The Markets Continue To Bounce As The Dollar Stalls Then Falls
The key to the market going up is simply a weaker dollar. Friday, the dollar, PowerShares DB US Dollar Index Bullish (NYSE: UUP) slammed into the 200 moving average resistance point. This clearly showed a turning point near term on the dollar to the downside. Monday the markets rallied as the dollar pulled back off the 200ma. Today again the dollar is falling and sure enough, the markets are moving higher.
Commodity stocks have been the big catalyst to this market surge. Stocks like Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Southern Copper Corporation (NYSE: PCU), Exxon Mobil Corporation (NYSE: XOM) have all taken off for two consecutive days. Many of the top commodity stocks have a direct link with the DOW or S&P 500 thus when they move up, the markets move higher. Not only has the dollar falling back been a big help to the bounce but Exxon Mobil reported solid earnings Monday morning. Exxon Mobil is up almost $3.00 from its Friday close. That is a solid move. Per my article yesterday Top 10: Commodity Stocks Bouncing Off Major Support, these all were mentioned and even given out late last week!
Watch for this commodity move higher to run out of steam later this week. Look for the overall market to be wild and be a short term swing traders heaven.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
