This morning, all of the major stock indexes are trading sharply lower. The problems in the European Union and the possible bankruptcy of MF Global Holdings Ltd (NYSE:MF) seems to be too much for investors. The real catalyst for today's decline is the strength in the U.S. Dollar Index futures (DX Z1), which are trading higher by 0.94 cents to $76.15 per contract. When the U.S. Dollar Index rallies the major stock indexes deflate and trade lower. Since October 4, 2011 the U.S. Dollar Index has declined sharply lower helping to inflate everything under the sun. If the U.S. Dollar Index declines intra-day it would be prudent to expect an intra-day bounce of the lows for the major stock indexes.
Everything that is metal related is trading lower this morning. Leading stocks such as Freeport McMoRan Copper & Gold Inc (NYSE:FCX), iPath Dow Jones-UBS Copper Subindex Total Return ETN (AMEX:JJC), Southern Copper Corp (NYSE:SCCO), and U.S. Steel Corp (NYSE:X) are all under sharp selling pressure today. These stocks will usually be the first stocks to be effected by the stronger U.S. Dollar Index. If the U.S. Dollar Index fades throughout the trading session these stocks are likely to bounce off the morning lows.