This morning, the U.S. Dollar Index futures are trading by 0.29 cents to $75.59 a share. When the U.S. Dollar Index trades higher on the session the major stock indexes will usually deflate and trade lower. The energy sector looks to be declining the most in the early part of the trading session. Leading integrated energy stocks such as Exxon Mobil Corp.(NYSE:XOM), Chevron Corp.(NYSE:CVX), and ConocoPhillips(NYSE:COP) are leading the sector lower. When the leading energy stocks fall the major stock market indexes will normally follow these stocks lower. Energy stocks account for 16.0 percent of the S&P 500 Index.
Agriculture stocks are also adversely effected when the U.S. Dollar Index trades higher on the session. The agriculture stocks will often behave much like a commodity stock. Traders can easily see how leading agriculture stocks such as Potash Inc.(NYSE:POT), Mosaic Co.(NYSE:MOS), and Monsanto Co.(NYSE:MON) are all under heavy selling pressure this morning. Potash stock will have some short term intra-day support around the $51.50 level. Short term day traders can look for a quick small bounce around this area on POT.
Right now, the major stock and commodity indexes are trading inverse to the U.S. Dollar Index. The entire inflation rally from March 2009 has been based off of the weaker U.S. Dollar. At this time, the dollar is dictating every move in this market. Should the U.S. Dollar Index pullback intra-day it would be prudent to expect the markets to catch a bid higher.
Nicholas Santiago
InTheMoneyStocks.com
