Berlusconi Bounce Or Just Another U.S. Dollar Decline?

The major stock indexes have played out just the same way they did yesterday. The markets sold off into the noon hour only to reverse and trade sharply higher throughout the afternoon. The intra-day pivot points and the chart patterns in the session are almost exactly the same as yesterday. This time the catalyst for the stock market rally was once again the declining U.S. Dollar Index. The U.S. Dollar Index plummeted lower when the Prime Minister of Italy, Silvio Berlusconi, said that he may resign after the country passes their 2012 budget.

This market seems to go into a euphoric state on any word out of Europe. So far, Greek debt crisis still remains unresolved. The only thing that happened there is that the Greek PM George Papandreou said that he will resign. Now Italy’s Berlusconi has said the same thing. We can only imagine how far the U.S. Dollar would decline if Germany’s Angela Merkel and France’s Nicolas Sarkozy would resign. We might hit 50,000 on the Dow Jones Industrial Average. These market moves are really ridiculous when you think about it. The European Union needs to still come up with $1.4 trillion just to keep that failed science project of a union functioning.

Traders must continue to follow the U.S. Dollar Index extremely closely. At this time, the U.S. Dollar Index continues to trade inverse the major stock indexes around the world. As long as the dollar continues to decline the markets will continue to inflate and trade higher.

About Nicholas Santiago 575 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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