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Can The Dollar Fall Enough To Save The Day?



May 11, 2012 – Comments (0) | RELATED TICKERS: QQQ , IWM , DIA

Once again, the U.S. Dollar Index (DX-M2) is declining lower after the opening bell rings at the New York Stock Exchange. This happens very often when the major stock indexes are breaking lower. You see, when the dollar declines everything in the stock and commodity markets will inflate and trade higher. Just the opposite will happen when the U.S. Dollar Index rallies, the stock markets will decline and deflate lower.

As you all know by now, J.P. Morgan Chase & Co (NYSE:JPM) reported a $2 billion trading loss in the highly controversial derivative market. This action caused the futures market to decline sharply lower overnight. Traders should note that the stock market really moves inversely to the U.S. Dollar Index. This morning, the major stock indexes have moved to the positive side as the U.S. Dollar Index declined lower. Some leading indexes that have reversed earlier losses include PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ), iShares Russell 2000 Index (ETF) (NYSEARCA:IWM), and the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA).

Nicholas Santiago

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