Good jobs numbers mean good market

USD: Sept '25 is Up at 97.040.  

Energies: Aug '25 Crude is Down at 66.96.

Financials: The Sep '25 30 Year T-Bond is Lower by 12 ticks and trading at 113.28.

Indices: The Jun '25 S&P 500 emini ES contract is 76 ticks Lower and trading at 6305.25.

Gold: The Aug'25 Gold contract is trading Down at 3311.40.

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 Down 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. Asia traded Mixed.  All of Europe is trading Lower.

Possible challenges to traders

• No Major economic news to speak of.
• Lack of Major economic news.

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 leaped Higher at around 8:30 AM EST with Non-Farm Payrolls.  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 30 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 - 7/03/25

Dow - Sep 2025- 7/03/25

Bias

Last Thursday we gave the markets a Mixed or Neutral bias as it was Non-Farm Payrolls due to the Fourth of July holiday.  The Dow soared 344 points Higher and the other indices closed Higher as well.  Today our bias is Mixed.

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

Commentary

Well, the Jobs number came out last Thursday and it appears that the US economy created 147,000 net new jobs whereas earlier in the week ADP suggested a net loss of jobs.  Don't look for the Federal Reserve to lower rates anytime soon as this was a good report.