This morning, all of the major stock market indexes are rebounding higher today. It is important to note that all of the major stock market indexes are severely oversold in the near term, therefore, a short term bounce is overdue. The catalyst for the rising stock market is undoubtedly the weaker U.S. Dollar Index. As we should all know by now, when the dollar dips the market flips. Most leading stock sectors are catching a bid higher as the U.S. Dollar declines and this tells us that most sectors trade inverse to the dollar. Traders must be on watch if the U.S. Dollar Index rises or catches a bid later, the major stock indexes could come under pressure again and give back the early gains. As I always say, every trade is a trade on the U.S. Dollar Index.
Some leading equities that will usually increase when the U.S. Dollar Index declines include BHP Billiton Limited (ADR) (NYSE:BHP), Rio Tinto plc (ADR) (NYSE:RIO), Cliffs Natural Resources Inc (NYSE:CLF), and the United States Gasoline Fund, LP (NYSEARCA:UGA). Remember, most commodity stocks will inflate with a weaker U.S. Dollar.