As of Memorial Day, the Dollar Index has rallied to within 0.12 points of the 96.12 target given in my last tout. It will need to push somewhat higher, however, to suggest that the long-term bull market is back on track. Specifically, a thrust exceeding the 96.40 peak labeled in the chart would generate a powerful new impulse leg of daily-chart degree. As things stand, the closest short-term target will only get DXY to 96.29 (A=94.33 on 5/17). Traders please note: A bc-type pullback from just above the 96.22 peak recorded on March 22 could provide an excellent opportunity to get long via camouflage. In any case, this would be analytically useful for projecting a precise target for the next minor leg up. If there is a fundamental reason to think the rally will continue, it lies in growing perceptions that the Fed can now raise rates without trashing the stock market. This is the kind of ‘story’ that could be supportive of the dollar for quite a while. It doesn’t hurt that eurozone rates are negative and slipping into a bog of deflation that portends continued, weak economic performance.  For a contrarian view on the potentially negative effects of Fed tightening, click here, then click again on the phrase ‘Should the Fed raise rates’.