Dollar Break Out Deflation Incoming

The dollar has finally broken out and may signify some serious deflation ahead.  I see the following happening on the following time scales:

• All week                      A significant week of selling if we pass below 1150 on the S&P

• End of Month              Selling into the beginning of October getting as low as 1040

• October/November     Recovery Rally to 1240 area.  Just under Dow 12,000 for our Dow theorists

• End of Year                Selling into 2012

• Next year to May       This is going to be one hellava rollercoaster ride.  The Bull/Bear fight will be left unresolved

• Latter half of 2012      = Fail