Short Term Trading Week Starting: 02 Sep, page-90

Good morning and afternoon,

So is it "really good jobs numbers" from the ADP private payrolls?  Or "really good jobs numbers" coming up?  I thought the president already got a lecture on this kind of tweet.

Never mind, good employment and ISM non-manufacturing data plus trade war meeting optimism means two things:  A break out of the recent range and a change in the expectations for a big rate cut on 18 September.  If the bulls get too much ground, maybe no rate cut at all.  The Fed has been compensating for both equity and bond markets and they were not talking about rate cuts before the last market plunge.   Both the Federal Reserve and the White House want margin for error.  So how big a margin will they allow the bulls to gather?  And how much room for error will precious metals allow?

NYSE A-D lines ended at +982. NYSE breadth at +3.23:1 and NASD breadth at 3.68:1.

Treasury yields moved to between 10 and 12 bps higher during the US cash session. The US 2-year note gained 10 bps to yield 1.54% and the 10-year note added 11 bps to yield 1.57%.  The big bond took on 10 bps and left off at about 2.05%.

SPX 2915 seems a distant memory.  SPX 2945/2950 is now the point where support/resistance paths cross going into Friday's cash session and the release of Department of Labor employment data before the bell.  A fast liquidation would probably settle there.   You will see the massive gap from 2939 to 2964.50 on the ES futures and an rth point of control at 2977.50.  The bottom of that fresh gap is not far from the opening print of 2966.

The US bond scene today showed aggressive selling as funds were diverted from tenors that have been trading more like the stock market over the last year.  Traders will be watching that carefully going into next week.