This Week’s Economic Calendar
The just-concluded week was marked by an expansion to new all-time highs on the indexes, particularly the S&P and Dow, both closing bullish for yet another consecutive week. Focus remains emphasized on buy models at all-time highs until a significant break in structure is observed.
The discrepancy between the fundamentals and technicals of the U.S. dollar remains closely monitored going into the new week, which may hint at smart money accumulation at the macro level. With the U.S. dollar closing in succession another bearish weekly candle, institutional order flow continues to remain bearish, with expectations that discount targets will be repriced into moving forward until we see bullishness in the technicals.
Looking ahead, the upcoming week features key data releases, with the Non-Farm Payroll (NFP) numbers announcement on Friday as the highlight. While market ranges remain open, we anticipate significant price swings. The priority continues to be effective risk management as we navigate market opportunities moving forward.
Please note that this is not financial advice.*
Monday:
Given that it’s the first day of the NFP (Non-Farm Payrolls) week, combined with the start of a new month and a Monday, it’s crucial to exercise patience and manage expectations. The medium-impact news driver at 9:45 AM is expected to inject volatility, providing price runs to algorithmic reference points at this time. However, the PM session should be avoided entirely. The recommendation is to wait for 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:
Medium and red folder news drivers are scheduled for 9:45 AM and 10 AM, respectively, coinciding with the Silver Bullet hour. This is expected to inject volatility into the markets, presenting optimal trading opportunities. Traders are advised to concentrate on the 10 AM Silver Bullet and the PM session for higher-probability trades.
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 a red and medium folder news driver 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:
Expect heightened market volatility between 8:30 AM and 10:30 AM due to the impact of Red and medium-folder news drivers expected to flood the market throughout the AM session. Highlighted as the day before the Non-Farm Payrolls (NFP) report, 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 will focus on earnings reports, with several large-cap institutions set to release theirs. Paychex, Nike, LEVIS, RPM, and Conagra Brands Inc. are key players to watchout for.Traders should anticipate heightened volatility and potential consolidation in the lead-up to these report releases.
The Cot Report For The US Dollar
The US Dollar once again closed heavily at 100.417, delivering into key targets below 100 with speed, as anticipated during the past week. This marks yet another bearish weekly close in a series of successive down-close candles over recent months, as previously called out. The USD continues to remain heavy, supported by bearish institutional order flow in a sell program until proven otherwise.
The latest Commitments of Traders (COT) report reveals a notable shift in commercial hedging activities. Previously dominant short positions are actively transitioning into long hedges. Friday’s data confirms that commercial entities, including institutions and hedgers, continued accumulating long positions as we transition into October. This discrepancy between technicals and commercial positioning indicates early signs of smart money accumulation, which should be closely monitored moving forward.
What does this signify for us as traders? The commercials, whose activities we closely monitor, continue to hedge long with a combined buildup of new long positions. This shift, confirmed by increased open interest, suggests they anticipate a bullish U.S. dollar in the near term. While this remains a valuable insight for long-term macro analysis, discount targets can still be anticipated before a reversal occurs. Without calling a bottom, technicals remain key, and with the prevailing institutional order flow still in place, the U.S. dollar remains bearish until price action confirms otherwise through a clear break of structure.
Seasonal Tendencies
The US Dollar
As we roll out of September and usher in October, a bullish month for the U.S. dollar is expected, as confirmed by seasonal data. Although the month is projected to be bullish overall, a steep decline in the early weeks is anticipated, repricing into a discount before a sharp recovery forms an intermediate-term low, closing the month higher. Fundamental indicators such as the COT report, seasonal tendencies, and interest rates seem to already support this premise. However, this outlook must be validated by a change in the state of delivery on the higher timeframes to confirm the data. The prevailing institutional order flow and higher timeframe bias remain intact.
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
