Everyone in the world thought that the stock market would have been in party mode today after the announcement that Osama bin Laden was killed. Last night the S&P 500 e-mini futures soared higher when the news was made public. This morning the major stock indexes have struggled to stay positive, that is because the U.S. Dollar Index has rallied off its intra-day low. When the U.S.
USDCAD, USD, CAD, us dollar, canadian dollar, loonie, hidden bearish divergence, ron acoba, daily forex picks
It’s been awhile since I posted about the forex market. But guess what? I’m back in the FX trading arena! So as I was scanning through the charts of the major currency, the USDCAD got my attention in a snap!
Whenever the U.S. Dollar Index declines the major stock market indexes will inflate and advance higher. The chart below clearly defines this inverse relationship in real time. The U.S. Dollar Index has now declined lower by 17.0 percent since June 7, 2010 when it traded as high as $88.70 per contract. This morning the U.S. Dollar Index is trading around $73.85.
Since late August 2010, the major stock market indexes have rallied sharply higher. The catalyst for the rally was the announcement of QE-2(quantitative easing) by the Ben Bernanke in Jackson Hole, Wyoming. The U.S. Dollar Index has been declining sharply ever since that announcement and the stock markets have inflated higher.
Traders can easily see by this chart that when the U.S. Dollar Index declines the S&P 500 e-mini futures rally higher. This is the main catalyst for the gap higher open in the major stock indexes. We can only wonder when the falling dollar will become problematic for the stock market. It has already become problematic for people around the world as inflation is skyrocketing.
All of the major stock index futures are soaring higher this morning. The popular and highly traded S&P 500 e-mini futures(ES M1) are trading higher by 18.00 points to 1326.75 per contract. This is a huge move higher before the opening bell at the New York Stock Exchange. The catalyst for the rally this morning looks to be a combination of the declining U.S.
Equities Don’t Follow the Dollar Index So Hold On!
So far in 2011 the equities market has made some sizable whip saw type moves that even veteran traders have had difficulty being on the right side of the price action. The year started out with equities being very overbought and extended making is virtually impossible for a low risk trader to buy on pullbacks.
Three Ring Circus: Gold, Silver, and the U.S. Dollar
How low can the Federal Reserve allow the U.S. Dollar to decline? Every trader and investors understands the argument that a weak U.S. Dollar will usually boost exports and help to create inflation. However, the negative fact for the world is that the U.S. Dollar is the world's reserve currency. Therefore, when the U.S. Dollar declines goods for everyone in the world will inflate higher.