John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (4175)	4/25/2002 11:56:52 PM
From: John Pitera	of 33421

I've been talking about June 11 of 2001 being a Top in the US dollar since June 26th of Last Year!!! Macro cycle over the next few months to 6 months where we see that USD come under significant selling pressure. But that will make US Exports more competitive Globally. It's possible that June 11th was already that inflection point. Message 15999487 It's been a long topping process. We've now enter the breakdown phase of The US Dollar's Decline as it falls below it's 200 DMA. And more significantly, The Slope of the 200 DMA has turned Down. stockcharts.com I've for several years used a rule that a market has entered a true bear Market not just when the Price falls below it's 200 DMA, but when the 200 DMA rolls over and starts to slope downward. With the US Dollar Index It's came down towards it's 200 dma on March 7th 2001 and then had a Bear Market Rally. It was shorted on two different occasions at the 50 DMA, which is typical bearish price action. We then had the USD index close two consecutive days under it's 200 DMA which is also very very useful to establish that you do not have a false breakdown that gets traders out of longs and into shorts. This often happens on an intraday break below the 200 DMA and also when you have a single daily close below the 200 DMA. However, after the 2 consecutive daily closes below the 200 DMA we saw a very weak two day rally attempt and now we've seen concerted selling over the past 2 days. Major support is near 114 to 114.50. We should expect a rally once that level is reached. 114.41 was the 12-17-01 low and a Major uptrend line connecting the 1-03-01 and the 9-14-01 Lows is also rising to the 114.40 ish area. John

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