TSX Venture Exchange and Gold
The Venture has an excellent chance to post its best month of May since 2009.
Oops! Those who thought it was wise to “Sell in May and Go Away” have made a serious miscalculation (again). That over-used adage simply has no truth to it but has benefited astute investors who have taken the opposite approach, especially during Venture bull market years when any weakness at any point in May has repeatedly proven to be a tremendous accumulation opportunity.
This time around, in 2017, the Venture ended April at 807 and then quickly plunged nearly 5% to a monthly low of 772 on May 9. Those who were panicking and selling in the 780’s and 770’s were simply acting on emotion, not on sound reasoning based on fundamental and technical facts. John’s charts have consistently shown a tremendous band of technical support ranging from 770 to 800, with superb additional back-up strength directly beneath that at the rising 300-day moving average (SMA) which has been the Support off all Supports during Venture bull market years.
Nonetheless, the naïve will do as they please – a fool and his money are soon parted is an expression that holds more truth to it, by orders of magnitude, than “Sell in May and Go Away”.
At many times this month, however, as we pointed out Friday, following the Venture has been like watching paint dry. Good news isn’t impacting most stocks at the moment, but don’t take that as a reflection of the quality of the news, the companies involved or the actual opportunity. It’s just a temporary overall market condition that occurs at various periods, even during the best of bull markets (happened often during 2009 and early 2011). The Venture is a reflection of a lot of things on any given day, including human emotions.
At some point soon, a spark will suddenly ignite the Venture. The Index will put on its dancing shoes and the party will begin in earnest again.
In the meantime, there are some select plays that have been outperforming recently and we’ll be highlighting those in our Sunday Sizzler and Monday’s Morning Musings. Keep in mind, Monday is Memorial Day for our friends in the United States. U.S. markets will be closed and that will impact Venture and TSX volumes.
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