This Week’s Economic Calendar
The recent strength in the dollar has been validated by both technical and fundamental analysis, including interest rate triads, COT reports, and seasonal tendencies, all of which support a buy program. This reinforces the current bias toward continued strength in the dollar in the near term, with premium upside targets expected to be delivered with speed.
Conversely, the indices remain bullish, marked by another weekly up-close candle that has created new all-time highs, particularly in the S&P and Dow. This performance has effectively re-balanced inefficiencies, targeting liquidity pools of fund-level traders. With seasonal tendencies anticipating a strong month for the indices, it serves as a reminder of our reliance on buy models during a buy program at all-time highs. We remain aligned with institutional order flow, maintaining a bullish outlook in the near term.
Looking ahead, the upcoming week features key data releases, with the core retail sales numbers and unemployment claims announcement on Thursday at 8:30 AM as the highlight. While market ranges remain open, we anticipate significant price swings. The priority continues to be effective risk management as we navigate market opportunities.
Please note that this is not financial advice.*
Monday:
Bank holiday – Low volatility, avoid trading.
Tuesday:
The AM session following a bank holiday can be tricky, often marked by consolidation profiles and high-resistance price runs into liquidity and inefficiencies. Given that it’s also the week’s first trading day and assumed a “Monday,” it’s crucial to exercise patience and manage expectations. Traders are advised to approach the day like a typical Monday—wait for the opening range, then focus on identifying the most probable higher time frame draw on liquidity during the 10 AM Silver Bullet and PM session for higher probability trades.
Wednesday:
With no significant economic news driver expected to inject volatility into the market today, we will follow the protocols outlined on Tuesday. This involves observing the opening range and identifying the most probable higher time frame draw on liquidity during the 10 AM Silver Bullet and PM session for higher probability trades if a setup presents itself.
Thursday:
Expect heightened market volatility between 8:30 AM and 11 AM due to the impact of scheduled red and medium-folder news drivers, likely providing price runs to key algorithmic reference points at this time. Optimal trading opportunities are anticipated throughout both the AM and PM sessions.
Friday:
The FOMC member’s speech at 12:10 PM is anticipated to inject volatility into the markets. We expect consolidation leading up to the speech, followed by potential volatility and erratic price swings during the address, making risk-taking during this time a low-probability endeavor. Traders should carefully manage their expectations during the AM session; however, consideration can be given to trading the PM session if a high-probability setup can be justified, especially if you haven’t met your weekly profit objectives yet. Stay patient and disciplined.
Earnings Spotlight: Major Corporate Reports Unveiling This Week – Key Insights for Investors
Earnings Reports Impact: A gentle reminder to fellow traders: anticipate significant price movements surrounding earnings reports in large-cap companies. This period often presents strategic trading opportunities, capitalizing on heightened volatility for smoother price runs.
The upcoming week will focus on earnings reports from several large-cap institutions. Key players to watch include United, Interactive Brokers, Citibank, Bank of America, Goldman Sachs, US Bancorp, Netflix, Infosys, American Express, P&G, and The Blackstone Group. Traders should anticipate heightened volatility and potential consolidation leading up to these releases.
The Cot Report For The US Dollar
The US dollar continues to deliver large bullish up-close weekly candles, with the just-closed week closing at 102.91. The expectation is for 103.95 and higher to be delivered in the near term, provided we remain bullish and are supported by institutional order flow. The focus remains on premium targets above the market price, which will remain the draw until proven otherwise.
The latest Commitment of Traders (COT) report, released on Friday, reveals fresh insights. Commercials are building unusually large hedge positions, a size not seen in over 50 weeks, signaling strong anticipation of a higher US dollar in the near term. The commercials are consistently holding more long hedge positions than shorts while reducing short equity, which suggests larger ranges are to be expected.
What does this signify for us as traders? he US dollar is exceptionally bullish, both fundamentally and technically. Recent developments in the past week also confirm a significant market liquidity injection. With the intermediate-term low for October already priced in, the US dollar remains strongly bullish as we enter the new week, with expectations of premium targets at 103.8, 104.1, and 104.64 to be repriced into in the near term.
Seasonal Tendencies
The US Dollar
Continued strength is expected for the US dollar throughout the month of October, based on analysis of previous data spanning 5, 10, and 30 years of seasonal tendencies. The alignment between fundamentals and technicals further reinforces this premise. A gentle reminder and confirmation of this are the large repricings and daily up close candle closes, signifying that the expected large ranges are here and anticipated to continue moving forward.
The US dollar is expected to continue repricing rapidly into premium targets, targeting the stops of fund-level traders, allowing smart money to offset and distribute their positions. We remain bullish!
Stay informed for sound decision-making, and always adhere to strict risk management protocols.
Until our next update, trade wisely.
Happy Trading!
Adora Trading Team
