Day trading strategy for dollar index correlation

First, we know the heat map on
the dollar index this morning is trading at 0.0% ahead of the major news at
830am EST so we’re staying patient and waiting for the market personality on
the dollar index to improve this morning.

We open our 55-range chart of the
DOLLAR INDEX 06-12 and we can see the major bear price channel, the short term price
wedge, the double-top with support below us, and the bullish AB=CD Pattern as support.  This info will be important later in the
process now that we know the major levels of support and resistance on the dollar
index.

The key to using this information
is that we now know we’re at the lows on the dollar index price wedge, and with
the additional support from the double-top we can assume three things will
occur today.  First, the dollar index may
go through the lows, making new lower-lows and breaking through support.  If the dollar index goes lower, we are going
to buy pullbacks with new higher-highs on the markets we trade.  Second, the dollar index may trade flat and sideways
on top of the support.  If the dollar
index flattens out, stops moving higher or lower, the heat map at 0.0% we then
need to sit on hands and wait for the market to move.  Third, the dollar index may bounce and rise
off this support and this is when we look to sell retracements with new lower-lows
on the markets we trade.