BullMarketRun.ca

Gold has traded between $1,643 and $1,665 so far today…as of 8:30 am Pacific, the yellow metal is down $8 an ounce at $1,647…Silver is off 61 cents at $31.43…Copper has declined 8 cents to $3.29…Crude Oil is up 11 cents at $88.45 while the U.S. Dollar Index is off one-quarter of a point at 76.88…

Markets remain focused on the euro zone debt crisis ahead of this weekend’s EU summit in Brussels…as we’ve seen in the United States, it’s hard enough for just one government to get its act together…in the case of the euro zone, there are 17 individual governments at the table which is why there has been a history of disappointments regarding the handling of this problem…the bar has likely been set too high for a “solution” this weekend and markets could easily react to the downside Monday morning…

Demonstrators today threw stones and gasoline bombs at police outside parliament in Athens, Greece, during a two-day general strike that unions have described as the largest in years…the protest, which has grounded flights, disrupted public transport and shut down shops to schools in Greece, comes ahead of a parliamentary vote on a fresh package of tax increases and spending cuts required by international creditors in return for crucial bailout cash…deputies are due to vote tonight after a first reading of the austerity package, which has to be legislated before Greece can draw down the next tranche of its current EU-IMF bailout loan…a second vote is set for tomorrow, after a clause-by-clause discussion…the governing socialists are still expected to secure a narrow majority to push the legislation through…

U.S. consumer prices outside food and energy rose at their slowest pace in six months in September as the cost of apparel and used vehicles fell, suggesting inflation pressures remained contained…another report today showed groundbreaking on new homes rose at the fastest rate in 1-1/2 years, though most of the gains came from the often volatile multi-family construction…

In some surprising news that has put considerable pressure on the TSX Gold Index today, Agnico-Eagle Mines Ltd. (AEM, TSX) is suspending mining operations and Gold production at its Goldex mine near Val-d’Or effective immediately…this decision follows the receipt of an opinion from a second rock mechanics consulting firm which recommended that underground mining operations be halted until the situation is investigated further…it appears that a weak volcanic rock unit in the hangingwall of the Goldex deposit has failed…this rock failure is thought to extend between the top of the deposit and surface…as a result, this structure has allowed groundwater to flow into the mine…this water flow has likely contributed to further weakening and movement of the rock mass…the company will assess the potential for restarting the mining operations next year on the western side of the deposit where the ore zone is narrower and still considered to be relatively stable; however, there is no guarantee that this will occur…as a result, Agnico-Eagle is writing off its investment in Goldex which has been one of the lowest cost producers in the industry…it’s expected that this will total approximately $260-million (or approximately $170-million after tax, or $1 per share) and will occur in the third-quarter 2011 financial results, scheduled for release October 26…AEM is getting hammered today, down nearly 20% to around $47 a share…meanwhile, Osisko Mining (OSK, TSX) has been halted pending news…

The CDNX is off 6 points at 1546…John’s 10-year chart below shows how the Index sits today – at support and the support is holding so far…hammers are prominent on this monthly chart, and the case for additional strength/ bullishness this quarter following the October 4 low is strong…however, our “big picture” interpretation is that the CDNX has shifted from a bull market to a bear market phase though the Index hasn’t yet received a final knockout punch…throughout this year the CDNX has significantly under-performed both the broader markets and Gold, a worrisome sign going into 2012 (the situation was reversed last year)…traders/investors need to use their own judgement in terms of how to handle any potential additional gains or an uptrend in the coming weeks with the CDNX, but our stance remains very cautious…this is not an easy market to trade at the moment and liquidity just isn’t what it was earlier this year and throughout 2010…bear markets are notoriously deceptive, so be careful…cash is probably King and political dynamics around the world are not supportive of a bull market environment for equities at the moment and going into 2012…