The recangle (the right vertical) points to Feb 17 2010 as the next inflection point (the left vertical starts at a known low – 17th March 2008. The half way point of the recatnagle corresponds to the March 09 peak of the DXY. The line from the peak of the DXY in March 2009 down to my 17th Feb inflection point at 70.70 is the so-called time&price line because it potentially marries the two together – when you hit the imaginary line at any point, you are up against resistance/support. Of course, in this case, we are assuming that the chart pattern is indicating a classic ‘double bottom’ formation in the absence of the USD turning at one of the other inflection points along the way. What happens at the double bottom level (70.70) is still anyone’s guess – but my own view is that it will be either death (impulse move lower) or ressurection (mark the secular low) for the USD

There are two other important elements to it which re-inforce the probability of the Feb 2010 date being so critical.

One of them is a second time cycle I have been using since July this year: One of the dominant shorter term cycles for the USD is a 117-day cycle. Start from the 6/12/06 low and you will clearly see this cycle. Interestingly, there are exactly 6 117-day cycles in the 702 day period that sits within the rectangle. Six is a key number in my cycle studies.

The other important element I won’t divulge.

Apologies if I haven’t been clear – having to write this quickly as lots to do.

phew, got there in the end ! thought it didn’t like copy & paste, but in fact seemed to be quotation marks it deemed distasteful !

The rolling 120 day correlation between the DXY and the S&P is now -95% – the closest inverse relationship between the two in well over 20 years… possibly ever.