Last night, the S&P 500 Index e-mini futures (ES-M2) traded as low as 1344.75 per contract. This afternoon, the major stock market indexes are trading basically flat. Believe it or not, the S&P 500 Index e-mini futures are trading higher by 5.50 points to 1368.00 per contract. So what saved the markets today? Simply put; it is the same thing that has saved the markets for the past ten years, the falling U.S. Dollar Index. In the overnight trading session the U.S. Dollar Index futures (DX-M2) traded as high as $80.13 per contract. Since that high print the U.S. Dollar Index futures have been declining and are currently trading higher by just 0.07 cents to $79.66 per contract. As long as the U.S. Dollar Index retreats when the major stock indexes are actively trading the major stock indexes will inflate and trade higher.
Some of the leading equities that will react positive to a weaker dollar include Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), ProShares Ultra QQQ (ETF) (NYSEARCA:QLD), ProShares Ultra S&P500 (ETF) (NYSEARCA:SSO), and SPDR Gold Trust (ETF) (NYSEARCA:GLD). Please remember, all of these same equities will deflate and trade lower when the U.S. Dollar Index trades higher during the trading session.