Job numbers torpedo markets

USD: Sept '25 is Down at 98.505.  

Energies: Aug '25 Crude is Down at 66.09.

Financials: The Sep '25 30 Year T-Bond is Lower by 10 ticks and trading at 115.12.

Indices: The Sep '25 S&P 500 emini ES contract is 132 ticks Higher and trading at 6297.50.

Gold: The Aug'25 Gold contract is trading Up at 3420.60.

Initial conclusion

This is a nearly correlated market. The USD is Down and Crude is Up which is normal, and 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 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. Asia traded Higher with the exception of the Nikkei exchange.  Currently all Europe is trading Higher.

Possible challenges to traders

• Factory Orders m/m are out at 10 AM EST. This is Major.
• Loan Officer Survey is tentative. 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.

On Friday the ZT climbed Higher at around 8:30 AM EST with the Job Numbers 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 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 - 8/01/25

Dow - Sep 2025- 8/01/25

Bias

On Friday we gave the markets a Neutral or Mixed bias as it was Jobs Friday and we always maintain a Neutral bias on that day. The markets veered to the Downside with the Dow dropping 542 points and the other indices losing ground as well. Today we are dealing with a nearly correlated market, and our bias is to the Upside.

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

Commentary

So, the US economy only created 73,000 new jobs versus 106,000 expected. The number was so bad that Trump fired the commissioner in charge of reporting that data. This smacks of Il Duce mentality. Don't like the number? Kill the messenger.