The chart below basically says it all. The green and red bars represent the U.S. Dollar Index futures (DX H2), the black and white bars represent the S&P 500 Index e-mini futures (ES H2). Traders can easily see the inverse relationship between these two leading indexes. We can all forget the news and simply follow this chart. This critically important chart tells us the direction of the stock market. At this time, the stock market cannot trade higher with a stronger U.S. Dollar Index. The only time that the stock market rallies is when the U.S. Dollar Index deflates and trades lower. All traders must keep an eye on the U.S. Dollar Index at all times. It is really the only chart that matters.

Nicholas Santiago
IntheMoneyStocks.com

Views: 58

Tags: FXE, SPY, UDN, UUP

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