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October 14, 2011

BMR Morning Market Musings…

Gold has traded between $1,663 and $1,685 so far today…as of 7:55 am Pacific, the yellow metal is up $3 an ounce at $1,670…Silver has gained 27 cents to $32.09…Copper is 9 cents higher at $3.40…Crude Oil  has surged $2.37 to $86.60 while the U.S. Dollar Index is off half a point to 76.67…

The $1,685 area continues to be key for Gold over the near-term…it has been providing stiff resistance lately and it must be overcome for Gold to climb higher…for some possible clues regarding the odds of that, John has prepared an updated chart on the U.S. Dollar which has been weakening recently…

Global stocks surged this morning, extending the biggest weekly rally since July, 2009, as the Group of 20 began talks to tame Europe’s debt crisis…

CNBC has reported this morning that emerging market countries are working on ways to contribute money rapidly to expand the effective firepower of the International Monetary Fund, with the aim of increasing its role in combating the euro zone sovereign debt crisis…the discussions, in parallel with talks in the euro zone about creating a bigger “bazooka” to intervene in financial markets, are aimed at producing a confidence-boosting announcement by the Group of 20 heads of government summit next month…

U.S. consumer sentiment unexpectedly slumped in early October as worries about declining incomes drove consumer expectations back down to the lowest level in more than 30 years, a survey released this morning showed…the Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment sagged to 57.5 from 59.4 the month before…it fell short of the median forecast of 60.2 among economists polled by Reuters…”Overall, the data indicate that a recessionary downturn is likely to occur,” survey director Richard Curtin said in a statement…”Even if the economy manages to avoid the formal recession designation by (The National Bureau of Economic Research), real consumer expenditures will not be strong enough to enable the more robust job growth that is needed to offset the negative grip of economic stagnation on consumer behavior”…

On the flip side, U.S. retail sales rebounded in September at their fastest pace in seven months as consumers shook off some of their concerns about stock market drops and political gridlock…retail sales rose 1.1% from a month earlier, boosted by strong auto purchases, the Commerce Department said this morning…the reading beat the median forecast in a Reuters poll for a 0.7% rise…sales growth during August was revised upward to 0.3%…consumer spending accounts for about two thirds of U.S. economic activity, and the Commerce Department data suggest growth at the end of the third quarter might have been stronger than previously thought…excluding autos, sales increased 0.6% in September, above forecasts for a 0.3% gain…

The CDNX is up 15 points at 1548 as of 7:55 am Pacific…assuming the 1530 area hurdle is successfully cleared on a closing basis, the next major resistance areas for this CDNX rally are 1600 and 1700…even a move to 1700 would not alter the big picture scenario that we now consider to be a bear market…this rally has been on unimpressive volume and has simply been a reaction from conditions that had temporarily become deeply oversold…the 100 and 200-day moving averages (SMA) are entrenched in a firm decline with the 300-day SMA expected to turn south before the end of December…this is not a healthy market and that does not bode well for the broader markets or the global economy…

10 Comments

  1. Hi BMR – I had posted a question/comment about CUI’s performance as of late – do you mind taking a quick peek from yesterday’s comments and provide any meaningful feedback you feel can explain it’s recent slide? Also, is there any way I can access CUI’s current share ownership of the 89 million outstanding shares?

    As we stand, the ask is around 300,000k at $.10 from what I can see, which very much makes me wonder why the seller is in such a haste to dump such a large quantity of shares at already historically low prices. Bids on the flip side have completely dried out. Not good at all.

    Thanks in advance,

    Comment by Alex — October 14, 2011 @ 7:28 am

  2. There is an interview with Frank Basa re gbb on resourceclips.com It seems possible that gbb could turn out to be higher grade than anticipated, deeper down. richard

    Comment by richard — October 14, 2011 @ 9:27 am

  3. GBB – not a peep from them. I though we would at least have had an NR before the wine and dine.
    Looks like rain as well at Granada on Saturday. We can guess what the most common question will be.

    Comment by Rosco — October 14, 2011 @ 10:40 am

  4. LOTS OF POSITIVE ACTION OUT THERE! VENTURE UP 20PTS….CONFIDENCE RETURNING!

    Comment by STEVEN — October 14, 2011 @ 11:35 am

  5. interesting day today. my 6th sense tells me that BER is going down and well SD….better to buy the 6-49, too bad. I would expect some news from GBB next week, and I would expect it to go a bit higher, but it could go down or stay the same. Seems those juniors with little or no cash are going to have a tough time surviving this fall and winter….good buying opportunities coming up on some good properties. Next few months might be hard to stomach for most, but, the focused valued investor will increase their wealth. my 2 bits for the week… cheers

    Comment by alec — October 14, 2011 @ 11:58 am

  6. True that! But I wonder when the confidence in vgd will increase…

    Comment by Kalkan - Sweden — October 14, 2011 @ 12:03 pm

  7. Alex
    CUI shares slipped with the rest of the market. I know of no change to the fundamentals.

    Did you notice that the 298K on the offer was taken out by 2 trades on Friday. To me that is bullish.

    For share ownership I suggest you email the Co. and ask for their est. of the public float.

    Hope this helps.

    Comment by John - BMR — October 16, 2011 @ 4:25 am

  8. Seeing as SH is in the process of carrying out a public execution of it’s site.

    Can anyone please give an update of the goings on at GBBs wine and dine?

    Comment by Rosco — October 16, 2011 @ 5:16 am

  9. Not sure that taking out the CUI asks is a bullish sign. More likely they will just be replaced. The stock is basically at a 52 week low. Looks like it is following the same pattern as ABI Same story unfolding with VGD unfortunately despite a good rally in the markets. The CDNX volumes may not have been high but they haven’t since early Spring!

    Comment by Andrew — October 16, 2011 @ 7:08 am

  10. what are the thoughts on seafield trading almost 750,000 shares and up 3 cents on friday? are people positioning for the up coming drill results or just a correction from the fall from last couple of weeks? with seafield having over 15 million in cash and 1.2 million ounces of gold ( and growing) in the ground this should be worth alot more than the 35 million market cap it currently has.

    Comment by Ed — October 16, 2011 @ 8:00 am

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