Resource World Magazine

24 www.resourceworld.com a u g u s t / s e p t e m b e r 2 0 1 6 Sell in May – No Way! A few months ago I wrote in this publi- cation: One Step at a Time. I thought that if the resource stock heavy TSX Venture Exschange could hold most of the gains it had made in the first quarter of 2016 that there was a good chance that the new bull market for resources was upon us. To recap, the Venture Exchange had risen about 20% from a record low of 474 set in January and I was looking for a confirma- tion that the gains would hold. This was because recent history had shown that the resource markets tend to go into a severe correction during the summer months – to the point that the saying of "Sell in May and go away" had become the norm. And those who sold were proven right as some of the summer corrections managed to negate a full year or more of gains. So there we were in April with the Venture Exchange at about 575 and a nice gain in hand from the absolute low of January 28, but nervously wondering if the sell in May scenario was poised to play out again. I didn't think it would, but history had taught me not to stick my neck out too far. And the Venture Exchange proved the naysayers wrong. Not only didn't it cor- rect – it actually kept going up – smartly too. Up through 600 and on up through a significant one-year resistance level of 703. And except for a brief post-Brexit shudder that tested the recent 703 break- out, the Venture Exchange now stands at a 20-month high of about 784. The advance seems to be fairly broad based. Gold and silver prices are at two-year highs. Crude oil and natural gas are well up off of their multi-year lows. Copper seems to be building a base above US $2-a-pound and zinc has quietly gained about 35% this year to almost US $1 per pound. Add to this the new enthusiasm for the electric auto induced interest in lithium and you have a resource market unlike anything we've seen for a number of years with multiple resources all moving in the same direction – up. And with daily Venture Exchange trading volumes having doubled in the past six months to about 200 million shares per day, one could safely say that this resource bull market has legs. Granted, it is still summer and this market could still consolidate or correct, but I think the lows of the year are now well behind us. In fact, following perhaps a quieter summer and barring any world calamity, I'm expecting the TSX Venture Exchange to move up and test the 2014 upside resistance level of 1,050 sometime later this year or early into 2017. Sell in May and go away – not this year. To illus- trate this point, The Vancouver Sun reported in early July that the top 10 performers on the S&P/TSX Composite Index to date in 2016 were mining companies. This market looks to be going higher. n Rodney Blake is an Investment Advisors with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp, Member- Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated com- panies, assume any liability. This information is current as of the date appearing in this article, we do not assume any obligation to update the infor- mation or advise on further developments relating to these securities. This article should not be con- sidered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respective directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not necessarily those of Canaccord Genuity Corp. He can be reached at 604-643-7567 or rod.blake@ canaccord.com at t h e m a r k e t R o d B l a k e

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