All Eyes On The Greenback
Traders must simply watch the U.S. Dollar Index very closely today. Once the opening bell rang at the New York Stock Exchange the U.S. Dollar Index began to decline from its intra-day high. We should all know by now, when the U.S. Dollar Index declines the major stock market indexes will usually inflate and trade higher. The U.S. Dollar Index futures (DX U1) traded as high as $76.06 before the opening bell, they are now trading at $75.77 per contract at 9:43 am EST. Traders can easily see how the major stock indexes have reversed the losses from the premarket as soon as the U.S. Dollar Index declined.
Generally, when the U.S. Dollar Index declines intra-day most commodity and energy stocks will trade higher. Traders should watch stocks such as Devon Energy Corp.(NYSE:DVN), Exxon Mobil Corp.(NYSE:XOM), and Freeport McMoRan Inc.(NYSE:FCX) to trade higher on the back of a weaker U.S. Dollar Index. Should the U.S. Dollar Index begin to trade higher these same leading stocks will usually retreat quickly to the downside. All Traders must continue to follow the action in the U.S. Dollar Index.