Flow State #57

Welcome back everyone!

This week, we have a lot to discuss, as there were significant economic releases last week, with more expected in the coming days. Not only did we witness these releases, but our daily plans, along with Flow State #56, provided readers with a comprehensive breakdown of what was anticipated, yielding excellent results as the week unfolded according to my expectations. This week, we'll continue with similar analyses, focusing on the upcoming events and market structure.

To start, I'd like to offer a concise yet thorough recap of last week.

There was an insightful section sharing my perspectives on the Investment Time-Clock, detailing its significance. I strongly recommend reviewing this before proceeding to my insights for the upcoming week.

Weekly, I analyze all the events that capture the market's attention, contribute to volatility, and explain what these releases signify. While there's more I'd like to delve into, for now, I'll keep the event section brief. Soon, I plan to expand these weekly updates with more comprehensive thoughts on the events and their potential impact on the markets. Note that this will be part of the daily plans, as I aim to refine the intraday levels and analysis based on the outcomes of previous sessions. Predicting market movements a day in advance is challenging enough, so forecasting the entire week's events with high accuracy is unlikely. This is precisely why I post levels daily, allowing me to stay attuned to current market conditions and guide future expectations.

Turning to the Commitments of Traders (COT) section, we observed significant rallies in currency positions, with COT swings increasing by 21% in just over a month and a half. This percentage reflects the total gain in account value from all logged trades. A 21% gain, with each trade risking only 1%, represents a substantial movement in the account, though such results are not uncommon. The risk-reward ratio on these trades is high, and currently, the win rate is exceptionally elevated. However, it's important to remember that such performance is not typical in the long run, so it's wise to temper expectations.

In the “Momentum Gallery” section, swing stock positions have experienced significant rallies and sales, which have been beneficial more often than not. With an average profit ratio of 2:1, these trades are yielding solid returns compared to the S&P 500. The strategies and insights shared in this newsletter are consistently outperforming a simple buy-and-hold portfolio, as well as many Commodity Trading Advisor (CTA) portfolios, which are frequently lauded.

The earnings season was also noteworthy, with significant movements in stocks like ORCL, ADBE, and COST, which were covered in last week's edition of Flow State.

Finally, the value areas posted for various indices and commodities were respected, offering excellent setups throughout the week. Most of the time, the daily plans align with how the indices are positioned on a weekly timeframe value area basis. For a deeper understanding of this concept, I recommend checking out my Introduction to Volume Profile post.

Now let’s move on to the rest of my analysis for the week ahead!