Weakness continues in Gold after yesterday’s sell-off that sent it below important technical support in the low $1,600’s…the yellow metal hit a four-month low this morning of $1,577 and is currently down $19 an ounce at $1,586 (as of 6:00 am Pacific)….Silver is off 58 cents at $28.91…Copper is down a nickel to $3.65…Crude Oil is $1.16 lower at $95.85 while the U.S. Dollar Index has gained another one-quarter of a point to 80.14…
While Gold has certainly suffered some short-term technical damage, which potentially could lead to a test of the December low of $1,525 if the $1,600 area can’t hold on a closing basis, it would take a move below $1,500 to call into question the overall long-term bull market – and that seems highly unlikely for a host of both fundamental and technical reasons…so for now this has the “look and feel” of other final pushes to the downside witnessed in previous major corrections with no reason to push the panic button…
Outlook For Canada Bullish – Royal Bank Chief
Royal Bank of Canada chief Gordon Nixon says he is “incredibly positive” about the outlook for the Canadian economy despite the problems bubbling up around the globe…“The next number of years is going to be a difficult period for the world,” the CEO told a Bloomberg conference in Toronto…however, Canada “is incredibly well positioned” because of its fiscal flexibility, low tax rates, natural resources, strong financial sector and growing industrial sector…
Canadian Housing Starts Higher
Canada Mortgage and Housing Corp. data released this morning show overall construction starts in Canada were up 14% last month to a seasonally adjusted annual rate of 244,900, the highest since September, 2007, and an increase from the March pace of 214,800…a surge in condominium construction helped boost the numbers…
Today’s Markets
European shares have extended their losses this morning with euro zone banks hit by expectations Spanish lenders would face new cash calls and ongoing concerns about the political impasse in Greece…China’s Shanghai Composite fell 40 points or 1.65% overnight to 2409, while stock index futures in New York as of 6:00 am Pacific suggest a possible 1% drop at the open on Wall Street…
Some panic selling definitely gripped the Venture Exchange yesterday as it plunged through the late April low of 1363 and closed at 1338…next support is obviously at the 1300 level which held last October…below is an 8-month weekly chart from John which shows that RSI(2) is at levels indicative of a market low – RSI(2) is telling us that it makes much more sense to be a buyer at the moment as opposed to a seller…
The U.S. Dollar and the euro are being watched closely at the moment…Gold appears to be mirroring movement in the euro which continues to be under pressure and is likely to test a support band between 126 and 129 (it’s at 1.2934 as of 6:00 am Pacific) as John’s chart shows below…
The U.S. Dollar Index, meanwhile, is at a critical juncture…it’s fighting resistance at the 80 level, but a close above that would likely add some fuel to the fire (“false” breakout above 80?)…however, RSI(2) is at extreme levels which suggests the Index’s upside potential is limited at the moment…
Andrew – why would you want me romoved as a poster because I make a simple comment that CEV could see .48 before it rebounds? I don’t understand
Comment by dave — May 9, 2012 @ 5:18 am
BMR,
Do you think your charts have helped you so far..?
When do you call a pig a pig?
TSX-V will breake 1300 easily
Comment by Mr Chart — May 9, 2012 @ 5:26 am
Dave
I think there’s a mix up in post numbers, i don’t think Andrew wanted you banned.
Anyway, as for the CEV gap up, if it’s the same one i am looking at, it’s been
filled sometime later. By the way, most gaps are filled, but some are never
filled. R !
Comment by Bert — May 9, 2012 @ 5:27 am
Dave – no it wasn’t your post. There were two posts by Kent that were offensive and they were removed. Sorry for any confusion, I enjoy your posts. 🙂
Comment by Andrew — May 9, 2012 @ 5:32 am
I agree Bert not all gaps get filled and the one Oct 24-25 hasnt been filled and I hope it isnt….but that being said Ill put a stink bid in
Comment by db — May 9, 2012 @ 5:52 am
Anglo Swiss to Prospect its Blu Starr Graphite Property in Southeast BC
Comment by Andrew — May 9, 2012 @ 5:53 am
Its only a matter of time before BCs graphite potential starts to get noticed…
Comment by db — May 9, 2012 @ 6:03 am
CEV
The gap i was talking about was earlier than that & i don’t see one on Oct. 24/25. Are
my eyes failing me ? Guess we will leave it at that. I am pleasantly surprised this
morning, seeing a lot of green. Will we have a good close, i think so. R !
Comment by Bert — May 9, 2012 @ 6:08 am
Bert – it’s a 1/2 cent gap in CEV, but RSI would have to be very low to fill it – I think. A gap in RBW too, so hoping that one doesn’t get filled either.
Comment by Andrew — May 9, 2012 @ 6:10 am
Kootenays looking attractive and clearly resource rich; just unfortunate that there are so many headwinds around the world.
Comment by Andrew — May 9, 2012 @ 6:12 am
Eric coffin in “the gold report” interview,lets pray he is right!!!:
I’ll just leave you with a contrarian thought: Everybody’s so negative right now because this is what bottoms look like. Everybody thinks the world is coming to an end. Everybody thinks it’s the worst market they’ve ever been in. Everybody thinks nothing is ever going to go up. That’s what a bottom looks like. It’s not fun to go through. There’s so much negativity everywhere that it’s telling me as a contrarian that there’s probably not a lot more pain to go through before things start getting better.
Comment by mike — May 9, 2012 @ 6:21 am
News out from ASW on Blu Starr……the flake graphite potential of the West Kootenays has clearly been overlooked, especially when one considers Eagle Graphite is one of only two producers in North America……
Comment by Jon - BMR — May 9, 2012 @ 6:45 am
Jon – any chance of a précis on ASW and Black Smoker Ventures regarding graphite if you’ve been looking at them? Thanks.
Comment by Andrew — May 9, 2012 @ 7:14 am
Eric Coffin
That’s one of the Yukon believers.
Comment by Bert — May 9, 2012 @ 7:29 am
DVV
Driven applies for drill permit at Blackwater East
Comment by Bert — May 9, 2012 @ 7:37 am
Jon – BMR or anyone else
appreciate if you could identify other graphite situations in B.C.
thanks
Comment by ChartTrader — May 9, 2012 @ 8:17 am
EAS – watch this one closely. Rumored a change in presidency in Indonesia. 3.1 mil ounce deposit and growing. house buys at the ask all day. House 1, 33, 99.
She was a buck in Feb. – She can move up to .50 plus quick.
Comment by dave — May 9, 2012 @ 8:23 am
FGR- FIRST GRAPHITE CORP has claim adjacent to Eagle Graphite along with one in Manitoba and Quebec. only 20million SO
Comment by db — May 9, 2012 @ 8:29 am
EAS – Dave is there a near term catalyst for the SP? Seems like a well diversified company but SP has declined over the past couple of years.
Comment by Andrew — May 9, 2012 @ 8:40 am
EAS – yes, the new president elect is mining friendly. EAS will be able to continue and develop into a mine. I just got a phone call. The volume on 05-02 was in anticipation. I just heard its a landslide for the new president to get elected. They will announce on May 17. This is probably the reason for the volume today. Houses 1, 33, 99, buying at the ask all morning. These houses don’t buy for pennies. I got in at .36 Good luck gang what ever you challange to buy. Off to work. Later
Comment by dave — May 9, 2012 @ 8:59 am
Thank you – Dave, I appreciate your input. Enjoy the day. 🙂
Comment by Andrew — May 9, 2012 @ 9:05 am
Bollinger band show heavily oversold conditions in the gold stocks and as a result we got a bit of a pop in most gold stocks today. I would expect a bit more of a rally before we continue to the downside for a final capitulation. I think 1500-1550 in gold is not out of the question.
K, OSK, G, ABX are all screaming buys with levels not seen since 2009. There could be a bit more downside, but easy pickens right now for those with cash. Use options to leverage your trades in the large cap gold stocks.
1300 on the venture should be tested here soon unless there’s a surprise in monetary policy out of the EU, China or US that will drive commodities higher. Otherwise the bad news will continue downward pressure on equities and especially commodities. Risk is OFF.
Comment by Andrew M — May 9, 2012 @ 2:16 pm