Momma Mia! The Only Chart You Need To Follow
This morning, the major stock indexes are trading lower as the problems in Italy and the European Union seem to be growing by the minute. The U.S. Dollar Index (DX U1) was soaring higher ahead of the opening bell, trading as high as $76.37 per contract. Since that high print at 9:10 am EST, the U.S. Dollar Index has pulled back to $76.18 per contract. When the U.S. Dollar Index declines the major stock indexes will inflate and trade higher. The S&P 500 Index has bounced off the lows by 4.00 points as soon as the U.S. Dollar Index pulled back. Traders must keep an eye on the U.S. Dollar Index at all times throughout the trading session as the major stock indexes will usually trade inverse to the dollar.
Some stocks that will usually react inversely to the U.S. Dollar Index include Chevron Corp.(NYSE:CVX), Devon Energy Corp.(NYSE:DVN), and Potash Corp.(NYSE:POT). Should the U.S. Dollar Index start to bounce higher or make new highs on the trading session it would be prudent to expect most of the leading stock indexes to deflate and trade lower.