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DXY – NYBOT Dollar Index (Last:97.48)


The dollar’s steep rally this month is close to generating a powerful impulse leg on the daily chart. Just another 0.15 points (see inset) and DXY will exceed an external peak at 99.25 recorded back in early October. That would refresh the bullish energy of the chart while increasing the odds that any weakness, unless severe, would be corrective and therefore a buying opportunity. This scenario is congruent with my bullish outlook for T-Bonds, but it would also keep gold under pressure. This could turn out to be less threatening than it sounds, since precious metals have held up well recently not only against a strong dollar, but in the face of a stock-market rally that has been nearly relentless. _______ UPDATE (Feb 19, 7:34 p.m. EST): The Dollar Index is closing fast on a clear Hidden Pivot resistance at 100.01. If bulls blow past it, that would suggest that still higher prices, possibly  significantly so, lie ahead. Here’s the chart. _______ UPDATE (Mar 2, 11:11 p.m.): After missing the 100.01 target by a dime, DXY has plummeted $2.61. The key to the chart lies in the fact that the high was bullishly impulsive because it exceeded a small but distinctive ‘external’ peak at 99.89 recorded in May 2017. This suggests the plunge of the last two weeks is corrective and that when it ends bulls will regain dominance.

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