This Week’s Economic Calendar
$1.78 trillion was wiped off the US stock market in the first week of September, with major indices seeing no exception as prices accelerated toward discount targets into Friday’s close. With buy stops being sold by smart money at a premium on the higher timeframes, we remain aligned with institutional order flow, maintaining a bearish outlook in the near term.
While counter-trend trades can be taken on lower timeframes to reprice to intraday liquidity, the best low risk high probability setups will continue to appear when trading in line with the higher timeframe weekly and daily institutional order-flow.
Looking ahead, the upcoming week brings key data releases, with Wednesday’s CPI report at 8:30 AM being the highlight. Although market ranges remain open and significant swings are expected, the focus should always remain on managing risk effectively as we move forward.
Please note that this is not financial advice.*
Monday:
Today brings no major news drivers after Friday’s significant expansion of the indices into their discount targets. Being Monday and the first trading session post-NFP (a large range day), it’s important to exercise patience and manage expectations. I recommend waiting for the 9:30 AM equities open, then focus on identifying the most probable higher timeframe draw on liquidity, particularly during the 10 AM silver bullet.
Tuesday:
With no significant news drivers expected to inject volatility into the market today,in addition to being ahead of tomorrow’s CPI release, this session is likely to present high-resistance runs and lower probability setups. Liquidity is building in anticipation CPI, if traders choose to engage on this day, they should be mindful that it’s a lower probability trading day. Only experienced traders should consider participation, applying proper risk management to navigate the market professionally.
Wednesday:
This day brings the anticipation of CPI numbers, 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 10 AM Silver Bullet distribution hour and the PM session for higher probability trade setups.
Thursday:
Volatility injections are anticipated during both the AM session at 8:30 AM and the PM session at 1 PM, driven by multiple red and medium-impact news events.This will likely provide price runs to key algorithmic reference points, offering optimal trading opportunities. Traders are encouraged to identify the most probable higher time frame draw on liquidity post-news release or, alternatively, wait for the 10 AM Silver Bullet for low-risk, high probability setups.
Friday:
Medium-impact news drivers are scheduled for 10 AM, coinciding with the Silver Bullet distribution hour. If you haven’t met your weekly profit objectives, shift your focus to identifying the most probable higher time frame draw on liquidity during this 10 AM window or in the PM session, should a suitable setup present itself.
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 will be dominated by earnings reports from major large-cap institutions, including Oracle, Adobe, Kroger, and RH. Traders should brace for heightened volatility and possible consolidation leading up to these announcements.
The Cot Report For The US Dollar
The US dollar, as expected, repriced into premium targets within the range after delivering into key levels. This retracement provided smart money an opportunity to accumulate new positions inside a premium, setting the stage for the next leg of price delivery. The market closed heavy, with the dollar ending the week at 101.18, marking a bearish weekly candle.
Analyzing the latest COT report, shows that the commercials continue to hold more short positions than longs, reflecting their expectations of further downside for the dollar in the near future. Friday’s data confirmed this sentiment, with no significant shifts in positioning observed. The discrepancy noted in previous weeks has now been corrected, with both technicals and fundamentals aligning once again, reinforcing the prevailing bearish outlook as the week closes with clear signs of weakness.
What does this signify for us as traders? The commercials remain relatively bearish on the US dollar, holding this stance for over six weeks. This bearish sentiment is supported by short-term macro indicators, such as the 5- and 10-year interest rates, which continue to accelerate to the downside confirming weakness. After another bearish close, where the dollar rejected premium targets, I remain firmly bearish heading into the new week, anticipating a repricing into discount targets unless proven otherwise by a confirmed break in structure.
Seasonal Tendencies
The US Dollar
Once again, with the closing week, we’ve seen the continual engineering of liquidity by smart money and market makers, capitalizing on the fear, excitement, and uncertainty of uninformed traders. This dynamic is expected to persist as the market runs on a time-based algorithm, with precision that consistently delivers on targets.
The US dollar’s seasonal tendencies for September forecast a decline in the earlier weeks, followed by a strong recovery to close out the month. With the alignment between technicals and fundamentals, as discussed in the newsletter, this sets the stage for a longer-term repricing into discount targets, particularly as we continue to break out of the 99-107 consolidation range that has held for over 52 weeks.
Once confirmed by the technicals in the new week, expect an accelerated price delivery with a one-sided, volatile repricing expected. LARGE RANGES ARE COMING!
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
