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U.S. stock indices are likely to see fresh buying today since the GDP exceeded the consensus estimate of 4.5%. What this market needs right now is a shot of confidence, and news that the economy is improving at a better rate than forecast could be exactly what investors have been waiting for. The problem is whether investors will be paying more attention to past data such as the GDP or current reports regarding sovereign debt issues in Greece and Portugal.

If the situation in the Euro Zone continues to escalate and capture the bulk of the headlines, then look for investors to turn more risk averse.  This would trigger a rally in the Dollar and pressure stock indices and gold. Overnight, the March E-mini S&P 500 traded down to .618 support before mounting a short-covering rally. This level at 1069.50 is now being read as major support. Regaining the 50% level at 1084.50 will be a sign of strength and could help form of a closing price reversal bottom.  

March Treasury Bonds rallied overnight but found resistance at a major 50% price at 118’24.  Bearish traders want to see this price hold in order to attract more sellers who could eventually drive this market to the down side objective at 116’06.  A weaker than expected GDP figure today will likely trigger a rally as this would indicate the economy was not growing as fast as expected.  A bullish GDP number is bearish because it gives the Fed another reason to begin raising interest rates.

February Gold continues to trade both sides of major support at 1075.20. This market seems to be on life support while waiting for the Dollar to make its next move. A stronger Dollar could help plunge this market $50 to $100 over the near term.  A weaker Dollar is likely to trigger a short-covering rally to $1119.10.

The March Crude Oil contract is trying to establish support near the December bottom at 72.53. Bullish oil traders want to see a better than expected GDP figure. This would be an indication of expansion in the economy and an increase in future demand for petroleum products.  A stronger Dollar could put pressure on this market today.

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