This morning, the S&P 500 Index e-mini futures (ES Z1) are trading lower by just 4.00 points to 1194.25 per contract. The major stock indexes in the United States don't really seem to care about the news out of Europe or anywhere else, they care about the U.S. Dollar Index. Simply put, when the U.S. Dollar Index declines the stock markets inflate and trade higher. Often, this inverse reaction will occur tick by tick throughout the trading day. Until this relationship is broken traders don't even need to follow the news out of Europe and Asia, just follow the U.S. Dollar Index chart.
Last night, the important and highly followed Shanghai Index (China) rallied again by 0.80 percent. The move higher out of China was caused by currency manipulation as well. The People's Bank Of China (central bank) has lowered their peg to the U.S. Dollar causing their stock market to inflate higher. This is precisely why gold will ultimately become the standard for capital around the world.
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