This Week’s Economic Calendar
Over $787 billion was wiped off the US stock market last week in a clean, one-sided repricing into discount targets on Monday. This allowed smart money to accumulate long positions by buying into retail sell stops before rapidly repricing into premium targets to closeout the week.
Given recent global developments—especially with the US and other countries bracing for a rough trade war amid shifting power blocs—the importance of risk management and capital preservation is more critical than ever. The high-resistance delivery on lower time frames last week underscores this: if risk isn’t properly managed, equities can be run down very quickly, leaving you sidelined.
Looking Ahead:
This week is set to be data-heavy, with key numbers scheduled for 8:30 AM on Friday. Expect heightened volatility all week long. Focus on high-probability setups that align with a higher time frame draw on liquidity at time of day, while managing risk effectively.
Please note that this is not financial advice.
Monday:
Given that it’s the first day of NFP week, combined with the first trading week of the month and a Monday, patience and managed expectations are key. A medium and high impact news driver scheduled at 9:45 and 10:00 AM respectively is expected to inject volatility, providing price runs to algorithmic reference points at this time. The recommendation is to observe the opening range and then focus on identifying the most probable higher time-frame draw on liquidity during the 10:00 AM silver bullet.
Tuesday:
Expect heightened volatility in the AM session due to the high impact news drivers scheduled for 10 AM, coinciding with the silver bullet hour. This marks the second most probable trading day pre-NFP. Both the AM and PM sessions should offer low-risk, high-probability opportunities.
Wednesday:
Volatility injections are anticipated in the AM session between 8:15 and 10:30 AM, coinciding with the Silver Bullet distribution hour, facilitated by multiple red and medium folder news drivers expected to inject volatility. This will likely provide price runs to algorithmic reference points, presenting optimal trading opportunities. Traders are advised to focus on the 10 AM Silver Bullet and conclude their trading day by 12 noon to protect capital in lower probability high resistance price delivery in anticipation of the NFP numbers on Friday.
Thursday:
Highlighted as the day before the Non-Farm Payrolls (NFP) report, where we can expect price to deliver within the context of high resistance and low probability trading conditions. Traders are advised to exercise caution and recognize that it’s a lower probability trading day, particularly if they lack 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 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 PayPal, Spotify, Pfizer, PepsiCo, Ferrari, AMD, Alphabet, Chipotle, Uber, Walt Disney, Ford, Cloudflare, Amazon, and Toyota are all on the schedule. These key institutions are expected to drive heightened market volatility, with potential consolidation likely in the lead-up to their releases.
The Cot Report For The US Dollar
The Previous Week in Review
After an expansion, we expect a retracement into logical levels—allowing smart money to capitalize on fund-level stops in a discount, buying into retail sell-stops before expanding out of the range to distribute into premium targets above market price. This was seen on the US dollar last week, with an expansion out of the discount of the dealing range following a retracement that closed the weekly candle bullish.
We remain in a buy program until further notice, expecting higher prices until a break in market structure to the downside proves otherwise.
On the other side, the commitment from traders—particularly the commercials whose footprints we track for informed decision-making—continues to load fresh short hedges, anticipating a lower US dollar in the near to long term. Meanwhile, the technicals remain heavily bullish, creating a disconnect that serves as an early sign of smart money accumulation, which we must monitor moving forward.
What does this signify for us as traders?
Despite commercial activity and positioning hinting at near-term lower prices, the US dollar’s ongoing strength creates a divergence between fundamental data and technical analysis. This discrepancy a suggests potential smart money accumulation. The US dollar remains strongly bullish until proven otherwise, but attention should be given to premium targets. The creation of new highs could price in a smart money reversal, in-line with the commercial positioning and data.
Seasonal Tendencies
The US Dollar
Based on seasonal data, February is shaping up to be a very bullish month for the US dollar—serving as the inception of a quarterly price run into premium targets, provided institutional order flow confirms this narrative.
Additionally, an intermediate-term low is expected to be priced in early in the month, specifically during the first week of February, as the market prepares to rally.
If confirmed by institutional order flow, this setup can pave the way for a massive price run that offers opportunities for both intraday trades and swing trading, depending on your trading style and experience level.
The discount of the dealing range we monitored last week is currently in play; if it holds in the, we can expect a rapid, one-sided repricing into premium targets as the new week unfolds.
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
