As Inverse As Ever

It is rather amazing to trade day after day and see how the major stock market indexes such as the S&P 500 Index, and the Dow Jones Industrial Average (DJIA), continue to trade inverse to the U.S. Dollar Index (DXY) virtually tick for tick. When the DXY rallies or bounces higher the major stock indexes simply deflate and trade lower. The opposite effect occurs when the U.S. Dollar Index declines the major stock market indexes will inflate and trade higher. Therefore, in order to see higher stock prices the U.S. Dollar Index must decline and trade lower. This is now the only chart of any importance. The news that the financial media reports is really just noise, it is the action in the dollar that moves markets.

Some other trading vehicles that trade opposite the U.S. Dollar Index include the CurrencyShares Euro Trust (NYSE:FXE), iShares Silver Trust (NYSE:SLV), and the iPath DJ-UBS Copper TR Sub-Idx ETN (NYSE:JJC). Remember, every trade is a trade on the U.S. Dollar Index 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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