This afternoon, the major stock market indexes have rallied once again after more news out of the European Union. This time around the European Union leaders have released a statement that they may run two separate rescue funds. Who really knows what this news actually means? If you are a trader then you should know that the European news caused the U.S. Dollar Index futures (DX Z1) to decline. When the U.S. Dollar Index declines the major stock market indexes inflate, it is that simple. The news out of the European Union is becoming impossible to keep up with. Fortunately, the U.S. Dollar Index tells us everything that we need to know.
Gold and silver have also been excellent indicators of inflation and deflation. The SPDR Gold Shares (NYSE:GLD) bottomed out intra-day around 10:00 am EST. Since that low pivot the GLD has rallied higher by over $3.00 to $168.40 a share. Gold was signaling to us that the major stock indexes were going to be inflated at some point in the trading session.
The iShares Silver Trust (NYSE:SLV) bottomed this morning along with the GLD. The SLV has rallied higher by nearly $2.00 to $31.96 a share. Gold and silver prove to telegraph almost every stock market move before it happens, even on an intra-day basis.
Traders and investors must follow the U.S. Dollar Index, gold, and silver even if you do not trade these equities. These three equities are priceless to all traders and will help everyone decipher the news coming out of the European Union.
Nicholas Santiago
InTheMoneyStocks.com
