This morning the S&P 500 e-mini futures are trading higher by 8.00 points to $1110.00. As we all know by now when the U.S. Dollar drops the stock market indexes inflate and trade higher. In early July when the major stock indexes found a low the U.S. Dollar Index was trading just above the $86.00 level. Today the dollar is trading as low as $81.59 this morning fulfilling the completion of a major daily chart head and shoulders pattern(bearish pattern). When it comes to the U.S. Dollar Index a $4.41 decline from that bearish daily chart pattern is a lot of meat and potatoes. At this stage the dollar should have strong support around the $80.64 area which is the daily chart 200 moving average.
Corporate earnings have been coming in droves. Some are well received by the street and some have been crushed lower. In any case the market does not really care about that stuff. The market cares about where the dollar is trading and if the markets can keep up the inflation rally. Stay tuned as the U.S. Dollar Index will come into important support levels shortly.
Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com
