Job numbers don't help

USD: Jun '25 is Down at 102.645  

Energies: May '25 Crude is Down at 59.59.

Financials: The Jun '25 30 Year T-Bond is Higher by 1 tick and trading at 120.20.

Indices: The Jun '25 S&P 500 emini ES contract is 588 ticks Lower and trading at 4969.00

Gold: The Jun'25 Gold contract is trading Up at 3046.80

Initial conclusion

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

Possible challenges to traders

• FOMC Member Kugler Speaks at 10:30 AM EST.  This is Major.

• Consumer Credit is out at 3 PM 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.

On Friday the ZT dived Lower at around 8:30 AM EST with Non-Farm Payrolls waiting for release.  The Dow moved Higher at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Higher at 8:30 AM EST and the ZT moved 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 30 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Jun '25 and the Dow is Jun '25 as well.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of BarCharts

ZT -Jun 2025 - 4/04/25

Dow - Mar 2025- 4/04/25

Bias

On Friday we gave the markets a Neutral or Mixed bias.  The markets traded Lower after Trump doubled downs on tariffs.  The Dow was Lower from the opening bell and never saw positive territory.  It closed 2,232 points Lower, and the other indices closed Lower as well.  Given all the dialogue regarding the Tariffs, our bias is to the Downside.

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

Commentary

So Friday we received a bit of a surprise in that the Job numbers came in better than expected.  The US economy created 228,000 jobs versus the 137,000 expected.  At the end of the day it didn't matter as the Dow closed over 2,200 points Lower and the other indices collapsed.    Want to learn Market Correlation and determine market direction hours before the Opening Bell?