Just Follow The Money
This morning before the opening bell, the U.S. Dollar Index futures (DX U1) plummeted lower after trading as high as $75.37 per contract. The U.S Dollar Index futures are trading at $74.61 per contract as the opening bell rings at 9:30 am EST. The catalyst for the decline in the U.S. Dollar Index is the due to the news out of Europe that Greece will have a selective default. As most traders and investors know by now, when the U.S. Dollar Index declines the major stock indexes around the world will inflate and trade higher. At the open all of the major stock indexes are trading higher. Traders must follow the U.S. Dollar Index very closely, Should the U.S. Dollar Index catch a bid higher these stock indexes could deflate and sell off quickly.
Traders should watch the leading commodity stock to be most effected by a stronger U.S. Dollar Index. Stocks such as Freeport McMoRan Inc.(NYSE:FCX), and Southern Copper Corp.(NYSE:SCCO), and Cliffs Natural Resources Inc.(NYSE:CLF) will usually decline quickly on a stronger U.S. Dollar Index. The opposite is true when the U.S. Dollar Index declines, these same stocks will usually jump and inflate higher very quickly. At this time, the major stock indexes and commodities continue to trade inverse to the U.S. Dollar Index.