The SPDR S&P 500 ETF (NYSE:SPY) hovers at the lows of the day and is slowly moving towards the double bottom from Friday. This will be short term support. It is all on the back of a fall in the Euro CurrencyShares Euro Trust (NYSE:FXE) in mid morning trading. The Dollar PowerShares DB US Dollar Index Bullish (NYSE:UUP) in response is appreciating in value.
As the Euro falls and the Dollar rises, the markets are moving lower. For this market to rally, the Euro must bounce back. As the markets remain weak on a drop in the Euro, commodity stocks continue to be under the most pressure. Exxon Mobil Corporation (NYSE:XOM) is lower by over 1% and metal stocks like United States Steel Corporation (NYSE:X) are down nearly 5% on the day.
Commodity stocks whether it is oil, coal, steel or copper have lead the decline in the markets. This stems from the dollar being so strong and a major problem with the global recovery Wall Street had believed in. If the dollar can weaken, oil will bounce along with the commodities and these pounded stocks will see a short resurgence.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
