Dollar Surge Means Another Down Day

In the past, the major stock indexes would rarely decline on a Friday, with this type of action occurring so often we coined the phrase, Friday effect. However, over the past month the major stock indexes have been plummeting on Friday’s and we may have to make up a new phrase called the Friday defect. This morning, the catalyst for the stock market decline is the rising U.S. Dollar Index. Obviously, there are many other problems in the economy causing a weak stock market such as the European debt crisis, high Asian inflation, and 9.1 percent unemployment in the United States just to name a few. The stock market is no longer able to climb the wall of worry at this time.

Oil, gold, and silver, are all coming under heavy selling pressure as the U.S. Dollar Index rallies higher by 0.43 cents to $74.63 per contract. It would be prudent for short term day traders to look for the stock markets to bounce off the lows intra-day if the U.S. Dollar Index pulls back. However, if the U.S. Dollar Index continues to surge higher on the session then it is very likely the major stock indexes will see further selling pressure throughout the trading session.

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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