It's All About the Dollar (uup, tlt, uso, wtic)
More and more, strategists, commentators and investors are coming to the same conclusion: it's all about the U.S. dollar. When the dollar rallies, stocks and commodities sell off. When the dollar falls, then our favorite assets can rally.
It almost doesn't matter what the time-frame is. Evidence is mounting that even hourly moves for stock prices get their direction from the dollar's latest move.
It is suggested that this nearly obsessive dollar-following trading pattern originates with hedge funds, who have modeled the relative valuation of the U.S. dollar into their trading game plan.
I know, sometimes it seems there's just too much information to process on a daily basis. There's the latest economic data from the U.S., Europe and China. Then there are earnings projections and valuations for individual stocks and sectors. There's Fed monetary policy and Federal fiscal policy to factor in. Throw in oil prices, the latest news from the Middle East, and even the latest weather patterns, and things start to feel overwhelming.
But please, don't throw your hands up and walk away. Because there are some easy short-cuts you can use to stay on top of the market's every move...
*****Here at Daily Profit, we discuss some of the important indicators on somewhat regular basis. Though I'll admit, we sometimes do so on an individual basis. So let's put some of these indicators together to get a view of the big picture.
Oil prices are a good indication of growth expectations. When economic growth is expanding, it's expected that more oil will be used and the price will be strong. You can follow an exchange traded fund like the U.S. Oil Fund (NYSE:USO) or you can follow a spot-price chart, like the one for West Texas Intermediate Crude, which you can find at www.stockcharts.com using the symbol: $WTIC.
The iShares Barclays 20 Year Treasury Bond Fund (TLT), is a good asset to track to gauge how investors feel about risk in the stock market and economy.
I like to use the Wall Street Journal Online as a source for current P/E ratios and dividend yields for the major indices. This helps to keep a handle on whether stocks are attractive in a general sense.
I've printed the U.S. Dollar Index chart several times. The last time, was when it was zeroing in on 71 a few weeks ago. We discussed the potential of a rally for the dollar, and that rally coincided with the drop for silver prices.
The U.S. Dollar Index chart is available at www.stockcharts.com too, using the symbol $USD.
You can also track the dollar with the PowerShares DB US Dollar Index Bullish ETF (UUP).
Since we know that the U.S. dollar is a highly important catalyst, it is advisable to get familiar with dollar charts like the $USD and UUP.
*****Now, I also have another excellent source for you: Jason Cimpl, the trading strategist for TradeMaster Daily Stock Alerts.
Jason is a gifted analyst. He has been all over the U.S. dollar action, perfectly calling just about every important top and bottom for the dollar for the last 2 years. And I can virtually guarantee that if you follow his commentary and get familiar with the asset charts I've mentioned here, you can very quickly get a firm grasp on what's going on in the financial markets.
But the very best part of all this is: you don't have to be a paying subscriber to TradeMaster Daily Stock Alerts to get Jason's analysis on the U.S. dollar and the stock market. You can simply sign up to receive his free e-letter TradeMaster Market Forecast, and you'll get his highly accurate analysis on the dollar, oil, precious metals, and the stock market.
Of course, you don't get everything withTradeMaster Market Forecast. Jason's weekly trading and index analysis videos are reserved for his members. And so are his profitable stock recommendations.
But for daily commentary on what's driving the stock market, the U.S. dollar and commodities, there's no better source than TradeMaster Market Forecast. You can use this linkto sign up for free today.
