Good Morning Traders,

As of this writing 4:20 AM EST, here’s what we see:

US Dollar: Up at 98.165 the US Dollar is up 115 ticks and trading at 98.165.

Energies: December Crude is up at 45.40.

Financials: The Dec 30 year bond is up 9 ticks and trading at 154.12.
Indices: The Dec S&P 500 emini ES contract is down 1 tick and trading at 2093.75.

Gold: The December gold contract is trading up at 1108.30. Gold is 41 ticks higher than its close.

Initial Conclusion

This is a not a correlated market. The dollar is up+ and crude is up+ which is not normal and the 30 year bond is trading higher. The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice-versa. The indices are down and Crude is trading up which is correlated. Gold is trading up which is not correlated with the US dollar trading up. I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down. I point this out to you to make you aware that when we don’t have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open.

Asia traded mainly mixed with half the exchanges trading higher and the other half lower. As of this writing all of Europe is trading lower with the exception of the Milan exchange which is trading higher.

Possible Challenges To Traders Today

- Average Hourly Earnings m/m is out at 8:30 AM EST. This is major.

- Non-Farm Employment Change is out at 8:30 AM EST. This is major.

- Unemployment Rate is out at 8:30 AM EST. This is major.

- Consumer Credit is out at 3 PM EST. This is major.

- FOMC Member Brainard Speaks at 4:15 PM EST. This is major.

Currencies

Yesterday the Swiss Franc made it’s move at around 8:30 AM EST after all the 8:30 news was reported. The USD hit a low at around that time and the Swiss Franc hit a high. If you look at the charts below the USD gave a signal at around 8:30 AM EST, while the Swiss Franc also gave a signal at just about the same time. Look at the charts below and you’ll see a pattern for both assets. The USD hit a low at around 8:30 AM EST and the Swiss Franc hit a high. These charts represent the latest version of Trend Following Trades and I’ve changed the timeframe to a Renko chart to display better. This represented a shorting opportunity on the Swiss Franc, as a trader you could have netted about 20 plus ticks on this trade. We added a Donchian Channel to the charts to show the signals more clearly. Remember each tick on the Swiss Franc is equal to $12.50 versus $10.00 that we usually see for currencies.

Charts Courtesy of Trend Following Trades built on a NinjaTrader platform

Pre Market Global Review

Pre Market Global Review

Bias

Yesterday we said our bias was to the upside as both the USD and Bonds were trading lower. Whereas the markets did retreat yesterday, they didn’t retreat by much. The Dow only lost 5 points and the other indices dropped fractionally as well (the S&P dropped 2 points). Given that today is Jobs Friday our bias is neutral.

Could this change? Of Course. Remember anything can happen in a volatile market.

Commentary

So we have another Non-Farm Payroll Friday or as we label it “Jobs Friday”. The Unemployment Claims came in higher than expected yesterday and this may have a bearing on the report and markets in general today. Will this serve as a bellwether to determine if the Fed will hike in December? Anything is possible in these markets. For those of you who are new to us, we always maintain a neutral bias on Jobs Friday. A neutral bias means the markets could go in any direction today. We maintain a neutral bias because historically speaking the markets have never shown any sense of normalcy today or during an FOMC meeting.

Trading performance displayed herein is hypothetical. The following Commodity Futures Trading Commission (CFTC) disclaimer should be noted.

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight.

In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.

There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

Trading in the commodities markets involves substantial risk and YOU CAN LOSE A LOT OF MONEY, and thus is not appropriate for everyone. You should carefully consider your financial condition before trading in these markets, and only risk capital should be used.

In addition, these markets are often liquid, making it difficult to execute orders at desired prices. Also, during periods of extreme volatility, trading in these markets may be halted due to so-called “circuit breakers” put in place by the CME to alleviate such volatility. In the event of a trading halt, it may be difficult or impossible to exit a losing position.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips.  Fed Chair Jerome Powell set to speak ahead of the weekly close.

EUR/USD News

GBP/USD hovers around 1.2620 in dull trading

GBP/USD hovers around 1.2620 in dull trading

GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.

GBP/USD News

Gold price sits at all-time highs above $2,230

Gold price sits at all-time highs above $2,230

Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures