BullMarketRun.ca

Gold had traded as high as $1,666 this morning but has pulled back over the last half hour or so…as of 9:30 am Pacific, the yellow metal is now down $11 an ounce at $1,639…Silver almost hit $33 but is now down 57 cents at $31.36…Copper has gained 4 cents to 3.31 while the U.S. Dollar Index is now well off its lows and down just one-tenth of a point at 78.53…the greenback has been quite strong since the beginning of September, trading in a bullish upsloping channel as John shows below in a chart that was completed after yesterday’s trading..the Dollar Index tested the bottom of that channel this morning and should be monitored closely in the days ahead for clues regarding the near-term direction of the markets in general as well as Gold…

Stocks have given up their early gains as ongoing worries over the euro zone overshadowed a better-than-expected jobs report out of the U.S. this morning…after plunging to an intra-day low of 1306 Monday, the CDNX has gained more than 13%…it traded as high as 1497 in early trading but has since pulled back to 1477, a loss of 3 points…the Venture’s 10-day moving average (SMA), at 1470 entering today, has generally provided resistance since the spring of this year – just the opposite of the situation throughout 2010 when the 10-day was generally a supporting moving average…in otherwords, any rallies in what we now view as an overall bear market are going to have difficulty punching through or much beyond the 10-day SMA…in addition, the CDNX has other technical hurdles – 1530 is a major one – as John outlined in his chart posted prior to the market open…so we don’t view the move since Tuesday as a reversal in what has to be regarded now as an overall downtrend…investors should continue to exercise caution as September’s action has convinced us that protection of capital is paramount during what will likely be a very volatile and perhaps bloody six months coming up…not everyone shares that view but that’s what makes a market…

There was news on the jobs front in both Canada and the United States today…the Canadian economy churned out 60,900 jobs last month, quadruple expectations, all in full-time positions…the jobless rate also fell to 7.1%, its lowest level since October, 2008…however, most of those job gains were in the public sector – private sector job growth actually declined which is not a good sign…we need to see the reverse of that – retrenchment of the public sector in conjunction with private sector job growth…

Meanwhile, the monthly non-farm payrolls number in the U.S. grew more than expected in September, jumping 103,000, though the unemployment rate remained steady at 9.1%…economists polled by Reuters expected a total of 60,000 jobs to have been created…the jobs report, which also included an upward revision of the August payroll number, is the latest in a string of encouraging economic data that has come out of the U.S. in recent days which has helped to give the market a lift..however, as former Federal Reserve Chairman Alan Greenspan stated in an interview today with CNBC, the U.S. economy and the stock market face potential severe consequences from the European financial crisis which, according to Greenspan, will not resolve itself without major debt restructuring…

Ontario voters elected a minority Liberal government last night in an election that was Tim Hudak’s to lose and he did exactly that by not offering a bold vision for the future…despite a massive run-up in provincial debt and a failed green energy plan, Premier McGuinty amazingly was able to win a third consecutive term in office though his party lost 19 seats and is one seat short of a majority…minority governments (even “strong” minorities) are notoriously unstable which is not helpful for Ontario in these turbulent economic times…in addition, the resurgent NDP is sure to have increased influence at Queen’s Park…if the PC’s choose to oppose the Liberals consistently, McGuinty will have to look for the NDP for support which will create a right-left dynamic in Ontario politics…