Dollar index day trading strategy

Dollar index moving higher this morning mostly on the bearish
comments out of the ECB overnight along with the concerns from the news from Germany
and the Spain on this Friday morning.  A bullish
dollar index will result in falling prices on Crude Oil, E-Mini-Russell, euro
and gold futures.  If the dollar index keeps
rising higher we have plenty of room to move higher so there will be plenty of
room for the markets we trade to move lower. 

Remember the dollar index may start trading sideways this
morning, and we will use the faster 21-range chart to pick up sideways market
personality and when that occurs on the dollar index on a Friday morning we
need to beware this day is going to be challenging.  Narrow ranges on the dollar index are common
in low volume Fridays and that will keep other markets from moving well.

Our plan for the dollar index this morning is to
use the previous price wedge as our biggest clue today.  We can see the dollar index has made new higher-highs
outside of the price wedge resistance, which tells us 1 of 3 things is likely
to occur today.  First, the price will
most likely stall and reverse if the buyers aren’t strong enough.  Second, the news out of Europe may be enough
to keep the sellers at bay and allow the buyers to keep pushing higher.  And third, there may not be enough conviction
and the dollar index may trade sideways just able the PHOD and the price wedge highs.  So price may reverse and drop, price may keep
rising up to the next resistance at 83.00 or the price may slow down and go
sideways.  We need to be ready for all
three of these scenarios today.