DXY – NYBOT Dollar Index (Last:104.22 )

I was expecting the Dollar Index to correct down to 94, but bulls have re-asserted themselves well above those levels. Last week’s powerful finishing stroke was yet another body blow for the Fed, which is desperately trying to seem in control of the financial system as the U.S. economy sinks into recession. The strong dollar will further depress the earnings of American multinationals while squeezing the air from every debtor on earth who owes dollars. A strong dollar is the last thing anyone other than OPEC wants (they get paid in dollars, which are better than gold these days, and far better than fleetingly popular rubles), but the market-driven uptrend has grown too powerful to suppress with the usual smoke-and-mirrors tactics.  From a technical standpoint, bulls appear to have clinched more upside to at least 106.49 with Friday’s leap past the 103.90 midpoint pivot. We have another outstanding target at 112.14 tied to a much larger pattern.