Nearly every trading day the U.S. Dollar Index futures (DX-M2) will pullback or decline when the index trades higher before the opening bell. As you may know, when the U.S. Dollar Index declines the major stock indexes will usually rally and trade higher. The opposite is true when the dollar rallies as the major stock will usually decline and trade lower. This afternoon, the U.S. Dollar Index surged higher after the FOMC minutes were released. Once the U.S. Dollar Index took off to the upside the major stock indexes sold off. Earlier today, the Dow Jones Industrial Average (DJIA) was trading as high as 13,265.00. This afternoon, the U.S. Dollar Index rallied higher by 0.70 cents to $79.65 per contract and the DJIA is now trading around 13,165.00. In essence, every trade is a trade on the dollar.
Many investors are now talking about the U.S. Dollar Index and higher bond yields. Bond yields on the 10 and 30 year U.S. Treasury Note both surged higher. This rally in the yields can be easily seen in the ProShares UltraShort 20+ Year Treasury ETF (NYSEARCA:TBT), and the ProShares UltraShort 7-10 Year Treasury ETF (NYSEARCA:PST). On the flip side, the iShares Barclays 20+ Yr Treas.Bond ETF (NYSEARCA:TLT) is trading lower by 1.60 percent. Gold and silver also turned lower today as the U.S. Dollar Index rallied higher. Traders and investors must always keep an eye on the U.S. Dollar Index chart.