Thursday, October 30, 2008

Dollar topping

I've been noting for a while that the strength in the dollar has been putting pressure on the markets along with commodities. I've also pointed out in the past that parabolic move are prone to collapse. I think it's safe to say we've seen a parabolic move in the dollar.

We are also moving close to the timing band for the 19 week cycle low in the dollar. Now that we have a swing high in place I think the odds are good the dollar has topped and will be heading lower for the next 5-7 weeks into that cycle low.

I expect this will take the pressure off the markets giving us the counter trend rally we've been looking for that should separate the first and second phase of the bear market.

The next phase will probably be accompanied by a much more orderly rise in the dollar.