This morning the second quarter Gross Domestic Product(GDP) results were released by the Commerce Department. The second quarter Gross Domestic Product reported was 2.4%. This is sharply lower from the revised first quarter number of 3.7%. Economists had expected the second quarter number to be 2.5%. Therefore, today’s number was not a big surprise. What does this all mean for the market?

Well, today the market is starting out under pressure with the SPDR S&P 500 ETF (NYSE:SPY) trading lower by 1.06 to $109.20. Most commodity stocks are under pressure this morning and this is a sign of deflation. Leading commodity stocks such as Cliffs Natural Resources Inc (NYSE:CLF), and Southern Copper Corp (NYSE:SCCO) are trading lower and remain under pressure. Remember when the U.S. Dollar Index is trading higher on the trading session this will often push the commodity stocks lower. Therefore, always keep a dollar chart open as most professional traders will key off this chart. Remember when the dollar is higher the stock market indexes will deflate. Should the dollar decline or sell off the market will inflate higher.

Since the July lows the markets have surged higher climbing about 10.0 percent from that level. However, since July 16th, the major indexes have been very choppy and volatile. This type of volatile action could be expected going forward. Please remember to keep an eye on the U.S. Dollar Index as that chart will generally give traders a good indication of where the stock indexes are trading. This morning the U.S. Dollar Index is trading higher by 0.15 cents to $81.79 and the market is obviously trading lower.

- About the Author: Nicholas Santiago started trading in 1991. In 1997, he became a licensed Series 7 and 63 registered representative. He managed money for a large, affluent private client group. After applying his knowledge to his client base, he decided it was time to begin teaching those interested in learning his methods. He is an expert in Technical Analysis. He has become an accomplished technician in the studies of Elliot Wave, Gann Theory, Dow Theory and Cycle Theory. In 2007, he partnered with Gareth Soloway to form InTheMoneyStocks.Com and realize his dream of educating others about the truth of the markets. Article Source

Overnight Developments

• Global stocks are mixed with the European Euro Stoxx 50 Index up +0.73% and Sep S&Ps up +2.90 points. The dollar is little changed and Treasuries and stock indexes are higher after the Group of 20 leaders meeting over the weekend in Toronto said they would focus on nurturing economic growth and cutting deficits. Group leaders also agreed to pursue higher capital requirements for banks once their economic recoveries gain momentum. The G-20 leaders endorsed targets to cut their deficits at least by half by 2013 and stabilize their debt-to-output ratios by 2016. Stock gains in Europe were led higher by strength in automakers when PSA Peugeot Citroen climbed 2.7% after La Lettre de L’Expansion reported that France’s biggest carmaker lifted its sales target for the DS3 model to 70,000 from 45,000 and Porsche SE rose 2.3% after Bankhaus Metzler upgraded the carmaker to "buy" from "sell."
• The Asian markets today closed mixed with Japan down -0.45%, Hong Kong +0.17%, China -0.71%, Taiwan +0.35%, Australia -0.65%, Singapore +0.64%, South Korea -0.04%, India +1.14%. Asian stocks were undercut after the weekend meeting of Group of 20 leaders failed to reassure investors about the strength of the global economic recovery. Speaking at the G-20 Summit in Toronto, a Chinese Ministry of Commerce director general said that his country’s pledge for a more flexible yuan will slow its exports this year and add to difficulties that include the European debt crisis and rising costs. China, the world’s largest exporter, is aiming to raise domestic consumption and reduce its reliance on exports for economic growth. Chinese coal companies closed lower after China’s National Development and Reform Commission ordered China’s coal companies to keep prices agreed to in annual supply contracts stable as the government seeks ways to manage inflation. Japanese stocks closed lower after Japan’s May retail sales climbed a slower-than-expected 2.8% y/y, the slowest pace since Jan, and a sign that government incentives to purchase cars and household appliances are fading. Japan’s May retail sales slumped a seasonally adjusted -2.0% m/m, the biggest drop in 5 years as automobile sales in May fell -5.9% m/m and household machinery, which includes appliances such as flat-screen TVs, tumbled -7.9% m/m in May.

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