a few points at 12580 while the Venture is 2 points higher at 971…a close above 970 would be bullish as we’ve been stating…the fact that Gold is down this morning but the Venture is holding its own (trending higher in early trading) is a very positive sign…we’ll see what happens today and tomorrow…volume on the Venture, though, continues to languish…

Which Way For Gold – Venture, TSX Gold Index May Provide Clues

Despite Gold’s weakness this morning, there is some evidence that Gold may soon break out of its trading range between $1,440 and the $1,480’s to the upside…below are a couple of charts from John that show that fresh strength is starting to appear in Gold stocks…the next few trading days will be critical…what we’re also watching for is the possibility of a breakout by the Venture above resistance at 970…the 960 level is important support – it needs to hold…

Below is a 6-month daily chart comparing the TSX Gold Index with the price of Gold and the Venture…there are obvious signs that Gold stocks are gaining some momentum after the setbacks of February, March and April…conditions appear to be ideal for a strong rally, but this view will require additional support which could come over the next 2-3 trading days…

The Gold Index In Reverse – Assessing The HGD

What also gives us hope regarding Gold stocks in the near future is that cracks are starting to appear in the HGD, the double-reverse S&P/TSX Global Gold Bear ETF which has been such a powerful performer in recent months…in our chart below, you can see how it became heavily overbought recently…the strong bullish trend for the moment is clearly in decline, and what’s also interesting is the imminent threat of the 20-day moving average (SMA) reversing to the downside in the coming days – that would certainly be a bearish development for the short-term at least…John has indicated the Fib. support levels for the HGD – $18.52, $16.51 and $14.51, implying a drop of anywhere between 8% and 28% from current levels which would equate to a jump in the TSX Gold Index to between approximately 210 to 230…

Graphite One Resources Chart Update (GPH, TSX-V)

Graphite One Resources (GPH, TSX-V) has made a nice move recently, behaving as expected based on John’s technical analysis…yesterday, it hit a new 52-week high of 26.5 cents and closed up 3 pennies at 25 cents where there is resistance…continued strong volume will be required to push this through a quarter in the coming days…it’s unchanged through the first 40 minutes this morning on impressive early volume (all exchanges) of more than 400,000 shares…

Note: John, Jon and Jon do not hold share positions in GPH.

Gold is pushing higher today after again successfully testing support between $1,440 and $1,450 yesterday…as of 7:30 am Pacific, bullion is up $15 an ounce at $1,467…Silver is flat at $23.95…Copper has gained 9 cents to $3.36 thanks in part to better-than-expected (though suspect) trade data out of China…Crude Oil is 45 cents higher at $96.07 while the U.S. Dollar Index has fallen nearly half a point to 81.87…

Gold remains in a well-defined trading range with strong support at $1,440 and stiff resistance at the Fibonacci $1,484 level…the next significant move in Gold stocks will come when bullion either overcomes resistance or breaks below support, and unfortunately the charts at this time don’t give us confidence in predicting whether bullion is about to push through $1,484 or retreat below $1,440 in the coming days or weeks…watch for clues in how the Venture trades over the next several days as it will often lead Gold…970 is a key level the Venture must overtake in order for this slow recovery since April 17 to pick up steam…the Venture closed yesterday at 961, just a couple of points below where the rising 10-day and declining 20-day moving averages have converged…960 has been rock-solid support over the last 9 trading sessions on a closing basis…970 is resistance, so we need to watch for a move either below 960 or above 970…keep in mind the Venture has not been above its 20-day SMA since January…the next several trading sessions are going to be very important, and a “breakout” by the Venture would be a bullish signal with regard to Gold…

Colorado Resources (CXO, TSX-V) Updated Chart

The recent drilling discovery by Colorado Resources (CXO, TSX-V) in the Iskut River region of northern B.C. and the activity in this stock, and in a few other companies active in the area, has been a bright spot in an otherwise very dull, struggling market…step-out drilling continues at CXO’s North ROK Property, and they’re also drilling their optioned Eldorado Property to the southeast…if Colorado can deliver more outstanding results from North ROK, and perhaps also make some sort of a discovery at Eldorado – in otherwords, if this play really proves out – then the implications for the Venture will indeed be significant and the current malaise could change in a hurry…there’s nothing like a real discovery to boost confidence and bring investors back to the market…below is an updated 6-month daily chart for CXO…after 3 straight days of gains which took the price from 69 cents to an intra-day high of $1.25 on Monday, Colorado pulled back yesterday and fell 15 cents to close at 96 cents…over 36 million shares (all exchanges) have changed hands in CXO over the past 9 trading days, almost the entire number of shares outstanding…if you think this is wild, it’s nothing compared to what could happen if the company starts hitting on step-out holes and that hope is what’s driving this play so far…John has been very accurate with his Fib. levels on this one, so watch for a possible retracement to the low ’80’s before CXO potentially surges higher…as always, perform your own due diligence and don’t invest money you can’t afford to lose…yes, there are huge upside possibilities but don’t ignore the risks either…volatility in CXO will continue to be high…it’s up a dime at $1.06 through the first 35 minutes of trading this morning…

Pacific Potash Corp. (PP, TSX-V)

One of the top performers on the Venture recently has been Pacific Potash (PP, TSX-V) which recently earned a 100% working interest in the Amazonas basin potash claims and completed the acquisition of the Brazilian company Potassio Ocidental Mineracao Ltda. from Western Potash Corp., a move that aid PP immensely as it pursues strategic investment and business opportunities in Brazil…below is a 2.5-year weekly chart…PP closed up a penny-and-a-half yesterday at 15.5 cents, and appears poised to challenge the next major resistance at 19 cents…

China Trade Data Shows Improvement But Export Numbers Raise Doubts

Strong Chinese import growth in April bolstered confidence in the country’s economy but an equally impressive showing for exports was dogged by doubts about the data…imports rose 16.8% in April from a year earlier, up from a 14.1% rise in March and surpassing expectations…a robust appetite for commodities from iron ore to crude oil showed that Chinese domestic demand is reasonably healthy…exports, meanwhile, increased 14.7% in April from a year earlier, speeding up from a 10% pace in March and topping most forecasts…that left China with an $18.2 billion surplus on the month…in normal circumstances the hefty increase in exports would paint a reassuring picture about global demand…but China’s export data have come under close scrutiny because they have differed dramatically from the trends in neighboring countries…moreover, as has been reported recently (and even acknowledged by the Chinese), there is evidence that exporting firms have used over-invoicing on their sales bills to evade capital controls and sneak cash into China…Yao Wei, an economist with Société Générale, told the Financial Times that export growth “continued to look too good to be true”…she noted that while Taiwan reported a 2.7% fall in imports from China in April, China reported a 49.2% surge in exports to Taiwan…meanwhile, Citigroup economist Ding Shuang told the Wall Street Journal that “this is definitely much better than expected…but this probably reflects some over-invoicing (by exporters)…it was inconsistent with cargo volumes at the nation’s ports”…

Today’s Markets Plus Updated Shanghai Chart

Japan’s benchmark Nikkei closed at a fresh near five-year high today after China’s trade balance swung to a surplus in April…Hong Kong shares hit an 8-week high while China’;s Shanghai Composite closed up 10 points to 2246…below is an interesting 1-year daily chart from John…the Shanghai is showing strong momentum and is threatening to break above a down trendline…a strong move through 2250 would be very bullish…

European shares are slightly higher in late trading overseas…meanwhile, the Dow is down 10 points at 15046 as of 7:05 am Pacific after closing above 15000 for the first time ever yesterday…the Dow is off to its fastest start to any year since the dot-com-fueled bull market of 1999…this time around, however, the surge isn’t driven by blind optimism – many investors simply see few alternatives to stocks, and a lot of retail investors are still on the sidelines unlike back in 1999…the TSX is up 79 points…Kinross Gold (K, TSX) reported slightly lower adjusted first quarter earnings this morning as its margins slipped, even as revenue edged higher…Gold production from continuing operations rose 10% to nearly 650,000 ounces, boosted by increases at the Tasiast mine in Mauritania and Fort Knox in Alaska…on a by-product basis, Kinross’s production cost of sales rose to $674 per ounce from $655 a year earlier, but other cost metrics, including all-in-sustaining costs, improved…through the first hour of trading, Kinross is up 18 cents to $5.46 while the TSX Gold Index has climbed 4 points to 196…the Venture has added 5 points to 967…again, keen an eye on that key 970 level…