Equity markets in the U.S. and Canada have advanced this morning as it appears that the U.S. Q1 GDP report may have given bullish sentiment another boost. U.S. GDP grew by 0.6% over year last quarter, above the 0.5% expected, while the GDP price index came in at 2.6%, below the 3.0% expected. This suggests that some of the risk of stagflation may be dissipating in the U.S. On the other, hand, stagflation may be looming in Canada. In February, GDP fell by 0.2% over month, but increased by 1.5% over year with slowing seen in the wholesale trade, manufacturing, retail trade, oil and gas, transportation, and financial sectors. Industrial product prices in March increased by 1.7% over year and raw materials prices rose by 20.4% over year, suggesting that inflation prices may be building.

At this point, it appears that investor attention may be turning toward the U.S. Federal Reserve Board interest rate announcement, due at 2:15 pm ET today. Key resistance levels that could be tested off of this announcement include 12,950 for the Dow Industrials (US30 CFD), 1,400 for the S&P 500 (SPX500 CFD), and 1,950 for the NASDAQ 100 (NDAQ100 CFD). Significant breaks through these levels could signal the start of a new recovery trend in equity markets, while a failure to break through may suggest that continued consolidation is likely in the coming weeks.

Canadian share update: Crystallex collapses, Talisman turns up, Torstar tanks, Transforce transforms

Crystallex (TSX: T.KRY, Bullboard) fell 55.1% today after returning from a trading halt. The mineral explorer announced that the Government of Venezuela has denied its request to conduct resource exploration activities at the Las Christinas gold deposit. The government cited sensitivities to indigenous peoples in the Imataca Forest Reserve area for the decision. While management indicated that it intends to respond to this decision, it provides yet another example of the significant political risks that resource companies operating in developing countries face.

Talisman Energy (TSX: T.TLM, Bullboard) has advanced 3.0% this morning after the energy producer announced that it earned 45 cents in Q1 F2008, beating the Street estimate of 40 cents. Considering that production declined by 11% over year to 419,000 boe/d results, this outperformance seems to have been due to higher energy commodity prices. With today’s advance, Talisman appears to have successfully retested its old $20.00 resistance level as a new support level, with the next significant resistance area appearing between $21.50 and $22.50. The other significant advancer in the oilpatch this morning has been Canadian Natural (TSX: T.CNQ, Bullboard), which has gained 3.5% after announcing that its Horizon Oil Sands project is 94% complete and that it expects first oil from the project in Q3 F2008.

Sentiment appears to have turned against Torstar (TSX: T.TS, Bullboard) today as the newspaper and romance book publisher has dropped 7.1% in early trading. In its latest quarter, Torstar generated revenue of $351 million, down 6.8% over year, while its EBITDA fell by 25% to $36 million. Management blamed the decline on difficulties in its newspaper business that led to sales and earnings declines and a $20 million restructuring charge. Torstar did suggest that its Harlequin division remains on track for a good year and that it is adjusting costs in its newspaper business to reflect soft sales expectations.

Trucking trust Transforce (TSX: T.TIF.UN, Bullboard) announced this morning that it intends to join the parade of income trusts turning back into traditional corporations. As demand for trucking can be an indicator of current economic conditions, investors should note that management suggested that it is currently “operating in the toughest economic climate in at least a decade,” with slower economic activity and rising fuel prices seemingly putting the squeeze on margins.

Brookfield Asset Management (TSX: T.BAM.A, Bullboard) broke out of a downtrend this morning after reporting that it earned 31 cents per share last quarter, well above the 19 cents Street estimate. Revenue of $3.2 billion also came in well above the $2.2 billion expected. Significant upside resistance levels appear $35.00 and $40.00 on trend.    

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

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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