By InTheMoneyStocks.com on February 9th, 2010 12:49pm Eastern Time
The U.S Dollar has had a meteoric rise in just the last couple months. However, just as fast as it has spiked higher, it fell faster and harder today. Just as the 11am ET hour hit, the dollar collapsed. This was not a small drop, this was a fall off a cliff type move. While many think the dollar being stronger is a bonus for the United States, for Wall Street, a weaker dollar is key.
No sooner did the dollar PowerShares DB US Dollar Index Bullish (NYSE:UUP) start to collapse, the markets ripped higher. Why you may ask does the dollar falling create a buying frenzy on Wall Street? Mainly due to the commodity spike a weak dollar creates. As the dollar collapsed, oil shot higher. United States Oil Fund (NYSE:USO) ran up like it had just caught the squeeze of the century. In tune with that move, as oil moves up, so will stocks that deal with oil like Exxon Mobil Corp (NYSE:XOM). Exxon Mobil Corp recently reported great earnings as well and looks to have some extra fuel in its tank today. Oil has been near term oversold and appears to be in for some near term strengthening.
As the dollar continues to collapse then spike continue to watch the technical levels. This market is a cowboy market and needs to be traded with caution. I have unloaded my 2x long oil on ProSharesUltra DJ-AIG Crude Oil (NYSE:UCO) from my entry of $9.60 to my exit of $10.52 today. All members of InTheMoneyStocks.com received that trade live as it happened last Friday.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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