Equity markets in North America appear to be in a holding pattern today with major indices trading near key technical levels including 2,000 for the NASDAQ 100 (NDAQ100 CFD), 1,400 for the S&P 500 (SPX500 CFD), 12,800 for the Dow Industrials (US30 CFD), and 870 for the S&P/TSX 60 (TORONTO60 CFD). It appears that in the U.S. bullish and bearish investors may be at a stalemate, with the recent round of earnings reports seemingly giving bulls the ability to lift equities off their winter bottoms, but likely not enough information to maintain recovery momentum. With earnings reports slowing down again, it appears that markets may consolidate near current levels and economic or commodity price data may become the key drivers of investor sentiment for the time being. 

Commodities appear to be giving back some of their recent gains today in what appears to be a normal trading correction. Crude oil, for example, has drifted back below the $124/bbl level, while silver has approached $16.50/oz once again. Gold has declined significantly today, dropping back through the $875/oz level to retest support closer to $860/oz. Meanwhile, natural gas appears to be supported, trading in the $11.40–$11.50/mcf range. Note that were there to be a significant pullback in commodity prices, the resource- and energy-weighted Canadian indices could be vulnerable.
 
Canadian share update: Sino-Forest surges, InterOil refinances

Sino-Forest (TSX: T.TRE, Bullboard) jumped 2.3% this morning after reporting that it earned nine cents per share from continuing operations last quarter, up 2.3% over year, while revenue rose by 20.7% to $136.1 million. Investors appear to be responding to comments that suggested the first quarter is usually slower seasonally but that it still expects to have a strong year in 2008. Upside resistance levels for TRE appear near $18 and $20 with support at $15 having recently been successfully retested.

InterOil (TSX: T.IOL, Bullboard) appears to have sorted out its financial difficulties. Last night, the international energy explorer announced a $95 million private placement of subordinated convertible debentures with a $25 conversion price. This debt is to be used to repay the remaining $70 million of its previous credit facility and to continue drilling for oil and gas in Papua New Guinea.

InterOil declined initially off this news, possibly over dilution concerns or transaction risk, but it is possible that, should this deal close, investors may be able to focus solely on the company’s exploration prospects and recent discoveries.
 

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. 
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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