A 15 year look at the dollar index. Basic conclusion: Worth watching to get long.

When the dollar was .82 to the Euro we recommended long positions, and when it was 1.36 we recommended taking the money and running. At 3 and in the zone thereof the dollar should find buying demand. Three major bottoms are in this area. The present formation is not finished, but a solid bounce off the line, or the zone would put us long on a light scale in basis. We would continue scaling in on the strong penetration of the last downtrend line. We would attempt to scale out or hedge on wave thrusts up, as the downwaves are vacuum-like and could suck you under. We have a proprietary wave analysis but it is presently only available to clients. Notice how the use of simple trendlines is extremely useful in looking at the chart. Once again the truism of broken long term trendlines is validated. Stay long at your peril when they are broken.

The present formation could well turn out like that from 92-96, (quite profitable). And, of course, it is too early to be long. In fact our letter a few weeks ago recommended shorts. The exact timing of the buy will be subject to the chart formation at the time.

Notice the resemblance of the tops at 1 and 2.

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