BullMarketRun.ca

Gold has traded between $1,236 and $1,251 so far today…as of 7:30 am Pacific, bullion is down $4 an ounce at $1,239...its weekly close tomorrow will be important…Silver is off 4 cents at $19.81…Copper is flat at $3.16…Crude Oil is up 50 cents at $94.34 while the U.S. Dollar Index is essentially unchanged at 81.12 as it continues to wrestle with the 81 level…

This on-again, off-again game of when the Fed is going to start to “taper” its bond-buying program continued yesterday after release of the October Fed minutes and the mainstream media’s news headlines that followed…there was nothing really new with regard to QE in those Fed minutes as members agreed they would likely start reducing their bond purchases in “coming months” if the U.S. job market improved further, but Gold sold off in another “taper tantrum” and the Dollar Index gained half a point on the view – held by the same people who insisted tapering would begin by September – that there’s an increased chance the Fed will reduce purchases as early as next month…this guessing game will continue and views will change as quickly as a chinook can bring instant warmth to a prairie cold snap…the reality is that the Fed is caught between a rock and a hard place and will have a difficult time weaning itself off the QE drug, particularly at a time of political wrangling in Washington (another debt ceiling debacle could be on its way) and poor federal fiscal policy…

Wall Street Journal ace reporter Jon Hilsenrath had an excellent piece this morning on Fed strategy (“Fed Casts About For Endgame on Easy-Money Policy”), and wrote:  “One scenario getting increased attention at the Fed: What if the job market doesn’t improve according to plan and the bond program becomes ineffective for addressing the economy’s woes?  The minutes showed their solution might be to replace the program with some other form of monetary stimulus. That could include a stronger commitment to keep short-term interest rates low far into the future, a communications strategy known as ‘forward guidance’. Top Fed officials have been signaling in recent weeks that their emphasis is shifting away from the controversial bond-buying program and toward these verbal commitments to keep rates down.”

Today’s Markets

Asia

Asian markets were mixed overnight…Japan’s Nikkei average soared 290 points or 2% to close at 15366…China’s Shanghai Composite, meanwhile, closed relatively unchanged at 2206…a preliminary gauge of China’s manufacturing activity showed a mild weakening of growth momentum in November, weighed down by sluggish new export orders…the HSBC preliminary Purchasing Managers’ Index slipped to 50.4 in November from 50.9 in October…despite the weaker expansion, the result was still the second-best reading in the past seven months…China’s economy showed an upturn in the third quarter, posting year-over-year growth of 7.8% after two quarters of slower growth…the economy is widely expected to top the government target of 7.5% for the full year, but many analysts say growth could slow in 2014…

Europe

European shares were down slightly today…a sign that healing is certainly underway in parts of the euro zone…Greece’s battered economy is expected to emerge from its deep recession and grow slightly next year, the deputy finance minister today, moments after the 2014 draft budget was submitted to Parliament…Greece’s economy has been dependent on international rescue loans since May, 2010, after rising interest rates left it unable to borrow from bond markets…the 2014 budget projects economic growth of 0.6% next year…this year, the economy is expected to contract 4%, slightly less than the originally forecast 4.5%…“For the first time, the major sacrifices made by the Greek people are paying off, with the first signs of recovery this year,” Deputy Finance Minister Christos Staikouras said…“The conditions are being created for Greece’s return to international markets within 2014”…if Greece can fight its way back, there’s obviously hope for the Venture Exchange…

North America

The Dow is up 65 points through the first hour of trading…applications for unemployment benefits in the U.S. declined to the lowest level in almost two months, though this number may have been skewed by the Veterans’ Day holiday…jobless claims in the week ended Nov. 16 dropped by 21,000 to 323,000, the fewest since the week ended Sept. 28, from a revised 344,000 the previous week, the Labor Department said this morning…the median forecast of 47 economists surveyed by Bloomberg called for a drop to 335,000…

The TSX is 26 points higher as of 7:30 am Pacific, while the Venture has gained 4 points to 919…it’s important to note that the Venture’s 100-day moving average (SMA) has reversed to the upside, after being in decline virtually all year, and this positive technical development gives the Venture some helpful additional support at the moment…

Barisan Gold Corp. (BG, TSX-V)

Barisan Gold traded in the “sweet spot” yesterday – right in between the 15 to 20 cent Feb. retracement level – before closing the session up 2.5 cents at 21.5 cents…we’re not too keen on Indonesia, where Barisan recently drilled a whopper of a hole (904 m grading 0.50% Cu Eq, including a zone of 1% CuEq over 262 m), but we can’t help but think speculation (and potential additional results) could drive BG significantly higher before year-end as drilling continues at the Upper Tengkereng prospect…the company has not yet drilled down to the potassic zone and associated bornite mineralization of the Upper Tengkereng porphyry system where higher grades are usually intersected, so this has a chance of getting a lot more interesting in the weeks ahead…

Technically, BG has been slowly unwinding an overbought condition that emerged just recently when the stock climbed as high as 33 cents where it met Fib. resistance…that was also a nearly 2-year high for the stock…so right now, strong support exists between 15 and 20 cents, while resistance is in the low 30’s…a breakout through the low 30’s would suggest a move to Feb. Set #2 as outlined by John in this 2+ year weekly chart…as of 7:30 am Pacific, BG is up a penny at 22.5 cents…

LXV Ventures (LXV, TSX-V)

Fib. levels worked well with LX Ventures Inc. (LXV, TSX-V) yesterday as it confirmed Tuesday’s breakout above the important Fib. 46-cent level…the social media darling closed 13.5 cents higher at 61 cents, a 43% premium to the financing price announced November 15…below is an updated 2.5-year weekly LXV chart from John including a new Fib. level to watch for…RSI(14) at 82% is in overbought territory, so there will be volatility and traders do need to be careful…as we noted yesterday, though, LXV does have some power behind it…as of 7:30 am Pacific, it’s up 3 cents at 64 cents after climbing as high as 68 cents…

Magor Corp. (MCC, TSX-V)

A technology play that hasn’t had its day in the sun yet is Magor Corp. (MCC, TSX-V), though it is showing signs of turning the corner…Magor has an all-star team behind it that includes some of the key players that built Newbridge Networks…MCC is now in the process of launching its Aerus cloud-based video collaboration services through major global carriers and solutions integrators, and if this launch is successful – watch out…the potential profit margins in this are high and MCC will take off if Aerus gains traction…

Technically, MCC’s 50-day moving average (SMA) is now reversing to the upside and that’s a strong clue that this play could finish the year on a very positive note…volume needs to pick up substantially…40 cents is key resistance at the moment…RSI(14) is showing momentum…MCC closed yesterday at 38 cents (no trades yet this morning)…

Zenyatta Ventures Ltd. (ZEN, TSX-V)

Zenyatta Ventures (ZEN, TSX-V) managed to hold critical support at $2 in October, and we’ll now see how it handles Fib. resistance levels in the $3.30’s and $3.70’s…ZEN is off 6 cents at $3.34 as of 7:30 am Pacific…RSI(14) is showing strong momentum on this 6-month daily chart…support around $3…

Note: Jon holds a share position in MCC.