There's carnage out there...as I talk with many of my peers and contacts...if you are having a rough go these last few weeks, you're not alone. I think what many traders must learn to do is recognize when the charts don't look quite "right". What are some clues?

Watch for correlation with the U.S. Dollar on the majors. Just yesterday morning the U.S. Dollar Index and the USD/CHF were moving in opposite directions.

The Yen ofcourse, but even now as it makes a soft double bottom just above 115.00 there were signs as prices broke one psychological level after another. Ignore these "00" breaks and the market knows it's caught your off guard.

The question on everyone's lips is "where is the bottom?" Well this small bounce up through 116.00 and above the Wave is a start. The (60 minute) USD/JPY has not been above the Wave since the original breakdown on February 23rd.

The volatility of these past weeks has left many charts completely disregarding the consolidation or congestion phases of the market cycle. During the "short cycles" we've been enduring, trends reverse so quickly that a sideways Wave never has time to develop. Taking a look at the 30 minute Dollar you can see that the sideways, three o'clock Wave has returned. This is our second chance.

A few charts I am keeping an eye on for set ups are the EUR/GBP -- for those traders who like trading cross-rates and the EUR/USD. Both have sideways congestion/consolidation Waves with triangle pattern set ups.