Amid all the glad handing and back slapping on CNBC this morning celebrating the supposedly stellar jobs number, the 10-year yield is spiking even as S&P futures are signalling a gap higher at the open.
I may trade the S&P, but I always watch the bond market.
The 10-year is suggesting a Fed tapering sooner rather than later, possibly September according to CNBC economist Steve Liesman.
The amount of job revisions alone should convince any reasonable person that these events are worthless in the overall scheme of things. Getting caught up in the minutiae of the exact number provided by the government is a waste of time, in my opinion, and takes attention away from what is really going on. It's the ultimate diversion.
What's really going on today is 1628.93. Either the gap gets filled there or it doesn't. I think it does. And I think it's possible for the market to press into the 1630s. 1650 still sits as an outside target, and today's action should say a lot about whether it will remain one. It still looks great on a volume profile chart.
Inability to fill the gap would be very bad. I doubt that would happen. But keep an eye on internals today. It's a summer Friday in a holiday-shortened week. The pre-market has been where the action is. Who knows if the regular session will dry up -- it's possible the A-team cuts out early.
Filling the gap is not bullish or bearish in itself, but would scream weakness if left open. And it's also quite possible for today's good news to cause a spike into the gap and then a reversal. The action in the 10-year could cause people to sober up quickly.