Last Ditch Effort Did Not Work
This afternoon, the major stock indexes are still under severe selling pressure. The Dow Jones Industrial Average is trading lower by more than 440.00 points to 10,674.00. The one factor that is helping the stock indexes from declining lower is the quick drop in the U.S. Dollar Index. Around 2:20 pm EST there was news released that the European Union was looking to quickly capitalize the banks in the Euro-zone. We have to chuckle, what have they been doing for the past two years? All of the sudden they are going to quickly flood the banks with money, this is scary when you think about it.
In any case, the U.S. Dollar Index futures sold off by 0.40 cents in seconds and this caused a spike higher in the major stock indexes. Often when markets are selling off this sharply the institutions will try anything to cause a short squeeze to get the markets to trade higher. At this stage of the game most traders and investors must be wondering why the European Union is even in place. Greece could simply just be the tip of the iceberg. What is going to happen with Italy, Spain, and France over the next six months? That is the question that traders are asking themselves now. The days where the institutions drop the U.S. Dollar Index and cause a short squeeze might be over for the time being.