BullMarketRun

Gold is bouncing back after some profit-taking yesterday…as of 5:40 am Pacific, the yellow metal is up $13 an ounce at $1,743…Silver has gained 21 cents to $33.71…Copper is up 2 pennies to $3.85…Crude Oil is $1.23 higher at $100.01 while the U.S. Dollar Index (new chart below) has lost one-fifth of a point to 78.93…

Strong Finish To January In The Markets

U.S. stock index futures, as of 5:40 am Pacific, indicate a positive open for Wall Street this morning ahead of a slew of earnings and as hopes rise for a deal between Greece and private sector creditors on restructuring some of the country’s debt…European stocks are higher on the same hopes and as leaders in the EU signed a pact to bring tighter budgetary discipline to the euro zone…

On the macroeconomic front, investors will be watching the S&P/Case-Shiller Home price index, due to be released at 6:00 am Pacific, for signs of life in the U.S. housing market…

Bullish Signs In Emerging Market Currencies & Equities

The Financial Times reports this morning that emerging market currencies are on track for their best start to the year since the turn of the century as risk appetite among investors improves….the Mexican peso, Brazilian real and Indian rupee have outstripped currencies in the world’s most industrialized nations to gain more than 5% against the U.S. dollar this year, bouncing back from sharp falls in recent months….the peso and the rupee have both risen 7% this month against the dollar, while the real and the Russian rouble are up 6% since the start of the year…

Meanwhile, investors poured more money into emerging market equity and bond funds last week than at any time since April last year, according to EPFR Global, a data provider…the dollar-denominated MSCI emerging markets’ equities index, which lost 21% in 2011, is up 10.2% this year…

Another View On China

A senior International Monetary Fund official said yesterday that China was taking steps to reduce property bubble risks and said it has room to add fiscal stimulus if conditions worsen…”China can move away from its reliance on external demand and needs to build up domestic demand,” said Anoop Singh, the IMF director for Asia and the Pacific at a news conference…he said Beijing was working on measures to stimulate demand…”We don’t see (a) hard-landing risk as likely,” Singh added, noting property prices were moderating and sales volumes declining…”Our sense is that these risks are being addressed and our prediction is clear: that growth will remain above 8% at the baseline and that if there were to be greater risks externally China has sufficient fiscal space to respond”…

Venture Exchange 50-Day SMA Reverses To Upside

A very important technical event with the CDNX is now unfolding as its 50-day moving average (SMA) is reversing to the upside in a pattern similar to that seen in January, 2009, and September, 2010…this is hugely significant and should be followed in a month or so by a reversal in the 100-day SMA which has been in decline since May of last year…too many investors have still not clued in to what’s happening…the “trend is your friend”, as the saying goes, and the trend has definitely reversed after months of weakness and frustration…

Finding The Right Play

This is a time, a defining turnaround moment in the markets, when fortunes are born if you’re invested in the right plays in the speculative junior resource space…that’s another reason we’re so bullish on Rainbow Resources (RBW, TSX-V) which is essentially a former “shell” that is cashing up at the right time after vending in a major project through a transaction with a private exploration company (Braveheart Resources)…in situations like this, “smart money” loads up (through a strategic PP and in the open market) with the aim to get returns on their investment of at least 5 to 10 times what they put in…they don’t think in pennies like most retail investors…they think BIG and that’s why a guy like Bob Libin is a multi-millionaire and part-owner of an NHL team…so at BMR, we’re not playing for pennies with regard to Rainbow…given the people involved and the merit of the properties, we’re hugely confident RBW is a major home run opportunity and we’re prepared to hang our hats on it…at yesterday’s close of 21 cents, the current market cap is only $5.5 million…

For those who are focused only on the very short term, John’s latest RBW chart shows two initial Fibonacci levels – 25 cents and 36 cents…”Wave 1″ in RBW’s move, from a technical perspective, has not even concluded yet…

Note: Both John and Jon hold positions in RBW (Terry does not) with Jon adding to his position again yesterday.

Adventure Gold (AGE, TSX-V)

Adventure Gold remains one of our favorite plays due to its management and impressive portfolio of properties which includes the Pascalis-Colombiere Gold Property (the company’s flagship project) immediately adjacent to Richmont’s (RIC, TSX) Beaufor Mine…we are working on an article regarding AGE after a visit to Pascalis reconfirmed our bullish views regarding this property and former producer near Val-d’Or…below is a picture we took of some outcrop mineralization from a very interesting new area at Pascalis the company is exploring (about 1.2 kilometres northwest of the shaft of the former L.C. Beliveau Mine)…work by AGE last summer led to the discovery of a high-grade Gold-copper-silver showing north of the previously reported Highway Zone…the company’s exploration team made this new discovery while performing a mechanical stripping program…grab samples collected within the new mineralized zone returned up to 4.7 g/t Au 11.4% copper and 112 g/t Ag as reported by AGE October 26…what this demonstrates is that the Pascalis mineralized system is quite possibly larger and perhaps richer than originally thought…last year’s drill results were very positive and the company is gearing up for another drill program…

AGE closed at 43 cents yesterday…we believe it’ll be a strong year for Adventure Gold which raised $1.75 million at the end of December in a non-flow-through financing above the market price…

Additional Charts

John has two additional charts this morning…Geologix Explorations (GIX, TSX-V) traded a whopping 29 million shares Friday (all exchanges) and closed yesterday on the Venture down half a penny at 30 cents…on January 17 the company reported very encouraging drill results from its Tepal Gold-Copper Porphyry Project in Mexico…put GIX on your “radar screen” and, as always, perform your own due diligence…

Note: John, Jon and Terry do not hold positions in GIX.

We regularly monitor the important  U.S. Dollar Index, so below is John’s 2.5-year weekly chart update…

Part 1 of 2

Anticipating a turn in the market at some point during 2012, the BMR crew spent a great deal of time during the fourth quarter of last year searching for a very special speculative situation in the Gold and Silver space on the Venture Exchange that we could put forward with great confidence to our readers for their due diligence.  We were looking for the following:

1. A relatively new company:  Essentially unheard of with no “baggage”,  trading under 25 cents with a $5 million market cap or less;

2. Superior management: Motivated, successful leaders who truly understand the capital markets and how to run a business, build a business and drive shareholder value – reputable individuals who have excellent track records and a strong desire and incentive (by being personally invested) to make their deal work immediately and over the long-term.   Must be good communicators;

3. Attractive share structure: Low market cap (around $5 million) with less than 30 million shares outstanding and insiders holding at least 20%;

4. A high-quality land package: Properties must be in a favorable jurisdiction in North America that has had some past production with exciting historical results and “blue sky” potential, in addition to the strong possibility of at least one more major project;

5. An overall strong “story”: Most CDNX companies fail to realize that they’re not only in the mining industry but they’re also in the entertainment business.  Shareholders want progress on the ground, a company that provides excitement and a story that comes to life through the passion of those involved and an effective communications strategy;

6. A favorable chart – technical considerations are always important.

If you’re lucky enough to find a situation that meets all of the above criteria, then chances are you’re going to make some money and perhaps bucket loads of it – especially in a bullish market like we expect for 2012.  We have seen many companies with great potential “flame out” simply because management has messed up in terms of execution on the ground or in the market.

The little-known company we picked to rise up and become a potential market leader in 2012 was Rainbow Resources (RBW, TSX-V) and we’re very happy we found it.  It’s off to a great start in 2012.  Our due diligence included a site visit, meetings with management and discussions with others who knew management in order to verify qualifications and integrity.

David W. Johnston, President of Rainbow Resources, headed up the private company (Braveheart Resources) that Rainbow did a share transaction with in the fall of last year.  A former miner, Johnston has a broad range of experience and is well respected in Calgary for his business success and charitable work.  One of his good friends, now a director of Rainbow, is Bob Libin, part-owner of the NHL’s Calgary Flames.

The key to understanding Rainbow and the opportunity it presents is knowing at least a little bit about the background of Johnston and Braveheart Resources, the private company he formed quite a few years ago that began mineral exploration in the West Kootenays in 2006.  Johnston’s good luck in securing strategic and valuable crown grants at the International Property, followed by some hard work and careful due diligence, allowed Braveheart to assemble a first-rate land package that it worked on for several years in order to advance it to drill-ready stage.  Braveheart “married up” with Rainbow last fall after Rainbow director Jim Decker, who was a central figure in the Grande Cache Coal success story, saw what Johnston had put together.  Decker is a mining engineer who consults for several majors and knows something good when he sees it after more than three decades in the business.

“One of the ways the asset was built in Braveheart is that we never had one penny of debt all the way through,” explained Johnston, a director with the Chamber of Mines for eastern British Columbia, during an interview with BMR last week at the Resource Conference in Vancouver.  “We never borrowed a penny from any financial institution.  As the project progressed, we sold shares at 10 cents to family and friends and associates as we were allowed to do.  During that time it was not only good luck and hard work but meeting people along the trail who came in and added value, human value.  We coasted through the 2008 meltdown.

“I think my son and I have been in every adit in the Slocan Valley,” added Johnston, “and the potential we see for this region is absolutely enormous.  Since 2006 we have been very active in the area and have focused on a rich geological environment.  We worked the properties.  We filed our assessment work diligently and did all of our reporting.  We are well known to government officials in the area and in the mining office in Cranbrook.  My son runs our Nelson exploration office.  He’s a prospector.  We’re homeowners, landowners and taxpayers.  We pay our bills and we’re known in the community.”

Braveheart’s work and reputation has allowed Rainbow to hit the ground running with an aggressive exploration program and a planned major drill campaign.  The six properties that form the company’s “Big Strike” Project have never been drilled before.

A major pending development for Rainbow, and a potential catalyst as far as a share price breakout is concerned, is the upcoming NI-43-101 report from Moose Mountain Technical Services (the company’s geological consultant) on all the historical as well as recent work (by Braveheart beginning in 2006 and Rainbow in the fourth quarter of last year) performed on the various properties.  This should be comprehensive and perhaps mouth-watering given the history of some of these properties (Ottawa, for example, produced 2 million ounces of Silver in the 1900′s – mostly in the early 1900′s -  at a grade of approximately 2,000 g/t Au or 75 ounces per tonne according to data from B.C. Energy and Mines.  It was the largest producer in the Slocan Valley and lead, zinc, gold and copper were also mined).

The International, meanwhile, was a significant discovery in the early 1900′s that didn’t get developed because of access issues, world events (the Depression, World War 2, periods of commodity weakness) and the fact the crown grants were simply in the wrong hands until Johnston was able to secure them.

“You can go to the Spokane Chronicle newspaper archives and read stories about the International,” stated Johnston.  “That property was a significant discovery, so much so that the British Columbia government built trails in an attempt to get it developed.  You have to remember, the property at that time was in the middle of nowhere.  You had to barge in on the Duncan River.  Everything was a challenge.  When the prospectors got into that area, it was a very hard place to work.  You had to go in and live there.  Now we can drive to a hotel at Kaslo after work.  The small mining operation that started in the 1920′s was shut down because of the Depression.  In 1942, Kaslo Mining Company took over the property.  They tried to raise $100,000 to build a tram to take ore down the Duncan River.  The Americans entered World War 2 and it became impossible to raise money.  Ownership of the property changed a few times and the International eventually came into the hands of a gentleman in New Denver who was going to use it for a retirement project.  He had some financial difficulties, however, and we got lucky and ended up with the crown grants.  We then staked about 15 square miles around the crown grants.  With Braveheart we upgraded roads and worked on advancing the property to a drill-ready stage.  The surface has only been scratched and we have an excellent opportunity to develop a mine at the International if the drill program confirms the potential we see from our exploration and what was done historically.”

There are at least four properties we find particularly interesting – the International, the Ottawa, the Gold Viking and the Rhea.  Johnston promises strong news flow in the weeks and months ahead.  What we envision is an excitement-packed drill program that the market will eagerly embrace given some of the historical very high grades and near-surface mineralization.

As regular BMR readers know, not only are we very bullish about the Gold market but we believe Silver will out-perform Gold this year and perhaps become the investment of the decade.  We are very bullish on Silver and Rainbow has at least two exceptional Silver properties (International and Ottawa) that are past producers and offer plenty of upside exploration potential.  Rainbow is active in a region that has produced over 5 million ounces of Gold and 30 million ounces of Silver.

Rainbow has also made it clear that it’s searching for additional opportunities in the Gold and Silver sector to complement its West Kootenay package.  That would bring even more intrigue and interest to this play.  Johnston would not elaborate on that during our interview, only to say:  “My goal is to create shareholder wealth and that begins with our people and building a solid foundation for long-term growth and success.  Our shareholders can expect us to be good stewards of their money but we’ll also be aggressive and opportunistic when necessary.  With the team we have, I envision a big Rainbow that is going to spread out in the sky with Gold and Silver at both ends.”

Note: RBW closed at 21 cents Friday, January 27, for a market cap of $5.5 million.  Please read our disclaimer as this article does not constitute a “buy”, “hold” or “sell” recommendation.  Always perform your own due diligence.

John and Jon both hold positions in RBW and increased their positions last week.  Terry does not hold a position.

Gold is taking a breather today after posting an 11% gain for the month of January entering today…as of 5:55 am Pacific, the yellow metal is off its lows but down $10 an ounce at $1,727…Silver, which has out-performed Gold this month, is off 62 cents to $33.37…Copper has pulled back 4 cents to $3.82…Crude Oil has lost 53 cents to $99.03 while the U.S. Dollar Index is up nearly half a point of a point to 79.37…

Paying For Iranian Oil In Gold?

Just one factor that could be contributing to Gold’s surge are rumors that India and China are secretly mulling paying in Gold for Iranian oil, and bypassing a European Union oil embargo on Iran, effective from July 1, 2012…the EU voted a week ago to ban oil imports from Iran…the move came after a defiant Iran announced earlier in January that it had launched a nuclear enrichment program at a well-protected underground facility near the city of Qom…the new EU sanctions are being seen as a way for the West to bring Iran to the negotiating table but any move by China and India, which together purchase more than one-third of Iran’s oil, to bypass the sanctions will not help the West’s position…India’s finance minister stated yesterday that his country will not cut back on oil imports from Iran…”It is not possible for India to take any decision to reduce the import from Iran drastically because, after all, the countries which can provide the requirement of the emerging economy, Iran is an important country amongst them,” India’s finance minister Pranab Mukherjee told reporters yesterday in Chicago…Iran exports 2.5 million barrels of oil per day, about 3% of world supplies…approximately 500,000 barrels go to Europe and most of the rest goes to China, India, Japan and South Korea…Western sanctions could make it harder for India to pay for the oil it gets from Iran…past sanctions have already delayed payments by Indian oil importers, who have had to scramble to find banks willing to handle transactions with Iran…India’s central bank governor D. Subbarao said last week that the current payment mechanism was “working fine,” though India was also “exploring other options,” which he declined to discuss….

Another EU Summit

EU leaders are meeting in Brussels today to sign off on a permanent rescue fund for the euro zone…Greek Prime Minister Lucas Papademos will be among them as negotiators in Greece race to secure a debt swap deal…a Financial Times report said that Greece had angrily rejected a German proposal to create a European budget “overseer” to monitor the country’s finances in return for a second bailout, further adding to investors’ anxiety today…a glimpse of hope for the debt-stricken region came in the form of a positive debt auction for Italy which saw its borrowing costs for long-term debt fall sharply…

China News

The Financial Times reported this morning that Western industrial companies have seen a slowdown in some markets in China as efforts to cool the world’s second largest economy have hit demand for capital goods and products linked to the construction industry…not all western companies selling in China have suffered from a slowdown in demand…Honeywell, which makes aircraft parts and controls, stated Friday that its sales in China were up 18% in 2011…Dave Anderson, the company’s chief financial officer, said sales growth for products linked to the residential and commercial property markets such, such as heating and air-conditioning equipment, had slowed but other markets such as aircraft and truck components were “doing very well”…consumer-oriented businesses are also still enjoying a boost from robust retail demand, as booming Chinese sales of Apple’s iPhone attest…China’s property slowdown has been a result of government policy intended to rein in house prices and curb inflation…

Today’s Markets

Dow futures are off 93 points as of 5:55 am Pacific…major European indexes are off just over 1% while Asian markets were also in the red today…the TSX Venture Exchange enters the final two trading days of the month up 9.7% for January…that’s better than the Nasdaq (8%), the TSX (4.3%) and the Dow (3.5%)…the Venture has even out-performed the TSX Gold Index (9.2%)…those numbers are another bullish sign for the Venture…John’s 10-year monthly chart shows the CDNX has likely started a powerful “Wave 3″ advance that could ultimately take it to the highs of 2006 and 2007 within the next couple of years…

We’ve had some inquiries regarding Abcourt Mines (ABI, TSX-V) which has shown some share price strength recently, especially after Thursday’s news regarding its Elder Gold Property near Rouyn-Noranda…Elder is a former producer and a property we visited about a year ago…Abcourt is currently dewatering the mine and also expects to produce an updated 43-101 resource estimate by the end of March which could easily show a doubling or tripling of the 2009 number (216,000 all-category ounces at a cut-off grade of 3.8 g/t Au) given results from nearly 20,000 metres of drilling during 2010 and 2011…of course Abcourt also has a valuable Silver asset with its Abcourt-Barvue Property near Val-d’Or…what has been holding Abcourt back, in our view, is the market’s lack of confidence in the ability of President and CEO Renaud Hinse to unlock shareholder value…Abcourt recently appointed two new directors, however, from privately-held Canadian Royalties Inc. which should be viewed as a positive sign…last Thursday’s volume in Abcourt (5.7 million on all exchanges) was encouraging, and the chart is looking more favorable as John shows below…

Note: John, Jon and Terry do not hold positions in ABI.

Our favorite Rouyn-Noranda based company is Richmont Mines (RIC, TSX) which has outstanding management and a very bright future given its Wasamac deposit and two existing operating mines (the Island Gold Mine in Ontario and the Beaufor Mine near Val-d’Or)…Richmont broke through resistance around $12 Friday, closing at $12.42…we’ve written a great deal about Richmont over the past year and we’ve also interviewed CEO and President Martin Rivard…Richmont is profitable with a strong cash position and should achieve Gold sales of at least 100,000 ounces in 2012 with its Francoeur Mine expected to start commercial production by mid-year…Richmont’s chart doesn’t suggest a major breakout is pending just yet (there is also significant resistance at $13) but we do expect a strong move to a new all-time high this year…RIC is definitely a “keeper” for the long haul, especially for those who believe in $2,000 Gold…

Note: John, Jon and Terry do not currently hold positions in RIC.

TSX Venture Exchange and Gold

It was another great week for the Venture Exchange with increasing volumes and a 58-point gain to 1629, the sixth straight weekly advance.  The Index got through resistance around 1575 with the ease of a knife through butter.  Most brokers and investors aren’t aware of this at the moment, but if you look at John’s 10-year monthly chart below you’ll see how the CDNX has started an extremely bullish “Wave 3″ pattern that ultimately should take the Index right up to the 2006 and 2007 highs.  As John states, the combination of the December “hammer” and the January white candle has created a powerful reversal pattern. The bear market that started in March of last year is over and a new bull run has commenced.  There will be pullbacks along the way, of course, but those will present buying opportunities for astute investors.  For now, the 10 and 20-day moving averages (SMA’s) can be expected to provide strong support.  The 50-day SMA is now reversing to the upside in a pattern similar to what occurred in January, 2009, and September, 2010.

The CDNX party is “on” and those who show up much later will allow those who arrived early, like our readers, to pocket fortunes.

So what is driving all of this?  There are a few major factors in our view that some traders and investors have picked up on, so cash that has been sitting on the sidelines has been aggressively entering the markets recently and will continue to do so.  First, there were some very respected analysts at last week’s Resource Conference in Vancouver who made a strong case that the worst of the liquidity crunch in the euro zone is over, thanks to unlimited three-year loans to banks and other measures introduced by the ECB.  Second, the Fed indicated on Wednesday that it intends to keep interest rates at “exceptionally low levels” until late 2014, compared to guidance of mid-2013 previously.  Additionally, the FOMC signaled that further accommodation would likely come from adjustments to the balance sheet.  There is certainly a renewed belief among traders and investors that the Fed stands ready to support financial assets is helping contain festering euro zone worries.  Third, the U.S. economy is holding up well and China is now more focused on growth than inflation as monetary policy in the world’s second-largest economy has gone into “easing” mode.  Negative real interest rates around the globe are here to stay for an extended period and that’s very bullish for Gold and commodities in general which creates a very positive environment for the Venture Exchange.

Sentiment has clearly changed on the CDNX.  We know that based on market reaction to news from various companies and sharp increases in trading volumes.

Gold

Speaking of Gold, the yellow metal shot through resistance at $1,700 last week to close Friday at $1,737.  The weekly gain was $70, bringing Gold’s advance for the month to 11%.  So much for those who predicted the end of the Gold bull market just weeks ago when it fell below its 200-day moving average (SMA).  Each time that has occurred over the last decade or so (about half a dozen times), Gold has been an incredible buy.  This time was no different. Forced selling by European banks was a driving force in Gold’s weakness over the final few months of last year.

We fully expect Gold to hit a new all-time high in 2012 but it will likely need to catch its breath in the near future.   The next two major areas of resistance are $1,750 and $1,800.  So we do expect Gold to calm down a bit but build a strong base for the next major leg up.

Silver, which is up 22% this month, gained another 79 cents last week to close at $33.99.  Copper jumped 14 cents to $3.87.  Crude Oil was up $1.23 to $99.56 while the U.S. Dollar Index fell by more than a point to 78.84.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, is having a huge impact on Gold.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates that won’t end anytime soon (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  It’s hard to imagine Gold not performing well in this environment.  The Middle East is being turned on its head and that could ultimately have major positive consequences for Gold.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than two years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.  While we focus very much on the Gold market and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on undiscovered junior exploration companies or small producers, mostly in the Gold exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it -  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  If it’s the other way around -  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly -  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Gold climbed as high as $1,727 this morning but has pulled back slightly…as of 5:45 am Pacific, the yellow metal is up $3 an ounce at $1,723…Silver is up 8 cents at $33.55…Copper is 3 pennies higher at $3.89…Crude Oil has gained 53 cents to $100.23 while the U.S. Dollar Index is off one-fifth of a point to 79.30…

Barclays Capital stated yesterday that precious metals, paced by Gold breaking $2,000 an ounce by the third quarter, should lead the commodity sector in 2012 with 20% gains by the end of the second quarter and up 21% for the entire year…

CNBC’s Cramer made a very astute comment yesterday:  “We’ve got a huge disconnect between what people think is happening in this country and what’s actually happening,” he stated.   “I’m talking about the widespread misconception that our economy is in trouble, something that’s causing many of you to sit on the sidelines and miss out on some tremendous gains”…

Cramer is right.  The Financial Times reported this morning that North American industrial companies are predicting that the U.S. will be one of their big growth markets in 2012 for the first time since the start of the financial crisis, reflecting rising demand for everything from excavators to truck part…Caterpillar, the world’s largest maker of earthmoving equipment, brushed off concerns about a possible slowdown in the global economy and said it expected real U.S. construction spending to increase this year for the first time since 2004…the upturn in demand in the U.S. was helping the manufacturer to experience its “best growth since Harry Truman was president”, said Mike DeWalt, head of investor relations…

While Caterpillar echoed concerns that policymakers could derail the recovery by prematurely tightening economic policies, the company said it expected the U.S. economy to pick up steam this year and added that “the risk of a worldwide recession has diminished significantly”… The vote of confidence in the U.S. was underscored by Eaton, the manufacturer of industrial equipment and components for trucks and aircraft, which said it expected its markets to grow faster in the U.S. than in the rest of the world for the first time since the mid-2000′s…

U.S. GDP figures just hit the wire at 5:30 am Pacific…the American economy grew at its fastest pace in 1-1/2 years in the fourth quarter, but a strong rebuilding of stocks by businesses and weak spending on capital goods hinted at possible slower growth early this year…GDP expanded at a 2.8% annual rate in the 4th quarter, according to the Commerce Department, a sharp acceleration from the 1.8% clip of the prior three months and the quickest pace since the second quarter of 2010…it was, however, a touch below economists’ expectations for a 3% rate…

Dow futures as of 5:45 am Pacific are down 23 points…

The CDNX appears ready for a strong finish to January with a reversal as well in its 50-day moving average (SMA) by early next week…this is very significant and should propel the market higher in February…interestingly, the Venture is also now just slightly above its 1,000-day SMA where it was turned back in early November last year…that long-term moving average, which has been in decline since 2008, is expected to reverse to the upside in the second half of this year and that’s when this market could really go ballistic…

It’s a great time, we believe, to be bottom-fishing the top Yukon Gold plays in anticipation of a very busy exploration season up there which will kick into high gear late in the second quarter…Kaminak Gold Corp. (KAM, TSX-V) is just one example of a quality situation that could deliver terrific gains for patient investors over the coming months…Kaminak is showing renewed strength and John updates the chart below…

Note: John, Jon and Terry do not hold positions in KAM.

Atac Resources (ATC, TSX-V), Golden Predator (GPD, TSX) and Radius Gold (RDU, TSX-V)  are just three other Yukon plays that are worth serious due diligence at the moment… Sandspring Resources (SSP, TSX-V) continues to look strong and yesterday it jumped 13 cents to $1.50…the SSP chart is pointing to additional near-term gains while the overall “big picture” with this play looks very promising…

Note: John, Jon and Terry do not hold positions in SSP.

Rainbow Resources (RBW, TSX-V) continues to sizzle and touched 23 cents yesterday…Rainbow is shaping up to be a very exciting play and the upcoming geological report on the company’s properties from Moose Mountain should provide a lot of depth and technical back-up for the story…this is certainly one of the most interesting situations we’ve come across the last couple of years given the people involved, the land package that has been assembled, and the attractive capital structure…

Gold made an important and powerful move yesterday as the Federal Reserve set the stage for three more years of ultra-loose monetary policy in the world’s largest economy…as of 6:00 am Pacific, the yellow metal is up another $15 an ounce to $1,726…Silver is 35 cents higher at $33.62…Copper has gained a nickel to $3.87…Crude Oil is up $1.29 to $100.69 while the U.S. Dollar Index has fallen one-third of a point to 79.15…

After Gold’s big move yesterday, which we’ll explain in a moment, it’s important to go to the charts and examine a major producer to see what we can learn, so this morning John takes a look at Goldcorp Inc. (G, TSX)…

Note: John, Jon and Terry do not hold positions in Goldcorp.

Helicopter Ben To The Rescue + China’s Easing Of Credit

The FOMC indicated that it intends to keep interest rates at “exceptionally low levels” until late 2014, compared to guidance of mid-2013 previously, which gave the commodity and stock markets such a boost yesterday….additionally, the FOMC signaled that further accommodation would likely come from adjustments to the balance sheet…a renewed belief among traders and investors that the Federal Reserve stands ready to support financial assets is helping contain festering euro zone worries…

Meanwhile, as reported in the Financial Times this morning, the government-induced credit crunch in the Chinese commodities industry is ending, according to western traders, triggering a wave of bullishness regarding the outlook for industrial raw materials…

Beijing’s clampdown on lending cast a pall over commodity markets in the second half of last year, with the benchmark price gauge, the Reuters-Jefferies CRB index, falling as much as 21% from a peak in May…

Leading western trading companies are saying, however, that in recent weeks their Chinese trading partners have started to gain easier access to credit, allowing them to make larger purchases of commodities… “Sales of copper to China are currently at the highest we have seen over the past year,” a senior executive at a large trading house told the Financial Times…”Credit is easing in China and that correlates at a later stage with stronger growth”…

The change in credit conditions in China, the largest consumer of commodities from iron ore to soyabeans, has helped to reverse the gloomy sentiment among natural resources investors that took hold in the final months of last year…

Copper, one of the sector bellwethers which counts on China for 40% of its demand, has rallied 16% in the past six weeks and yesterday touched a four-month high…

Venture Exchange

The Venture Exchange 50-day moving average (SMA) is ready to turn to the upside any day now and that’s an extremely bullish sign…this 50-day SMA reversal will have no problem holding which is a repeat of major market turning points in January, 2009, and September, 2010…John’s long-term CDNX chart we posted yesterday says it all – position yourself now to make a potential fortune over the course of the next year…this is a “Wave 3″ move and they are usually extremely powerful…

The trading action in Seafield Resources (SFF, TSX-V) yesterday was an excellent example of how Venture Exchange market sentiment has truly changed…Seafield released solid results from its Miraflores Property in the Quinchia District of Colombia but the numbers were generally consistent with what we’ve seen from Miraflores over the past year and what we know about the project…however, the market’s reaction to the news was different and SFF exploded to a high of 24.5 cents on total volume (all exchanges) of 9.6 million shares…the volume surge was very revealing…a lot of cash is indeed sitting on the sidelines and waiting to come into this market…we are bullish on the prospects for Seafield as it’s a well-run company with more than just Miraflores going for it…SFF has an attractive overall land package at Quinchia and we wouldn’t be surprised if CEO Cesar Lopez  is able to add more properties to the mix in Colombia…

By Monday of next week we’ll be reviewing what we consider to be some of the best opportunities in this new market environment…some of the companies we’ve already mentioned while others are new to this space…one thing we’ll state now…anticipating a possible market reversal at some point in 2012, we made a decision over the final few months of last year to search diligently for the most attractive situation we could find for our readers that was on no one’s radar screen…we needed a potential big winner, another home run, to introduce to our readers…that’s what led us to Rainbow Resources (RBW, TSX), a former shell that was first listed on the Venture Exchange in January of last year…in this business, one of the most important questions to ask regarding a stock is this:  Does the upside potential vastly exceed the downside risk?…with a current market cap of just $5 million, we believe the answer to that question in this situation is a resounding “yes”…we have put our case forward regarding Rainbow since December…on Monday, we’ll be updating and re-capping our case for RBW following our lengthy interview earlier this week with President David Johnston…we’ll include many of his answers to our questions which our readers should find helpful…Johnston is a class act and he has been successful at everything he has done…

Yesterday was a “hammer day” for Rainbow as the stock rebounded off strong support to close at its high of the day, 19 cents…a breakout into the mid-20′s over the very near future is supported by John’s chart which examines just the short-term picture…an extremely bullish set-up is developing for the medium and longer-term which qualifies RBW as a potential “home run” opportunity…just one thing we really like about Rainbow is that it is both a Silver and a Gold exploration story with high historical property grades and near-surface mineralization…this is an aggressive young company that will also likely add to its project portfolio…one of the directors (Bob Libin) is part-owner of the Calgary Flames while another (Jim Decker) was extremely successful with Grande Cache Coal, raising $7 million and guiding it out of bankruptcy and turning it into a market darling that finally got taken over…Decker now provides consulting services for some major producers…those are the people you want to have in your 19-cent penny stock…below is John’s updated RBW chart…

Note: John and Jon hold positions in RBW (with Jon adding to his position again yesterday).  Terry does not hold a position.

A new company we’re now keeping an eye on – we strongly suggest our readers check it out – is Ucore Rare Metals (UCU, TSX-V) which has the largest heavy rare earth deposit in the United States (NI-43-101 compliant) in Alaska…UCU closed at 45 cents yesterday and has a market cap of approximately $65 million…John likes what he sees in the UCU chart for a potential strong turnaround as this stock has been as high as $1.30…

Note: John, Jon and Terry do not hold positions in UCU.

As we’ve been stating recently, “the tide has turned” with the TSX Venture Exchange and the bear market that started last March has run its course. It is over.  A lot of cash has been sitting on the sidelines and is now entering this market. Today the CDNX climbed 27 points to 1604 on strong volume.  Where is this market headed?  As John shows in the chart below, this has the look and feel of a powerful “Wave 3″ phase that could ultimately carry the Index back to the 2006 and 2007 highs. You heard it here first.  We correctly called the turn in July, 2010, and this is another defining moment.

Gold is softer this morning ahead of today’s Fed policy statement…as of 6:25 am Pacific, the yellow metal is down $10 an ounce at $1,656…Silver is off 22 cents at $31.83…Copper has retreated 3 pennies to $3.76…Crude Oil is 56 cents lower at $98.39 while the U.S. Dollar Index is up nearly half a point at 80.19…

Dow futures as of 6:25 am Pacific are pointing to a modestly lower open…the Venture Exchange closed down 13 points on profit-taking yesterday to 1576…the Index is looking very strong and has plenty of support, so we view any additional weakness as an opportunity right now…

Fed Could Influence Markets Today

The Federal Reserve is set to issue its latest policy statement at 12:30 pm eastern today, followed by chairman Ben Bernanke’s news conference at 2:15 pm…the Fed is widely expected to keep monetary policy on hold with forecasts expected to show interest rates will be near zero for at least two more years…today’s new conference will include details of where Fed members expect the federal funds rate to be at the end of each of the next three years, and when they expect the first rate hike will occur…

Obama’s Campaign Speech

President Obama’s State of the Union address last night was more of the same from this President – government is the solution to America’s problems, an approach that really goes contrary to American tradition…Obama put very little emphasis on the debt and spoke at length about how government can do this, that and just about everything else at a time when it’s almost broke…how does that make any sense?…people’s expectations of government need to be reduced at this time, not inflated, and individuals need to exhibit more personal responsibility…one certainly can’t expand the scope of government in the United States without a major tax increase…of course Wall Street was blamed for the financial crisis (government certainly could never have contributed to it, could it?) and the “rich” need to cough up more to the government in taxes…quite simply, Obama wants to take from those who have and redistribute it to those who don’t…that’s what all good socialists aspire to do…he did not propose fundamental across-the-board tax reform which is necessary…the 2012 elections will be all about the role of government in Americans’ lives…Obama sees government as a positive force…government doesn’t need to be restrained or limited in his view…that’s very much the same thinking that guided Canada’s Pierre Trudeau, and Canadians are still paying for what he inflicted on this country…the only good thing about Obama’s speech last night was that it paints a very clear choice come November…if the Republicans can get their act together, Obama will thankfully end up being just a one-term President…

Europe – Massive Monetary Easing Required?

Europe needs “massive monetary easing” to get out of its debt crisis, otherwise Greece will likely abandon the euro in a year and a half, famous economist Nouriel Roubini told CNBC yesterday…private investors who lent Greece money, such as banks and investment funds, are meeting in Paris after talks on a debt swap that would change shorter maturity Greek bonds for longer maturity ones to give the country more chances to reduce its debt were inconclusive last week and earlier this week…

Silver

One of our readers was asking about the Sprott Physical Silver Trust (PHS.U, TSX) after our piece Monday regarding Silver after we listened to a presentation by Sprott Private Wealth CEO David Franklin at the Vancouver Resource Show…we’re very bullish on Silver and that was before hearing Franklin who called Silver “the investment of the decade”…anyway, below is a chart from John on the Sprott Physical Silver Trust which recently raised $350 million for a major physical purchase of Silver last week…

Seafield Resources Update

More solid results from Seafield Resources‘ (SFF, TSX-V) this morning from the company’s Miraflores Project in the Quinchia District of Colombia…drill hole #24 intersected 167.75 metres grading 1.05 g/t Au and confirms the continuity of mineralization at depth…another hole, #25, has extended mineralization of the breccia pipe to the southwest, outside of the known resource area…Seafield CEO Cesar Lopez is doing a terrific job with this company and we’re convinced it’ll be a great performer in 2012, especially with a turnaround in the markets…Seafield is also working on its Dos Quebradas Property and we wouldn’t be surprised if the company expands its presence in the Quinchia District or picks up additional land elsewhere…Lopez seems very aggressive and determined to make things happen…

BMR’s Rainbow Resources’ Interview

As mentioned yesterday, BMR has conducted an extensive and revealing interview with Rainbow Resources’ (RBW, TSX-V) President David Johnston…we’ll be incorporating that interview into a major article that’s being worked on now…we threw some tough questions at Johnston and he handled them gracefully and professionally…the bottom line with RBW is this…up until several months ago, the stock was essentially a shell…by acquiring Braveheart Resources, Rainbow’s fortunes have changed dramatically and the trading activity the past couple of months reflects that…Rainbow’s new assets include individuals such as Johnston and well-known and respected Calgary businessman Bob Libin, plus an attractive West Kootenay land package assembled and developed by Braveheart…one of the properties (Ottawa) was the #1 producer in the Slocan Mining Camp in the 1900′s with phenomenal grades (approximately 2,000 g/t Ag)…the International Property, though, could be the best of them all…Johnston says he’s eagerly looking forward to the upcoming 43-101 report on all the properties (which will include historical information) in the very near future…I also got the sense he may have some interesting “irons in the fire” as he clearly stated we can expect Rainbow to be very aggressive in 2012…

Below are a few excerpts from my very lengthy discussion with David Johnston that we’ll be turning into a major article…

About Building A Company

“The most important thing is your people.”

About Values

“Integrity – you have it or you don’t, that simple.  You can’t have a little bit of integrity for one thing, and maybe just so much for another.  You have it or you don’t.”

About Life

“All life is, is solving problems.  Case closed.  That’s all it is.  If you get up in the morning and you got problems to solve, you’re lucky.  And if you don’t have any problems to solve, you should throw yourself on your knees immediately and ask God to give you some problems to solve.  When you get up and you got a handful of problems, just get at them.  Start working on them.  I’m a survivor, my father was a survivor.  Most everyone I hang around with is positive.  Negative people don’t migrate in my direction because I won’t allow them to suck the energy out of me.”

About The International Property

“We now have close to 16 square miles around the area we hope to make a mine.  It has been almost seven years of our own development (through Braveheart).  That property was a significant discovery in the early 1900′s but the Depression, the War, access issues and the crown grants being in the wrong hands prevented development.  Access is now excellent, we have the crown grants and the area all around the crown grants.”

About RBW’s Overall Land Package

“When the oldtimers found the outcrops, when they found the rich veins on the surface, they followed them to the end and took the easy stuff away.  Some of the adits we’ve been in, you can see where they mined and went in with hand tools.  They went right by veins they never touched or bothered with.  They never drilled a single hole, ever.  So none of these areas has been drilled.  The surface has only been scratched.”

About Vision And Going Forward

“Building shareholder wealth is our focus.  We have the right people and the right strategy to do it.  And some fabulous properties.  Just watch.”

Additional Charts

John has three additional charts this morning including this update on Arian Silver Corp. (AGQ, TSX-V) which we first mentioned last week when it was trading in the upper 20′s…the company hopes to produce about 500,000 ounces of Silver this year at its San Jose Project in Mexico and will be updating its 43-101 resources after the current Phase 4 drill program which is nearing completion…so AGQ is currently generating cash flow and could benefit substantially from anticipated higher Silver prices as the year progresses…

Note: John holds a position in AGQ (Jon and Terry do not).

Two other interesting situations, from a technical perspective at least, are Huldra Silver Inc. (HDA, TSX-V) and Hana Mining Ltd. (HMG, TSX-V)…John has charts for both below…

Hulda Silver

Note: John, Jon and Terry do not hold positions in HDA.

Hana Mining

Note: John, Jon and Terry do not hold positions in HMG.

From Vancouver, B.C.

Gold is pulling back slightly this morning on mild profit-taking…as of 6:00 am Pacific, the yellow metal is down $13 an ounce at $1,664 after reaching an overnight high of $1,683…Silver is off 29 cents at $32.06…Copper is down a nickel at $3.75…Crude Oil is 33 cents lower at $99.25 while the U.S. Dollar Index is up one-third of a point at 80.12…

The CDNX enjoyed another strong day yesterday, climbing 18 points to 1589 with volume picking up as well…this market has indeed turned the corner and the rest of this quarter could be quite robust…any weakness at this point should be viewed as an opportunity with the rising 10 and 20-day moving averages (SMA’s) providing strong support…

Dow futures are modestly lower as of 6:00 am Pacific…it’s a big day for U.S. corporate earnings, which should show continued strength, and President Obama delivers his State-of-the-Union address tonight which will be a campaign speech more than anything else…

We fully expect Gold will surge to a new all-time high in 2012 but what it does in the coming days will be very interesting as the yellow metal is right up against a resistance area as John’s chart shows below…buying pressure increased significantly yesterday which is a positive sign…the action in the Venture Exchange strongly suggests that Gold will break through the $1,700 barrier sometime during this first quarter – who knows, perhaps even this week…Gold will make up its own mind if it wants to bust out now or later…

Markets will be closely watching a new Federal Open Market Committee reporting format for any new signs on how long it could be before voting members undertake any monetary policy changes…the meeting begins this morning and wraps up tomorrow…the FOMC is expected to release a policy statement around 12:30 p.m. eastern tomorrow, and Chairman Ben Bernanke is scheduled to hold a 2:15 p.m. news conference…what’s different about the format now is that individual voting FOMC members will be offering their expectations for future interest rate direction…

Germany is open to boosting the firepower of the euro zone’s rescue funds to 750 billion euros in exchange for strict budget rules favored by Berlin in a new fiscal compact for all members of the currency union…the Financial Times reported this morning how Berlin appears to be softening its longstanding resistance to increasing the funds only hours after the International Monetary Fund warned that the euro zone needed more money to build “a larger firewall” to prevent the crisis from spreading to its core economies…

U.S. stocks are trading at their cheapest levels since at least 1990, according to such commonly used valuations as price-to-earnings and price-to-book ratios as well as dividend yield, Bespoke Investment Group says…this realization will lift the S&P 500 Index by 11% to 1400 this year or maybe more, according to the research firm’s 2012 outlook report…“The S&P 500 is currently trading below its historical average P/E and P/B ratios, and these ratios are also at their lowest levels in the careers of a large percentage of money managers,” wrote strategists Paul Hickey and Justin Walters…

Vancouver Resource Conference

The well-attended Cambridge Show wrapped up yesterday and we have important pieces of information from that event to share with our readers beginning with comments yesterday from respected geologist and newsletter writer Lawrence Roulston (Roulston publishes www.ResourceOpportunities.com)…

Roulston quote from presentation at Conference yesterday:

“I’m putting down last Friday as the official turning point in the junior markets. Gold was up, a lot of the companies were up, but in particular one event really demonstrated just how much money is available and how the mood has changed.  One of the companies that we follow, Calibre Mining (CXB, TSX-V), put out some drill results from a project in Nicaragua.  In reality, the results were not a whole lot different than results they had published over the last few months and the last year.  But on Friday those results attracted the attention of investors, the stock traded 25 million shares and the price went from 18 cents to 37 cents in one day.  And in the first hour this morning, it traded another 10 million shares and traded as high as 49 cents.  So back to Jim Letourneau’s question, when’s the last home run, well, the people who bought Calibre a few weeks ago at 10 cents, this morning they could have sold it as high as 49 cents.  So there’s one example of a home run right here.

“Even more to the point, more significantly, what that tells me is that this money that has been sitting on the sidelines is ready to come back into the market.  When they see good news, they will act decisively and in a very big way.  So all of the fundamentals are there.  The potential of a euro collapse, disaster or catastrophe is really priced into a lot of these stocks at these prices.  And if we don’t get that disaster scenario, and I deeply, sincerely believe that we will not get a complete meltdown – we’ll get a muddling through but not a meltdown – and if that’s the case, then people are going to come back, reinvest and re-deploy their money as we’re seeing here.  The share prices at these levels are very, very attractive and represent extraordinary bargains.”

Some of Roulston’s favorites include Alexco Resource Corp. (AXR, TSX), Novagold Resources (NG, TSX), Revolution Resources (RV, TSX-V), Amarc Resources (AHR, TSX-V), Candente Copper (DNT, TSX), Terrax Minerals (TXR, TSX-V), and Yale Resources (YLL, TSX-V)…

BMR Interviews RBW’s Johnston

We’re more convinced than ever that Rainbow Resources (RBW, TSX-V) has started what could potentially become a spectacular move after a lengthy discussion with new President David Johnston…we’re putting that interview together today to share with our readers…Johnston, who’s conducting a video interview this morning with a well-known and respected  individual who covers the mining scene, made a powerful case for his company’s Big Strike Project in the West Kootenays and his overall vision for where Rainbow is headed…a strong group is involved with Rainbow as Johnston has the likes of Jim Decker (Grande Cache coal fame), Bob Libin (Calgary Flames’ part-owner) and Bruce Durham (successful geologist) at his side…RBW is a winner if we’ve ever seen one, and the company’s market cap is just $5 million…

iSign Media Solutions (ISD, TSX-V)

John has an updated chart this morning on an interesting non-resource company we’ve been watching since the spring of last year, iSign Media Solutions (ISD, TSX-V)…

Note: John holds a position in ISD (Jon and Terry do not).