Weekend Update

There are indications that the market is prepared to rally once again. We had yet another bounce off support in the DOW 8000 range along with two consecutive "positive reversals" last week. To help understand which stocks are likely to benefit the most from a rally it is helpful to see what is happening with the dollar. The dollar has been trading inversely with equities, particularly commodity related stocks. A weakening dollar will almost certainly benefit commodities. With that in mind I give you the dollar chart:

US Dollar

As you can see it's recent rally appears to be waning. Many important indicators point to a near term Dollar weakening. This of course makes perfect sense if the market is threatening a rally. So how should you take advantage of this? Ideally you want to identify stocks that are 1) not inflated, 2) near support, and 3) poised to make 100-200% gains in a weak dollar/strong market environment.

UPDATE 1/20: No love from the Dollar today, The Dollar index opened this morning at 85.5 which is a push above it's recent 85.3 high, thereby negating any entry attempts into commodity stocks.