U.S. equity markets have been trading essentially flat so far this morning, suggesting that bearish investors have been unable to build momentum off of Friday’s declines as of yet. It also appears, however, that bulls have been unable to take control either.

For example, note that the Dow Industrials (US30 CFD) have been unable to get back above the key 12,800 level. This, combined with a series of lower highs and lower lows, suggests that a pullback within a larger consolidation phase may have commenced. A move through 12,800 or 12,700 could give an indication of the primary market direction for the next several sessions. Note that below 12,700, the next major support levels do not appear until closer to 12,275 or 11,750.

With the main part of corporate earnings season drawing to a close this week, markets may start to look to other indicators for direction. Because of this, market interest in economic data points or commodity price swings may become more pronounced for the next several weeks. In general, commodities appear to be consolidating their gains today with crude oil holding near $125/bbl, gold trading near $885/oz after a successful test of $875/oz. Copper, meanwhile, has retreated 2.4%, while soybeans have advanced 1.0%, suggesting continued interest in agricultural commodities.

Canadian share update: corporate and political developments spark significant moves in materials, energy, and technology  

EnCana (TSX: T.ECA, Bullboard) has gained 7.3% so far today, breaking through resistance at $90 to a new high. Over the weekend, EnCana announced that early next year it plans to split itself into two separate companies, a natural gas producer and an integrated oil producer with oil sands assets in Canada and refinery assets in the U.S. Note that the next measured objective on trend for EnCana appears near $96.

Crystallex (TSX: T.KRY, Bullboard) soared 14.8% in early trading today after press reports suggested that Venezuela’s President Hugo Chavez may decide on whether to grant mining permits to Crystallex and Gold Reserve (TSX: T.GRZ, Bullboard) within the next couple of weeks. Recently, both of these resource companies saw their prices collapse after the Venezuelan Environment Ministry revoked exploration permits, citing environmental concerns. This action suggests that these two companies may move significantly on a decision but there remains a significant risk that a permitting decision may be unfavourable.

Keeping with the mineral exploration sector, it appears that a new round of consolidation among the juniors may be commencing. Earlier today, Metallica Resources (TSX: T.MR, Bullboard), New Gold (TSX: T.NGD, Bullboard), and Peak Gold (TSX: V.PIK, Bullboard) agreed to merge in a US41.8 billion deal.

Quadra Mining (TSX: T.QUA, Bullboard) has jumped 4.4% today to a new high on news from the company’s Sierra Gorda base metal project in Chile. A new resource estimate suggested that the project is believed to contain an indicated resource of 10.6 billion pounds of copper and 474 million pounds of molybdenum plus an inferred resource of 5.5 billion pounds of copper plus 211 million pounds of moly. In response to this news, Quadra plans to spend $37 million over the next year on additional drilling and engineering work in preparation for a feasibility study. Currently, Quadra appears to be testing resistance at $25.25, with support near $24. On a breakout, the next measured objective on trend may appear closer to $27.

Anvil Mining (TSX: T.AVM, Bullboard) may have left its investors feeling like a bit like Wile E. Coyote today. Anvil fell 11.7% this morning after the company announced that it has cut production estimates for its Dikulushi and Kulu mines, and because of this its overall production guidance for F2008 has been reduced to 47,000 tonnes of copper and 950,000 oz of silver. Also, the company indicated that capital costs for Kinsevere Stage II, a key growth project, have ballooned to $380 million, a 48% increase over what had been estimated in the feasibility study.

Research In Motion (TSX: T.RIM, Bullboard) gapped to a new high this morning, rallying 3.5% on new product news. RIM announced that it plans to launch the BlackBerry Bold, a new smart phone, this summer. It also reached a deal with Microsoft (NASDAQ: MSFT, Bullboard) that will enable it to provide Windows Live services on BlackBerries, enhancing integration with Windows Live Hotmail accounts. Note that based on a measured move from the recent $130 to $137.50 trading range, the next measured objective for Research In Motion appears near the $145 level.  

Upcoming free seminars

In the coming weeks, Colin Cieszynski will be making a number of free presentations for accredited investors across Canada.

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

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. 

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. 

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