During the most recent recession in 2008 by looking at the DOW vs the DXY on the monthly TF. The first red circle on each chart marks the top on the DXY in December 2005. The 92 level on the DXY was confirmed as resistance at this point in time. (For context, the DXY is below this 92 level right now and so far… it’s being rejected)
We can see that in this month, the DOW began a parabolic move that would lead to a new ATH following the dotcom bubble in 2000. As it entered it’s parabolic advance, the DXY entered a bear market. From 12/1/2005 (red) to 10/1/2007 (yellow) they remained inversely correlated for the majority of that run. In the months following, 11/2007 - 3/2008, they broke the inverse trend and became directly correlated: DXY kept dumping and so did the DOW. Then in May of 2008 (blue on both charts), they began becoming inversely correlated again. However this time, the DXY was bullish and the DOW was bearish in that inverse relationship (they flip flopped). When this happened, it marked the bottom on the DXY (71 level) and the complacency shoulder on the DOW. The trend flipped back to being inversely correlated until March 2009 when the DXY topped and the DOW bottomed (purple).
We can see that in this month, the DOW began a parabolic move that would lead to a new ATH following the dotcom bubble in 2000. As it entered it’s parabolic advance, the DXY entered a bear market. From 12/1/2005 (red) to 10/1/2007 (yellow) they remained inversely correlated for the majority of that run. In the months following, 11/2007 - 3/2008, they broke the inverse trend and became directly correlated: DXY kept dumping and so did the DOW. Then in May of 2008 (blue on both charts), they began becoming inversely correlated again. However this time, the DXY was bullish and the DOW was bearish in that inverse relationship (they flip flopped). When this happened, it marked the bottom on the DXY (71 level) and the complacency shoulder on the DOW. The trend flipped back to being inversely correlated until March 2009 when the DXY topped and the DOW bottomed (purple).