Equity markets in North America have been quite volatile this morning with equities apparently flailing about in an attempt to find direction following a number of economic data releases. In Canada, May GDP fell by 0.1% over month but grew by 0.6% over year. In the U.S., GDP for Q2 came in at 1.9%, below the 2.3% expected, while jobless claims of 446,000 were well above the 393,000 expected. Equities initially dropped on this news, but have been clawing their way back toward even on the day as the morning has progressed.

This action suggests that equity investors seem to still be searching for direction, and because of this, markets could remain in their current trading ranges for some time. These ranges include 10,800 to 11,700 for the Dow Industrials (US30 CFD), 1,200 to 1,300 for the S&P 500 (SPX500 CFD), 1,750 to 1,870 for the NASDAQ 100 (NDAQ100 CFD), and 785 to 825 for the S&P/TSX 60 (Toronto60 CFD).

Meanwhile, commodities have also been buffeted by winds of changing sentiment. Energy commodities had rallied early in the day but have been drifting into the late morning. Most significantly, however, the upward momentum established yesterday appears to be continuing with oil trading above $124/bbl and natural gas back above $9/mbtu. Precious metals also have continued to rebound today, with gold and silver trading near $925/oz and $17.75/oz after staging successful intraday tests of $900/oz and $17/oz, respectively, yesterday.

Canadian share update: More consolidation in the resource sector, earnings movers

For the second time this week, a major takeover has been announced today. Goldcorp (TSX: T.G, Stock Forum) has agreed to acquire Gold Eagle Mines (TSX: T.GEA, Stock Forum) for $1.5 billion, valuing Gold Eagle at $12.62 per share. This move is expected to consolidate Goldcorp’s position in the Red Lake district, giving it an additional eight km of prospective strike. This move appears to have sparked renewed interest in other junior golds, possibly on takeover speculation including High River Gold (TSX: T.HRG, Stock Forum), Novagold (TSX: T.NG, Stock Forum), and Gammon Gold (TSX: T.GAM, Stock Forum). More senior gold also have been advancing in tandem with the commodity price, including Barrick Gold (TSX: T.ABX, Stock Forum), Agnico-Eagle (TSX: T.AEM, Stock Forum), and Yamana (TSX: T.YRI, Stock Forum).

Torstar (TSX: T.TS.B, Stock Forum) has gained 8.9% today and has broken out of a downtrend after the newspaper and book publisher announced that it earned 47 cents per share last quarter, which came in well above the 37 cents the Street had been expecting. Management attributed the increase to growth at its Harlequin and Metroland divisions, which were able to overcome weakness at the Toronto Star. With Torstar having gapped higher today, the next resistance appears in the $12.75 to $14 area, a previous trading range.

Stantec (TSX: T.STN, Stock Forum) jumped 10.3% this morning after the engineering company reported EPS of 48 cents, above the 44 cents the Street had been expecting, as revenues increased by 34% over year. Stantec also announced plans to list its shares on the New York Stock Exchange. On this news, Stantec broke through resistance at $25 and out of a two-month downtrend, completing a bullish ascending triangle pattern. The next potential upside resistance zone appears in the $28 to $30 area.

Upcoming educational webinars

In the coming months, Colin Cieszynski will be presenting a series of free webinars on trading for accredited investors from coast to coast. 

Date                Time                Topic                                      

August 12         7:30 pm ET      Developing a Trading Strategy 3: Developing
                                                a Trading Plan (for CMC Markets clients only)

For more information on these and additional CMC Markets seminars, please go to CMC Markets Seminar Registration Page at http://www.cmcmarkets.ca/en/content/education/free_seminars.do

This commentary is based upon technical analysis. Technical analysis is the study of price and volume and the interpretation of trading patterns associated with such studies in an attempt to project future price movements. Technical analysis does not consider any of the fundamentals of an underlying company, and as such is inherently uncertain and should not be the only factor considered by an investor in making an investment decision. 

This commentary is provided for informational and educational purposes only. Nothing contained in this commentary is intended as investment advice or a recommendation or solicitation to buy or sell. All opinions expressed are current as of the date of publication and subject to change without notice.

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