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Light Volume Monday

This morning the U.S. Dollar Index started the day by trading sharply higher. At 8:30 am EST the U.S. Dollar Index was trading around $79.96. However, since the opening bell rang at the New York Stock Exchange the U.S. Dollar Index has declined a bit and is trading down to the $79.75 area. As we should all know by now when the U.S. Dollar Index declines or pulls back the major stock indexes will inflate and trade higher.

The news out of Europe today was bearish for the European Union. The International Monetary Fund is now pushing to European Union to increase the size of it's emergency bailout fund. The European Officials are split over the bailout fund increase. Other countries in the Europe such as Hungary have received a lower credit rating by Moody's Corp.(NYSEMCO) this morning. Austria is rumored to be next on the list for a lower credit rating. When the countries across the Atlantic Ocean face lower debt ratings this is a positive for the U.S. Dollar Index.

Often on a Monday the volume in the stock market will be very light. Therefore, rarely will the overall markets decline sharply on a Monday. Usually major indexes such as the Dow Jones Industrial Average and the S&P 500 Index will be range bound when the U.S. Dollar Index is trading higher on the day. On Monday's when the U.S. Dollar Index is trading lower on the session the stock market rally usually occurs. Therefore, keep one eye on the U.S. Dollar Index today as the major stock indexes will most likely trade inverse to the dollar.