Jobs Friday

USD: Sept '25 is Up at 99.965.  

Energies: Aug '25 Crude is Down at 69.06.

Financials: The Sep '25 30 Year T-Bond is Lower by 22 ticks and trading at 113.16.

Indices: The Sep '25 S&P 500 emini ES contract is 251 ticks Lower and trading at 6311.50.

Gold: The Aug'25 Gold contract is trading Down at 3345.10.

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Down which is normal, but the 30 Year T-Bond is trading Lower.  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 Lower which is 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. All of Asia traded Lower.  Currently all 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.
• Final Manufacturing PMI is out at 9:45 AM EST. This is Major.
• ISM Manufacturing PMI is out at 10 AM EST. This is Major.
• ISM Manufacturing Prices is out at 10 AM EST. This is Major.
• Revised UOM Inflation Expectations is out at 10 AM EST. This is not Major.
• Revised UOM Consumer Sentiment is out at 10 AM EST. This is not Major.
• Construction Spending is out at 10 AM EST. This is Major.
• Wards Total Vehicles Sales is out All Day by Brand. 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 climbed Higher at around 8:30 AM EST with Unemployment Claims pending.  The Dow dived Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow dived Lower at 8:30 AM EST and the ZT climbed 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 a dozen plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Sep '25 and the Dow is now Sep '25.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts Courtesy of BarCharts

ZT -Sep 25 - 7/31/25

Dow - Sep 2025- 7/31/25

Bias

Yesterday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint as the Dow closed Lower by 244 points, the S&P by 14 but the Nasdaq gained 10 on the session.  All-in-all a Mixed or Neutral day.  Given that today is Jobs Friday, our bias is Neutral or Mixed.

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

Commentary

Despite all the hoopla regarding interest rates or the lack of cuts thereof the markets still traded Neutral or Mixed for the day and this was the 6th day in a row for a neutral market.  Clearly folks aren't satisfied with what's going on and I hope that will change.