By Nicholas Santiago on June 3rd, 2010 9:55am Eastern Time
Once again the market indexes are starting the day higher at the open as the U.S. Dollar Index trades basically flat on the day. This action comes after yesterday's massive point rally. Simply put when the dollar is strong the market deflates. The opposite is true as the dollar declines the markets inflate and trade higher. It seems that the only time the dollar does not effect the stock market is when the trading volume is extremely light. That was partly the case yesterday as it was one of the lightest trading session's in nearly a month.
Traders and investors that want to trade the U.S. Dollar index to the long side can use the PowerShares DB US Dollar Index Bullish (NYSE:UUP). For the traders and investors that would like to trade the dollar to the downside or short the currency can use the PowerShares DB US Dollar Index Bearish (NYSE:UDN).
This morning spot gold is trading lower by 2.00 points to $1225.00 an ounce as fear subsides. The popular SPDR Gold Shares (NYSE:GLD) are trading lower by 0.49 cents to $119.26.
Oil is trading higher by 1.00 point to $73.58 a barrel. The United States Oil Fund (NYSE:USO) is trading lower by 0.13 to $33.65. Oil and most other commodities stocks will trade higher should the dollar pullback or decline.
Tomorrow is the highly anticipated government jobs report for the month of May. Yesterday the President and Vice President of the Unites States basically said that the report would be stellar. Therefore, one must think how much of yesterday's rally is already factored into the market. However, the U.S. Dollar is still the magic wand behind every move in this market.
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