This Week’s Economic Calendar
It’s my pleasure to welcome you to the month of December and the much-anticipated holiday season. While this is an exciting time, the same ripple effects we feel as humans are also reflected across the markets. December often comes with reduced liquidity and volume, as deep-pocketed and fund-level traders are less inclined to take on new positions or risk. This typically results in consolidation ranges and high-resistance trading, as historical data suggests. However, given the global events witnessed this year—escalating tensions among global powers and mounting threats of conflict—markets have experienced rapid repricing and volatile swings around news releases. This may lead to a different price delivery compared to previous years.
Looking Ahead:
The upcoming week is data-heavy, with the Fed Chair speaking on Wednesday at 1:45 PM and NFP numbers being released on Friday at 8:30 AM key highlights. These events are likely to inject significant volatility.while significant price swings are expected, traders must remain meticulous. Tight risk management will be essential for navigating these evolving market effectively.
Please note that this is not financial advice.*
Monday:
Given that it’s the first day of NFP (Non-Farm Payrolls) week, combined with the first trading week of the month and a Monday, it’s crucial to exercise patience and manage expectations. Medium and red-folder news drivers are scheduled for 9:45 and 10:00 AM, respectively, and are expected to inject volatility into the marketplace today. I recommend observing the 9:30 AM equities open and then focusing on identifying the most probable higher-timeframe draw on liquidity during the 10:00 AM Silver Bullet, positioning yourself for optimal trading opportunities.
Tuesday:
Expect heightened volatility in the AM session, given the key high-impact news driver scheduled for 10:00 AM, coinciding with the Silver Bullet hour. This marks the second most probable trading day pre-NFP. Both the AM and PM sessions are expected to present low-risk, high-probability opportunities.
Wednesday:
Volatility injections are anticipated in the AM session between 8:15 and 10:30 AM, supported by multiple red and medium folder news drivers. However, with Fed Chair Powell’s speech scheduled later in the day, consolidation is likely leading up to this event, followed by potential periods of heightened volatility and whipsaws during his speech. Traders, especially those who are not experienced, are strongly advised to manage their expectations. Focus is recommended on the 7–8 AM Silver Bullet setup or, for those-experienced of handling the increased volatility, a setup in the last hour of trading.
Thursday:
Heightened market volatility is anticipated at 8:30 AM, driven by a high-impact news release during the AM session. As the day precedes the Non-Farm Payrolls (NFP) report, price is expected to deliver within the context of high-resistance, low-probability trading. Traders should approach the market with caution, acknowledging it as a lower-probability day—particularly for those with limited experience.
Friday:
Marked by the anticipation of the Non-Farm Payrolls (NFP) numbers, there is an expectation of heightened volatility in the markets following the release of this high-impact news, potentially offering optimal trading opportunities. However, it’s important to note that trading ahead of such high-impact news is not recommended due to increased uncertainty and risk. Instead, traders are advised to wait and observe the liquidity and inefficiencies that unfold after the news release. For higher probability setups, consideration can be given to trading during the 10-11 AM Silver Bullet window and the PM session.
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 trades.
The upcoming week centers on earnings reports from major large-cap institutions, including Scotiabank, Salesforce, Marvell, Dollar Tree, RBC, Dollar General, DocuSign, Kroger, ID Bank, and Signet.These key players are expected to drive heightened market volatility, with potential consolidation likely, leading up to their report releases.
The Cot Report For The US Dollar
Update will be provided on Monday, since the COT report was not published last Friday as we were observing a bank holiday the previous day.
Seasonal Tendencies
The US Dollar
The month of December is generally quiet, as revealed by seasonal data from previous years, often characterized by tight ranges and sideways price delivery. Historical seasonal tendencies for December anticipate an intermediate-term high early in the month, followed by a significant price run into a discount and then consolidation for the remainder of the month.
While seasonal tendencies point to a weaker dollar throughout December, confirmation through institutional order flow is crucial to validate this outlook. Until proven otherwise, the current bias—supported by institutional order flow—remains intact. Close attention should be paid to how price trades at the current discount FVG on the weekly chart into the new week, as outlined in last week’s newsletter. New premium highs created could provide opportunities for smart money to accumulate short positions in a premium for a potential reversal, provided this aligns-with institutional order-flow and is confirmed by a break of structure moving forward.
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
