As we all know the economic news was terrible today. New homes sales plunged 33% in the month of May after the government tax credit expired. However, the market has been rising higher after that initial sell off at 10:00 am EST. What is the reason for the move? Simply it is the falling or declining U.S. Dollar. When the dollar declines the markets inflate. When the dollar rises the markets decline. It is that simple. Forget the news, forget the Fed, forget everything. Until this relationship between the dollar and the stock markets decouple it is the most important chart that a trader can use.
