Junior venture companies in Canada are finally seeing a significant lift.

In early January, the S&P/TSX Venture Composite Index rose above the 200-day moving average for the first time in three years. The index is also very close to experiencing a golden cross, which is when the shorter-term 50-day moving average crosses above the 200-day moving average. Historically, traders see this cross as extremely bullish.

You can see on the chart that there have been few occurrences of golden crosses over the past five years, with one in 2009 and another in 2011. Following these crosses, the index saw a spectacular increase.

The Canadian venture index holds 372 micro-capitalization securities that trade on the S&P/TSX exchange. It’s a resources-heavy index, with more than 80 percent of the holdings in the energy and materials sector. Making up the top 10 by weight are energy companies including Africa Oil, Mart Resources, Americas PetroGas and Madalena Energy.

Materials stocks such as Atico Mining, Balmoral Resources, Chesapeake Gold, Energold Drilling, Gold Standard Ventures, Rye Patch Gold, and Santacruz Silver Mining are also constituents.

These stocks will be familiar to the shareholders of the World Precious Minerals Fund (UNWPX), as they are representative of the fund’s holdings. Historically, we’ve found that these junior mining companies outperformed their larger counterparts.

As resource investors, we’re particularly encouraged by this “golden cross,” but what makes us even more optimistic is further data supporting the cyclical areas of the market.

Cyclical companies in sectors such as information technology, industrial, materials, and consumer discretionary tend to sell goods and services beyond the basic needs. These are the goods and services businesses and consumers buy when times are good.

So consider the potentially major impact that increased investment spending might have on these companies. After curtailing capital expenditures following the Great Recession, businesses may be in the process of reversing that trend after a prolonged period of under-investing.

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It’s well known that China is major driver of resource markets.

The nation is one of the world’s largest importers of commodities like copper, coal and oil.

But news last week suggests Chinese consumption is also becoming a critical factor in another market. Natural gas.

Platts reports that its estimates of Chinese natgas imports surged in December. With liquefied natural gas (LNG) deliveries to the country up 33.3% year-on-year. To 2.43 million tonnes.

Pipeline imports also showed big growth in December. Rising 20.1% over levels from the same month in 2012. Overall, Chinese natgas imports jumped 27.1% during the month, to 4.28 million tonnes.

That’s a major increase in consumption. Especially for a nation that’s already a significant force in global natgas import markets.

And it looks like the trend is set to continue. China’s total natgas demand during the full-year 2013 rose an estimated 15.4%. Projections from various sources in the country peg demand growth for 2014 at similar levels—likely between 10% and 15%.

The most critical point for international investors is that this supply is increasingly coming from imports. Total Chinese natgas imports for 2013 grew 30% over 2012 levels. Imports accounted for 32.3% of China’s total demand—up from 28.7% in 2012.

This means a lot of gas is going to continue to be diverted here. Attracted by high prices for products like LNG. At a time when demand from nearby nations like Japan and Korea is also running high.

Driven by such competition, China has shown a willingness to source gas from out-of-the-way suppliers. Nations like Yemen, Egypt and Equatorial Guinea all sent significant supplies here during the past year.

This openness to new supply sources bodes well for new LNG projects being developed—especially in the Pacific sphere. Places like Indonesia, Australia and Papua New Guinea are well-positioned in this regard.

We’ll see who moves to capitalize on rising demand in this center of the resource universe.

Here’s to the big players,

dforest@piercepoints.com / @piercepoints / Facebook