The U.S. Dollar Index is probably the most important chart that any trader can follow. This morning before the opening bell the U.S. Dollar Index futures (DX U1) traded as high as $74.91 per contract. Once the personal income data was released at 8:30 am EST, the U.S Dollar Index has reversed most of its pre-market gains by declining over 0.50 cents to $74.37 per contract.
By now, most traders should know that when the U.S. Dollar Index surges higher the major stock market indexes will deflate and decline lower. That is exactly what is happening this morning, the major stock indexes are declining sharply lower as the U.S. Dollar Index rallies. Short term traders must watch for some short term intra-day resistance on the U.S.
After hitting a correction low in March, the buying dips mentality held and stocks rallied to new 2011 highs. The upswing was contained within an ascending channel; however, yesterday the bottom levy gave way and selling has poured over, collecting at the 50 day-average for the NASDAQ and S&P 500.
We flipped bearish on Friday and shorted oil on Monday.
At www.philstockworld.com you can read "Magnitude 7.1 Monday" and see why we have shorts on both copper and oil. Follow the link below for our specific trades and sign up for our newsletter to get this information BEFORE the market opens.
Watch out for the momentum stocks as well. Our Monday commentary was:
The interesting aspect to the enclosed 15 minute chart of the ProShares UltraShort S&P 500 ETF (NYSE: SDS) is that off of the recent double bottom lows at 25.35/36, the SDS rallies have undergone very "disciplined" pullbacks that have preserved the prior near-term breakout levels. Those levels, which are prior resistance and now support, are at 25.70/80 and then 26.30/20.
Weekend SPX, Dollar, Oil and Gold Analysis and Video
Last week was volatile thanks to China raising their interest rates a quarter basis point. This rate hike caused the Dollar to spike in value which in turn forced equities and metals to sell off sharply. This one day event caused equities to break below a short term support level causing a large number of protective stops to be triggered.
Fast and Furious Four-Day Wrap-Up (with Great Hedging Strategies!)
PSW Weekly Wrap-Up - 46 Trade Ideas, 2 Plays That Can Make You 566%
In a week where I had already been calling GS "Goldman-Madoff" and I had predicted on Wednesday that the rally would last "until they start arresting people" and we featured the above video on Thursday afternoon to illustrate what a crooked scam the financial marketplace had become that it finally hit the fan on Friday morning when even the WSJ could no longer ignore the evidence that myself and a
73 Trade Ideas, 31 You Can Still Get Cheaper Than We Did!
57% of our trade ideas made money this week despite the chop.
We have plenty of time to be right on the rest and it's an opportunity for you to review the week, see the logic behind the trades and possibly pick up some of these positions for better prices than we entered them ourselves.