Morning update (Dollar Index, Crude, Silver, Loonie, Russell 2000)

Many breakouts have reversed in the overnight. This makes you wonder what kind of breaking news is going to be coming out, and who knows what? I know it is best for me to pay attention to the auction first and foremost, and then trade with a disciplined, consistent, and objective approach. I do not worry about anything that is out of my control. Worry about what you will do, not what the market is going to do.

Let's take a peek at the charts I have been posting lately...

Silver broke down from the flag that formed into the close yesterday after breaking out of the triangle. This takes all bullish bets off the table for me. The wise bet is to wait for the daily chart to decide which way it wants to go.

Silver is back at the neckline of the H&S.

(Click on charts to expand)

Russell 2000 had a failure to stick the landing on the breakout or "Initiative move" from the balance area on the daily chart. This sets up the "Responsive Trade" to target the opposite end of the balance area for those types of traders. The recent low below the triangle becomes a target for the bears. I have highlighted the "Measured Rule" of the "Ascending Triangle" on the 30 minute chart, along with an X that would have marked a logical place for a stop loss. The recent high yesterday of the Russell becomes the extreme of the balance area and is now a key reference area.

Canadian Dollar had a throwback to the breakout point and after a brief bounce had a breakdown back inside the triangle. I will be staying clear of Canadian Dollars for the time being.

My sentiments on Corn and Natural Gas are the same as in last night's post which can be found here:

http://scottpluschau.blogspot.com/2012/03/patterns-of-day.html

I found it odd that Crude ran out of gas yesterday. Now we are below the breakout point on the 30 minute chart, but the structure of the daily chart is still bullish in my opinion. I am on the sidelines in crude until a new pattern develops.

Lastly the Dollar Index has had a pullback to the 80 level after breaking down major support. The big battle in futures is right here.

Today may be a day that I am an observer. I do not force trades. Either I have my ducks lined up in a row, or I sit in cash. That's what it comes down to. If you have an itch to trade, then you may need to work on yourself and not the charts. When I have had marginal setups, or take trades "I think are good", I'm in trouble.

ScottPluschau