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7 @ 7:00 - BullMarketRun.com

February 9, 2018

7 @ 7:00

Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information.

1. Gold has traded between $1,312 and $1,321 so far today…as of 7:00 am Pacific, bullion is off $5 an ounce at $1,314…Silver has slid 15 cents to $16.24…Copper is off 2 pennies at $3.08 while Nickel has retreated 9 cents to $5.85…Cobalt has hit a new decade high of $36.97 while the U.S. Dollar Index is up one-fifth of a point at 90.36…meanwhile, Oil prices are down for a 6th straight day and are on track for their biggest weekly loss in 10 months…Crude is currently off another 90 cents a barrel at $60.25…the pullback is due in part to an overdue technical correction and fresh concerns regarding record-high U.S. Crude output…U.S. production hit 10.25 million bpd for the most recent week…meanwhile, an outage on a key Oil pipeline in the North Sea proved short-lived and OPEC member Iran announced plans yesterday to increase production within the next 4 years by at least 700,000 barrels a day…a strong U.S. and global economy, however, will keep Oil demand buoyant…

2. Goldman Sachs remains upbeat on commodities despite recent softness that has occurred simultaneously with the correction in the broader U.S. equity markets:  “Ironically, the catalyst for the equity move was rising inflation concerns in the face of strong economic activity indicators, which further reinforces our view that commodity markets are set to outperform other asset classes once the current liquidation flows subside. As is the case for equities, we view this move as primarily positioning, technical and U.S. dollar driven, with the magnitude of the declines well correlated to both the strength of the prior price trend and the level of speculative length. Despite the sell-off, we find that recent fundamental data is still supportive of our constructive view on the asset class.”

3. The return of trillion-dollar U.S. budget deficits adds to the swamp in Washington instead of draining it:    President Trump signed a major budget plan into law today, ending the year’s second government shutdown just hours after it started…both chambers of Congress passed a short-term funding bill in the wee hours of the morning and cleared the way for a massive boost to military and domestic spending hours after funding lapsed at midnight…the House Freedom Caucus, the chamber’s fiscally conservative wing, said in a statement that “growing the size of government by 13%…is not what the American people sent us here to do.”  Republican Senator Rand Paul added, “I ran for office because I was very critical of President Obama’s trillion-dollar deficits.  Now we have Republicans hand in hand with Democrats offering us trillion-dollar deficits. I can’t in all honesty look the other way.”  In other to reverse the accelerating deficit trend, politicians will eventually be forced to address the thorny issue of entitlement programs which make up most of the federal government’s runaway spending…

4. The Canadian economy lost the most jobs in 9 years in January, solidifying expectations the Bank of Canada will hold interest rates steady next month…the 88,000 job decrease fell well short of economists’ forecasts for a gain of 10,000 and was the biggest decline since January 2009 when the economy was dealing with the global financial crisis, Statistics Canada reported today…the drop was driven by a whopping 137,000 decline in part-time work, the biggest on record and likely due in part to Ontario’s insane decision to hike the minimum wage by 20% January 1…average hourly wages in Canada jumped 3.3%, the strongest since March 2016, while the national unemployment rate rose to 5.9% from December’s revised 5.8%…

5.  In the 1980’s, Pierre Trudeau’s ill-advised National Energy Program inflicted economic havoc on Western Canada and led to a national unity crisis…today, Justin Trudeau’s radical climate change agenda is the New National Energy Program and more scary aspects of it were introduced yesterday in sweeping environmental and regulatory reforms of big resource projects…the devil is in the details, as the saying goes, and Mother Earth Minister Catherine McKenna laid out a mammoth 341-page document that the feds admit will cost at least $1 billion to implement once the bill is approved by Parliament…Canada, it appears, will become the only country in the world with national assessment legislation that requires the government to consider “sustainability” and climate change commitments (Paris agreement that the United States has withdrawn from) when deciding whether to approve a project or not…quite simply, the “reforms” reflect many of the environmental lobby’s priorities and even include a “gender-based analysis” that will also take place on every project…meanwhile, the feds’ proposed regulatory overhaul has immediately given more ammunition to B.C. Premier John Horgan in his government’s battle to illegally thwart the already approved Kinder Morgan Pipeline expansion.  “Does this say the processes that were in place yesterday were adequate?,” Horgan asked.  “Clearly, the federal government doesn’t think so.  Many British Columbians don’t think so.”

6. A damning indictment of how Canadian governments, federal and provincial, are eroding business/investor confidence through high taxation and over-regulation – the top executive at Canada’s largest integrated Oil company said in an earnings call yesterday that he would not embark on major new projects in the country because of burdensome regulations and uncompetitive tax rates…Suncor Energy (SU, TSX) President and CEO Steve Williams said his company would pare back spending in future years partly because Canada is not as competitive as other countries.  “We’re having to look at Canada quite hard. The cumulative impact of regulation and higher taxation than other jurisdictions is making Canada a more difficult jurisdiction to allocate capital in,” Williams said…

7.  It’s not all doom and gloom this morning…the fact that the Venture, a reliable leading indicator, is actually steady this week while the Dow is experiencing its worst week since the financial crisis can only be construed as a positive sign that equity markets will behave much differently over the 2nd half of the month…fears about inflation and soaring bond yields sent the Dow plunging 6.5% through the first 4 days of this week…the S&P 500 has shed 6.6%, its second-worst week since 2008…both are rebounding in the first 30 minutes of trading this morning…however, our Dow chart suggests a test of the 23,000 area is necessary and that would mean a decline of as much as another 1,000 points or so with the Dow at 24,125 as of 7:00 am Pacific…the lack of a meaningful correction over the past couple of years has made this one seem more shocking than it really is…the TSX, still in deeply oversold conditions, is up 22 points while the Venture is off 1 point at 818 after closing last Friday at 812..cannabis companies that do business in the United States can keep listing, trading and clearing their shares in Canada…the Canadian Depository for Securities said yesterday that it’s not in its mandate to judge any of the companies that have been allowed to list shares on any of Canada’s stock exchanges…the news will be a boost to almost two dozen public firms that operate in the United States and are listed today on the Canadian Securities Exchange…

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  1. Jon,
    Cobalt is $36.97 now. perhaps going up too rapidly to keep track of lol.

    Comment by TradingAgent — February 9, 2018 @ 9:13 am

  2. Feeling sorry for my Northern neighbors….

    Comment by flyinthruu — February 9, 2018 @ 9:13 am

  3. Is spoofing as recently reported by the US Commodity Futures Trading Commission (CFTC) and their $47 million fine or like trading responsible for the volatility and major drops in shares on the TSX-V exchange

    Comment by ogie1 — February 9, 2018 @ 10:26 am

  4. Jon, are we due for a bounce back in the GGI share price? Not really enjoying the slow and painful descent the share price is going thru. I thought John’s last chart indicated we were oversold and due for a bounce.

    Comment by pole — February 9, 2018 @ 10:32 am

  5. Obviously we’re dealing with volatile overall markets at the moment, pole, but GGI remains in its broad support band as per John’s latest chart and the kick-off to 2018 exploration could come sooner than most think…stay focused on the big prize.

    Comment by Jon - BMR — February 9, 2018 @ 10:56 am

  6. anyone got the spare cash to take out BMO offer of 150K at 2.11 on GGI – that would set a new bottom

    Comment by david — February 9, 2018 @ 10:59 am

  7. Thanks for that Jon. I guess I just needed some positive reinforcement. Deep down I know good things are coming our way with GGI.

    Comment by pole — February 9, 2018 @ 11:05 am

  8. Jon,
    regarding CSR, how quickly can CSR be changed to Canada Cobalt Works after the vote? would it take a day… or a week?

    Comment by TradingAgent — February 9, 2018 @ 11:40 am

  9. They would inform the Exchange the next day, TradingAgent, which will be next Friday, and the new name and new symbol would be effective within just several days after that, so sometime the following week.

    Comment by Jon - BMR — February 9, 2018 @ 12:23 pm

  10. Jon,

    I’m new to mining. You said kickoff for 2018 exploration could be sooner than people think. Can you tell me what arepeople’s expectations regarding the kickoff for 2018? It would be easier picture the time frame. Thanks!

    Comment by sweetbabyjesus — February 9, 2018 @ 7:59 pm

  11. Jon and John, can you explain the technical side of things for CSR? Had a minor push down at end of day – pretty good volume. Thinking this will stop once name change happens and news flow since momentum will definitely be swinging the other way? Seems like it’d be risky to keep doing that..

    Comment by flyinthruu — February 10, 2018 @ 6:36 am

  12. We’ll go thru that in our Sunday Sizzler, flyinthru; primary uptrend from a technical perspective, best fundamentals in company history, undervalued vs. peers, and Cobalt prices at new decade highs – that’s the big picture.

    Comment by Jon - BMR — February 10, 2018 @ 7:46 am

  13. Thx Jon. Not worried about company. Just like to better understand all the ins and outs – education!!

    Comment by flyinthruu — February 10, 2018 @ 8:24 am

  14. Jon some positive news releases from GGM. SP is starting to move a little as well. Might be getting ready for a decent move. Also like the look of ANX.

    Comment by Patrick — February 11, 2018 @ 3:45 am

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