This Week’s Economic Calendar
The past week saw the indices expand into new all-time highs, breaking out of the prolonged consolidation profile and range bound price delivery that lasted for several days. Smart money accumulated sell stops at a discount, subsequently repricing into premium targets doubling as fund-level stops, completing a textbook market maker buy model.
At all-time highs, the focus remains on buy models, as we remain aligned with institutional order flow, maintaining a bullish outlook in the near term. While counter-trend trades can be taken on lower time-frames to reprice to intraday liquidity, the best low-risk, high-probability setups will continue to appear when trading in line with the higher time-frame weekly and daily institutional order flow.
Looking Ahead:
The upcoming week is data-heavy, with CPI numbers scheduled for release on Wednesday at 8:30 AM being a key highlight. These events are expected to inject significant volatility into the markets. Traders should prepare for notable price swings during these news releases and look to capitalize on opportunities that form after their release.
Please note that this is not financial advice.
Monday:
Given that today is the first trading day following a large range week on the indices, patience and managed expectations are key. No major economic news driver is expected to inject volatility today, so one could look for opportunities in the premarket if the market structure suggests it is high probability. I recommend observing the 9:30 AM equities open and then focusing on identifying the most probable higher-time frame draw on liquidity during the Opening Range (9:30-10:00 AM) and 10:00 AM Silver Bullet capitalizing on the volatility near the 9:30 opening bell.
Tuesday:
With no significant economic news driver and it being the day ahead of CPI expectations are being managed accordingly. Focusing in the premarket session for low risk setups and observing the opening range is ideal on a day we expect the AM to be more difficult. If trading the AM Session identify the most probable higher time frame draw on liquidity during the 10 AM Silver Bullet for higher probability trades if a setup presents itself. The PM session is-however best avoided to protect capital in lower probability high resistance price delivery in anticipation of the CPI numbers on Wednesday.
Wednesday:
This day brings the anticipation of the CPI numbers at 8:30 am, which is expected to inject significant volatility into the market following the news release. While we typically avoid trading ahead of high-impact news driver, the post-news release reveals liquidity and inefficiencies that can be capitalized on as a draw. Focus on the AM Session beginning at 9:30 and the PM session for higher probability trade setups.
Thursday:
Expect heightened volatility in the AM session due to multiple key high impact news drivers scheduled at 8:30 am. Focus on identifying the most probable higher time-frame draw on liquidity post-news release or, alternatively, wait for the 10 AM Silver Bullet window to frame low risk, high probability setups.
Friday:
Today presents no significant news drivers expected to inject volatility into the markets. If you haven’t met your weekly profit objectives, focus on the premarket trading hours or allow the opening range (9:30-10:00 AM) to develop, then focus on identifying the most probable higher time frame draw on liquidity during the 10 AM Silver Bullet or the PM session, should a suitable setup present itself.
Earnings Spotlight: Major Corporate Reports Unveiling This Week – Key Insights for Investors
Earnings Reports Impact: As a reminder to 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 will be centered around earnings reports, with several large-cap institutions scheduled to release theirs. Key players to watch include C3.ai, Oracle, Casey’s General Stores, Ferguson, Adobe, Nordson, Broadcom, and Costco. Traders should anticipate heightened volatility and potential consolidation in the lead-up to these report releases.
The Cot Report For The US Dollar
We are beginning to observe weakness in the US Dollar after premium targets were met several weeks ago. Last week, the discount FVG (Fair Value Gap) we highlighted was traded into. Additionally, interest rate triads are beginning to displace lower, serving as a leading indicator for the US Dollar’s weakness if confirmed by the technicals in the upcoming week.
The recently released Commitment of Traders (COT) report reveals that commercials are holding more long hedges than short hedges, indicating their interest in higher prices in the longer term. However, this creates a discrepancy between the technical and fundamental outlooks, suggesting potential smart money accumulation that warrants close attention moving forward.
What does this signify for us as traders? Commercials, as reflected in the COT report, remain net long, while institutional order flow on the technical charts—supported by interest rate triads and bonds—suggests otherwise. This divergence highlights a smart money accumulation that requires close attention. Rather than attempting to call a top, emphasis remains placed on monitoring how we trade in a discount of the daily range moving forward. Until the alignment between fundamentals and technicals reestablishes, our focus will remain on institutional order flow top-down and price action for actionable insights.
Seasonal Tendencies
The US Dollar
Seasonal tendencies for December communicates an expectation of a intermediate-term high being priced in early in the month, followed by a protraction lower into discount targets and a consolidation profile for the remainder of the year. This has played out thus far, as evidenced by the weakness observed over the past two weeks, with the repricing into discount targets.
While we observe how we trade at a discount on the daily chart and inside the weekly FVG, this is a pivotal point to await more information that confirms a decisive rotation lower. This confirmation is expected through:
-A breakdown validated by a break in structure within institutional order-flow on the technicals.
-Alignment between the fundamentals and technicals from a macroeconomic perspective.
Until then, institutional order flow remains the guiding principle for decision-making, providing clarity in the absence of technical-fundermental correlation.
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
