This morning, the U.S. Dollar Index topped out around 4:30 am EST. This was the same exact time that the S&P 500 Index e-mini futures (ES-M2) bottomed out. Traders can easily see how these two indexes continue to trade inverse to each other. When the U.S. Dollar is devalued it will inflate asset prices around the world. Traders can easily see how the large bank stocks have surged higher today. As long as this sector remains strong the major stock market indexes can trade higher. Leading financial stocks such as J.P. Morgan Chase & Co (NYSE:JPM), Goldman Sachs Corp (NYSE:GS), and BlackRock Inc (NYSE:BLK) are all climbing higher on the session. Should these leading financial stocks reverse or turn lower then there could be problems in the market. Until that time, the markets remain in rally mode.
Traders should keep a close eye on the U.S. Dollar Index. The PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP) is another way that traders can follow the U.S. Dollar intra-day. Remember, if you control the dollar you can control the world.