The east coast of the United States was stocking up for abject disaster this morning on forecasts of a record breaking blizzard scheduled to hit New York City, but as often happens with weather forecasts, the reality was a little different than the hype. Instead of experiencing up to three feet of snow, they were blanketed with a mere eight inches as travel bans were lifted across the area. The stock market appeared to be preparing for the worst as well as Dow Futures were down significantly before the open and are still down as of this writing, but that sentiment may change as the day moves along.
Just as the blizzard wasn’t as bad as everyone though it would be, the future economic prospects of the US may not be either. The first reports for North America this morning were all negative as both Microsoft and Caterpillar had disappointing earnings results with a declining Durable Goods Orders to boot. However, later reports were much better than anticipated as Consumer Confidence came in at its highest reading since August 2007, Markit Services and Composite PMI improved, and New Home Sales were the highest since 2008. The theme of forecasting disaster only to come out better off in the end seems to be a theme today, and it may work out the same way in US equities by the time all is said and done.
Simply having a feeling that the stock market will bounce back over the course of the day isn’t enough to engender faith though, so utilizing some technical factors would be nice. Luckily, there is a Fibonacci based Bullish Gartley Pattern that is near completion in the Dow Jones 30 that could provide the support we seek. While the low of the day so far has come painfully close to the support level the Gartley pattern forecasts, it hasn’t quite reached it precisely. As you may already know though, trading isn’t a very precise craft, and close proximity can be enough to convince the Dow to pull an about face in to the afternoon.
Source: www.forex.com
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