This Week’s Economic Calendar
In a buy program, after an expansion, we expect a retracement back into inefficiencies left open during the expansion phase of price delivery, with the draw on liquidity being below equilibrium inside a discount of the dealing range. This retracement is followed by another expansion to the upside after smart money accumulation. This is evident in the recent price action of the indices, particularly the Nasdaq and S&P, which closed the week on another bullish note.
Consolidation profile on the monthly time frames for the dollar indicate that we will always refer to the fair value of the consolidation ranges until an expansion out of the consolidation occurs. This, coupled with seasonal tendencies, accounts for the bearish price delivery seen in the charts over the previous week, accelerating towards discount targets. This creates opportunities for low-resistance, high-probability runs on the indices.
The new week brings forth important reports, with Fed Chair Powell speaking on Monday at 12 noon, taking the spotlight. This emphasizes the need for meticulous trading and tight risk management.
Please note that this is not financial advice.*
Monday:
This day presents significant red folder news drivers, following an expansion on Friday on the US dollar confirmed across all other assets. The release of the red folder news, expected by 8:30 am, is poised to inject volatility into the markets shortly thereafter. However, it’s important to note that Fed Chair Powell will be speaking by 12 noon, potentially leading to consolidations leading up to his speech. During his speech, there may be increased volatility and erratic whipsaws. Traders are advised to heavily manage their expectations and focus on the PM session instead.
Tuesday:
The release of the red folder news, expected by 8:30 am, is poised to inject volatility into the markets shortly thereafter. Identifying the most probable higher time frame draw on liquidity post-news release, or alternatively awaiting the 10 am Silver Bullet, is likely to present optimal trading opportunities.
Wednesday:
Medium folder drivers are scheduled between 8:30 am and 9:45 am, expected to inject volatility into the markets. Consequently, the day is anticipated to present optimal trading opportunities. It will be ideal for traders to focus on the 10 am Silver Bullet distribution hour and the PM session for higher probability trades.
Thursday:
The release of the red folder news, expected by 8:30 am, is poised to inject volatility into the markets shortly thereafter. Identifying the most probable higher time frame draw on liquidity post-news release, or alternatively awaiting the 10 am Silver Bullet, is likely to present optimal trading opportunities.
Friday:
With no news drivers scheduled for the day, if your weekly profit objectives have not been met, it’s advisable to redirect your focus toward identifying the most probable higher timeframe draw on liquidity post 9:30 equities opening into the 10 am Silver Bullet hour 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 revolves around earnings reports, with several large-cap institutions scheduled to release theirs. Specifically, BlackRock, Goldman Sachs, Bank of America, Domino’s Pizza, Netflix, and American Express are in focus this week. Traders should expect volatility and potential consolidation in the lead-up to these reports.
The Cot Report For The US Dollar
The just-concluded week was characterized by a swift repricing into discount targets following the interest rate triads expansion and prior displacement to the downside. This serves as a leading indicator of market health. COT reports and seasonality also confirm this data, reinforcing the technical analysis. The markets remain bearish moving forward, and further discount targets are expected to be delivered until proven otherwise.
An analysis of the Commitments of Traders (COT) report continues to show a notable shift in commercial hedging activities. Previously long positions are actively transitioning into short hedges. Data released on Friday confirms that commercial entities, including institutions and hedgers, are officially net short into July, aligning with the seasonal tendency for this month.
What does this signify for us as traders? With the fundamentals, acting as a macro roadmap, leaning bearish and supported by technical analysis, further displacement to the downside is expected. As always, technical analysis and institutional order flow are key. Our course of action is to continue trusting technical analysis and order flow on the lower time frames until proven otherwise. I am bearish on the Dollar.
Seasonal Tendencies
Seasonal tendencies refer to the recurring patterns observed in market prices or movements at certain times of the year. These patterns are based on historical data and can provide insights into the potential behavior of prices or market conditions, offering future long-term macro projections.
The US Dollar
Seasonal tendencies for the U.S. dollar indicate a rapid repricing into discount targets for the month of July at key higher timeframe institutional reference points. This was observed with the U.S. dollar closing the previous weekly candle bearish for the second week, once again validating this data. How we trade at premium levels will be monitored moving forward as we await a rejection followed by a repricing into discount targets. The data strongly communicates a bearish month for the U.S. dollar.
Stay informed for sound decision-making, and always adhere to strict risk management protocols.
Until our next update, trade wiseley
Happy Trading!
Adora Trading Team
