Light Volume And A Dollar Pullback Inflate Markets Right Back Up

As we all know when the volume is very light it is very difficult to sell the markets. Light volume will usually give the major stock indexes an upside bias. However, when the U.S. Dollar Index declines in a light volume environment this will often help inflate the markets up even more. Look at the green line on the chart below surge higher as the dollar pulled back intra-day. However, it is important to note that when the dollar rises or trades higher the markets will usually deflate or sell off. It is still all about the U.S. Dollar Index.