Light Volume And The Falling Dollar Save The Day

s this May 10, 2011 or August 10th, 2011? Where has all of the volume gone? This is one of the lightest trading volume sessions of 2011. As we should all know by now, when the trading volume is very light that will generally favor the upside in the stock market. This afternoon the SPDR S&P 500 Trust (NYSE:SPY) is trading just 69.3 million shares as of 2:45 pm EST. What a joke! Just three trading days ago the SPY traded over 222 million shares. How can the volume change so dramatically. The Citigroup Inc. (NYSE:C) 10 for 1 reverse split can’t be the total blame for the light trading volume.

The U.S. Dollar Index (DXY) is now trading lower by 0.10 cents to to $74.63. The DXY did trade as high as $74.86 this morning before declining lower on the trading session. Again, as we all know by now when the DXY declines the major stock and commodity indexes will trade higher.

So there you have it. Light volume that is reminiscent of the summer doldrums and a falling U.S. Dollar Index lead to a higher stock and commodity market. Even crude is trading higher today and that move higher comes after margin hikes. Every trade is essentially a trade on the DXY at this time.

About Nicholas Santiago 576 Articles


Nicholas Santiago started trading in 1991. In 1997, he became a licensed Series 7 and 63 registered representative. He managed money for a large, affluent private client group. After applying his knowledge to his client base, he decided it was time to begin teaching those interested in learning his methods. He is an expert in Technical Analysis. He has become an accomplished technician in the studies of Elliot Wave, Gann Theory, Dow Theory and Cycle Theory. In 2007, he partnered with Gareth Soloway to form InTheMoneyStocks.Com and realize his dream of educating others about the truth of the markets.

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