May 20, 2010
It’s another ugly day on the markets but the worst thing an investor can do right now is panic…Gold is off its lows of the day and is now up $2 an ounce to $1,193 as of 8:30 am Pacific time…the CDNX continues to take a beating and is down another 48 points to 1438….it’s now in an area (the 200 day moving average and the February low) where it’s reasonable to expect it will find strong support, at least temporarily…we’ve warned about the possibility of a 20 to 30% CDNX correction all year but pinpointing exactly when that might occur is an almost impossible task…what we’re seeing right now with the CDNX, in an historical context, is very normal within a bull market and will present us with some incredible buying opportunities…it’s important to understand this is not 2008 all over again…the underlying technical condition of the CDNX is far, far stronger than it was in the summer of 2008, and even a drop to 1,200 on the CDNX would not end this ongoing bull market…what we’re seeing right now seems very similar to the 2004 market that took a major dive in the spring and roared back afterward…Gold Bullion Development (GBB, TSX-V) dropped as low as 38 cents this morning but is bouncing back…GBB is currently down half a penny to 41.5 cents…through this market weakness, astute investors will gobble up every single share of GBB that some nervous nellies put up for sale because Gold Bullion ultimately is headed much higher based on the fundamentals of a major discovery at Granada…
