The selloff of the last two weeks may feel significant, particularly if you’ve been watching it unfold on the intraday charts. But take a look at the weekly chart: So far, the move has surpassed only a single ‘internal’ low. DXY would now need to take out a second low at 93.25 to hint that something more interesting than a garden-variety correction is in progress. Keep in mind also that the move beneath that low would have to occur without an upward correction along the way in order to suggest there’s bear-market power behind the selling. _______ UPDATE (May 13, 7:59 p.m. EDT): Uh-oh. A minor, downtrending ABC pattern targets 93.20, and although I see a tradable bounce from that number, the damage will already have been done relative to the 93.25 ‘external’ low noted above. _______ UPDATE (May 28): My 93.20 target missed the 93.16 bottom of a very powerful rally by four cents. DXY has since hit 97.78, and although there was no discussion of this in the chat room, I trust that the target was useful to at least some of you. Please give me a shout if you hold a position based on my forecast.
