It’s no coincidence that the stock market’s steep rise in February began just days after an equally steep rise in the dollar stalled in late January.  The dollar has been moving sideways ever since, extending a monotonous sine-wave correction that is setting up the dollar’s next powerful rally. It projects to at least 96.30, a relatively modest move of about 2% that would leave DXY a tad shy of  a small but technically important peak at 99.25 recorded in August of 2003 (see inset). The dollar has already blown past a more significant ‘external’ peak at 99.25 from 2005, so it’s got nothing to prove. But if the next upthrust eventually exceeds the 96.30 target as I expect, it would add a robust new dimension to the bull market begun in earnest last year.  It would also put considerable pressure on U.S. stocks, perhaps even ending February’s joy-ride on Wall Street. _______ UPDATE (February 26, 10:15 p.m. EST): Yesterday’s sharp rally generated a bullish impulse leg on the daily chart. If this is the breakout we’ve been waiting for, a run-up to 96.58 is imminent. If DXY needs more time to  consolidate, look for oscillations around a midpoint pivot at 94.92 in the day ahead (daily chart, A= 92.15 on 1/21). _______ UPDATE (March 6, 12:04 a.m.): DXY popped to 96.59 (see inset, a fresh chart), a penny from the target identified above a week ago. Any higher would imply bulls are eager to take on the 99.25 peak also mentioned above. A move through it within the next few weeks would imply the dollar bull is just warming up. _______ UPDATE (March 15, 11:32 p.m.): Bulls proved unstoppable once again last week, pushing above the 99.25 ‘external’ peak with no evident strain. This has further extended the impulsive rally begun last May, offering a picture of power that could eventually challenge peaks near 121 that occurred almost 14 years ago. More immediately, I’ll be looking for a pullback from exactly 101.10 (weekly, A=87.63 on 12/19/14)._______ UPDATE (March 20, 12:31 a.m.): The pullback we were expecting came from slightly below the 101.10 pivot. Now, if the bull is still feisty, corrective abc’s should not reach their d targets._______UPDATE (March 2, 5:53 p.m.): Friday’s corrective action breached a midpoint support (see inset), implying that it will take at least somewhat lower prices to shake out the last of the nervous Nellies. If so, look for a tradable low at the 96.30 target shown.  _______ UPDATE (March 25, 12:42 a.m.): DXY bounced off a 96.39 low yesterday, but if it dives anew, breaching my target, look for a more durable low at 95.70.  This is a back-up-the-truck number for bulls who have been waiting out the correction.  _______ UPDATE (April 2, 12:13 a.m.): The dollar went no lower than 96.17, stranding our prayerful bid. It has moved higher since but seems in no great hurry to make significant new highs.  More consolidation coming.