Jobs Friday

USD: Sept '25 is Down at 97.900.  

Energies: Oct '25 Crude is Down at 63.08.

Financials: The Dec '25 30 Year T-Bond is Higher by 11 ticks and trading at 115.07.

Indices: The Sep '25 S&P 500 emini ES contract is 57 ticks Higher and trading at 6525.00.

Gold: The Dec'25 Gold contract is trading Up at 3607.00.

Initial conclusion

This is not a correlated market.  The USD is Down and Crude is Down which is not normal, and 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 Higher and Crude is trading Lower which is 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 Higher.  Europe is trading Higher as well.

Possible challenges to traders

• Average Hourly Earnings 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.

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 dived Lower at around 7:30 AM EST with various news items pending.  The Dow climbed Higher at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow climbed Higher at around 7:30 AM EST and the ZT dived Lower 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 Short opportunity on the 2-year note, as a trader you could have netted about 20 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 - 9/04/25

Dow - Sep 2025- 9/04/25

Bias

Yesterday we predicted an Upside Day for the markets, and they didn't disappoint as all indices traded Higher on Thursday. The Dow gained 350 points and the other indices closed Higher as well. 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

Yesterday was interesting in the respect that a senate committee had the opportunity to beat Secretary RFK to a pulp.  I have often said he isn't qualified to have this job as he has no medical background at all.  He's not even qualified to be a nurse let alone HHS Secretary.