The employment report wasn't great, but it certainly wasn't horrible either. Investors took it as a signal to move money back into stocks...and this pulled the carpet from underneath the Treasury market.

The unemployment rate remained steady at 9.7% (sadly this is seen as a good thing) but the U.S. economy is said to have lost 36,000 jobs last month. This isn't an improvement over last month's numbers, nor did it even match ADP's estimates...but it wasn't the negative 100,000 that some of the larger banks and analysts were whispering.

In Wednesday's newsletter, we were calling for a rally in the June bond futures to the mid 118's but it seems as though 118'02 was all that the market had in it. We had a feeling that the market was toppy, but overestimated the size of the short squeeze in the long bond. On the other hand, our mid to high 117's objective in the notes seemed to hold true. The market is now at a major crossroads and these leaves us uncomfortable trying to make any bold predictions. Instead, we prefer to wait to see what Monday brings.

In the meantime, we see support at 116'16 in the 30-year bond and again at 114'20 should stocks continue to climb higher (which we aren't counting on). Note traders should look for support at 116'25 and then again at 115'21.

Have a great weekend!




* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.

**Seasonality is already be factored into current prices, any references to such does not indicate future market action.

Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.

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Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

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