Jobs Friday

USD: Mar '25 is Up at 109.025.

Energies: Feb '25 Crude is Up at 75.82.

Financials: The Mar '25 30 Year T-Bond is Down 7 ticks and trading at 111.29.

Indices: The Mar '25 S&P 500 emini ES contract is 49 ticks Lower and trading at 5947.00.

Gold: The Feb'25 Gold contract is trading Up at 2707.90.

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Up which is not 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 Lower and Crude is trading Higher which is 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. All of Asia traded Lower.  Europe is trading Mixed with half the exchanges Higher and the other half Lower. 

Possible challenges to traders

From Thursday January 9, 2025

• Challenger Job Cuts is out at 7:30 AM EST.  This is Major.

• FOMC Member Harker Speaks at 9 AM EST.  This is Major.

• FOMC Member Barker Speaks at 12:45 PM EST.  This is Major.

• FOMC Member Schmid at 1:30 PM EST.  This is Major.

• FOMC Member Bowman Speaks at 1:35 PM EST.  This is Major.

For Friday January 10, 2025

• Average Hourly Earnings m/m 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.

• Prelim UoM Consumer Sentiment is out at 10 AM EST.  This is Major.

• Prelim UoM Inflation Expectations is out at 10 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.

Last Wednesday the ZT migrated Higher at around 7:30 AM EST with no economic news to speak of.  The Dow moved Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Lower at 7:30 AM EST and the ZT moved 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 20 plus ticks per contract on this trade.   Each tick is worth $7.625.  Please note: the front month for ZT is now Mar '25 and the Dow is now Mar '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 -Mar 2025 - 1/08/25

Dow - Mar 2025- 1/08/25

Bias

Last Wednesday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint.  The Dow closed Higher by 107 points, the S&P by 9; however, the Nasdaq closed Lower by 11.  All in all a Neutral or Mixed day.  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

Last Wednesday we gave the markets a Neutral or Mixed bias as it was correlated that way, and the indices didn't disappoint.  Today is the first Jobs Friday for 2025 and as such is major.  If this report is stellar, soon to be President Trump will have much to compete with as the Democrats have had a pretty solid record of Job growth.   But as in all things, only time will tell.