Jobs Friday

USD: Jun '25 is Down at 101.780.  

Energies: May '25 Crude is Down at 62.82.

Financials: The Jun '25 30 Year T-Bond is Higher by 70 ticks and trading at 121.20.

Indices: The Jun '25 S&P 500 emini ES contract is 476 ticks Lower and trading at 5312.00

Gold: The Jun'25 Gold contract is trading Up at 3132.80

Initial conclusion

This is not a correlated market.  The USD is Down and Crude is Down which is not normal, but the 30 Year T-Bond is trading Higher.  The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Lower and Crude is trading Lower which is not correlated. Gold is trading Higher which is correlated with the US dollar trading Down.  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. All of Asia traded Lower.  All of Europe is trading Lower as well.

Possible challenges to traders

• 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.

• Fed Chair Powell Speaks is out at 11:25 AM EST.  This is Major.

• FOMC Member Barr Speaks at 12 noon EST.  This is Major.

• FOMC Member Waller Speaks at 12:45 PM EST.  This is Major.

Traders, please note that we've changed the Bond instrument from the 10 Year (ZN) to the 2 Year (ZT).  They work exactly the same.

We've elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract.  The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments.  Remember it's likened to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the ZT veered Higher at around 8:30 AM EST with Unemployment Claims waiting for release.  The Dow moved Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Lower at 8:30 AM EST and the ZT moved Higher at around the same time.  These charts represent the newest version of Bar Charts, and I've changed the timeframe to a 15-minute chart to display better.  This represented a Long opportunity on the 2-year note, as a trader you could have netted about 30 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Jun '25 and the Dow is Jun '25 as well.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of BarCharts

ZT -Jun 2025 - 4/03/25

Dow - Mar 2025- 4/03/25

Bias

Yesterday we gave the markets a Neutral or Mixed bias.  The markets traded Lower after Trump's Declaration of War on trades and tariffs.  The Dow was Lower from the opening bell and never saw positive territory.  It closed 1,679 points Lower, and the other indices closed Lower as well.  Given that today is Jobs Friday we will maintain a Neutral or Mixed bias as is our custom on this day.

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

Commentary

So today was the first trading day of the global trade war that El Presidente started, and the markets weren't wowed.  The Dow dropped 1,679 points and the other indices lost ground as well.   Today we have Non-Farm Payrolls or as we call it, Jobs Friday.  With all the government jobs being furloughed, I don't think we'll see a positive number today, but anything is possible in a volatile market.    Want to learn Market Correlation and determine market direction hours before the Opening Bell?