Job numbers "propel" markets?

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Up at 101.945.

Energies: Nov '26 Crude is Down at 90.76.

Financials: The Dec '26 30 Year T-Bond is unchanged and trading at 102.24.

Indices: The Sep '26 S&P 500 emini ES contract is 56 ticks Lower and trading at 7763.25.

Gold: The Dec'26 Gold contract is trading Up at 4186.70.

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 unchanged. 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 Up which is not 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 goes Up the other goes Down. Asia traded Mixed. All of Europe is trading Mixed as well.

Possible challenges to traders

Final Services PMI is out at 9:45 AM EST. Major.
ISM Services PMI is out at 10 AM EST. Major.
Lack of Major Economic news.

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.

On Friday the two year dived Lower at around 8:30 AM EST after the job numbers were released. The Dow climbed Higher at around the same time. Look at the charts below and you'll see a pattern for both assets. The ZT dived Lower at around 8:30 AM EST and the Dow climbed Higher 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 the ZT is now Dec '26. I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of Barcharts

Bias

Given that Friday was Jobs Friday our bias was Mixed or Neutral. Today we aren't dealing with a correlated market, and our bias is to the Downside.

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

Commentary

Today we view the Labor market to see if the economy is everything the folks in DC say it is.

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

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