Dollar Reinforcing Strength…

05/31/12 INSIIDE Track:  

“The Dollar Index gave a weekly 2 Close Reversal higher on May 4th – after spiking to new 8-week lows on May 1st and retesting its intra-year low.  

            It rallied to new intra-quarter highs and neutralized its intra-year downtrend the following week, removing most of the intermediate factors that argued for a spike to new lows before the next impulse wave of this advance (from August 2011).

            This action violated near-term expectations while reinforcing the bigger picture and corroborating long positions from late-2011 (triggered around 74.00–74.50/DX).  On a 1-2 month basis, this should spur a test of 85.00/DX – where the current rally would equal the magnitude of the preceding one.

            On a larger-degree basis, the upside objective remains around 92.50/DX…So, it would not be surprising to see a test of 85.00 – in the next 4-8 weeks – followed by some consolidation…

            An intervening, 2-3 month peak could arrive in early-July – 180 degrees from the early-January 2012 peak, 360 degrees from the early-July 2011 peak and 540 degrees from the early-January 2011 peak.  

            In other words, July 9–13, 2012 is the next phase of a 180-degree/26-week high-high-high-(high) Cycle Progression…The month of July 2012 is also the culmination of a 40-month  high-high-(high) Cycle Progression – already linking the November 2005 & March 2009 peaks.  So, July 2012 could mark a fairly significant peak (that holds for at least a few months). 

            The Euro did the inverse after failing to make it above 1.3389/ECM (the level needed to turn the weekly 21 MAC positive) and subsequently breaking below support.  

            It began the month of May by spiking to new recent highs while perpetuating a 5-week low-high-high-(high) Cycle Progression.  This yielded an outside-week/2 Close Reversal sell signal on May 4th – turning the intermediate outlook negative while neutralizing the intra-year trend and keeping the weekly 21 MAC heading lower.

            This was quickly corroborated – during the week of May 7–11th – by the weekly trend turning neutral (from up) and the Euro closing the week below its weekly 21 Low MAC.  The weekly & intra-year trends later turned down, just as the Euro is entering an even more precarious time…

            So, from a 6-12 month basis, this dovetails with the cycles described for early-July (in the Dollar).  If a Euro bottom is seen at that time, it would be slightly more than 1 month after the long-term channels reversed down.”

Dollar Index reinforcing multi-year cycle low in 2011;  July 2012 could/should time multi-month peak – while projecting larger-degree focus to late-2015 (Nov. 2015?) – the next phase of the 40-month cycle – for a more important peak… after a multi-year advance.