The major stock market indexes all opened sharply lower this morning. The catalyst for today’s early decline was the increased tension between North and South Korea. Nothing seems to have been resolved between the two countries. There is also continued problems across the European Union. Portugal seems to be the next in line for a bailout. The Euro currency declined again this morning against the U.S. Dollar breaking the technical support area of $133.00 on the Currencyshares Euro Trust(NYSE:FXE).
Today will be a holiday shortened trading session in the United States. Often the light volume following the Thanksgiving Day holiday will help the major stock indexes to trade higher throughout the session. However, the key to every rally in this stock market has been based on the decline of the U.S. Dollar Index. Therefore, if the U.S. Dollar Index can decline intra-day the stock market is likely to inflate and trade higher. Since 8:40 am EST the U.S. Dollar Index has declined by 0.26 cents and this has already helped the Dow Jones Industrial Average and the S&P 500 Index to bounce off the lows made at the open. Should the U.S. Dollar Index rally higher it would be prudent to expect the stock market indexes to pullback and decline again.
