At 8:15 ADP was expected to report 46,000 non-farm and non-government jobs were created last month but the number came in at just 22,000. The ADP report never carries the weight of the BLS report, but without one of those likely due to the shutdown, I thought today might be different, but it wasn't.
In the first few minutes that followed the release both 5 and 10-year futures ticked up a 32nd and then ticked right back down, at 8:20 when my charts began to plot the openings were mixed, and by 8:30 yields were higher than where they closed yesterday across the board.
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After having opened with bearish gaps yesterday, the 5-year needed to rally back to 3.842 to fill its gap, the 10-year needed to reach 4.281, and the 30-year 4.912. Around 9:00 they all began to recover and right at 10:00, the 5-year traded at exactly 3.842 and the and 30-year at exactly 4.912, and from there yields began to rise again.
Too good to be true as far as chart watching goes, shortly after noon the treasuries all made marginally lower yields for the day and around 2:00 the recoveries gathered momentum when the selling of equities, which had started to weaken just after they opened, intensified.
The SPX eventually traded about 110 points lower on the day and within minutes of it making its low, treasuries made their lowest yields, and they finished the day mixed, all within 0.3 bps of unchanged. The 10-year yield managed to close 0.1 bps back below the trendline it had closed right on top of on Monday, one which it has yet to close above, but its yield is back over the line now.
While that line has a value for today of 4.273, when plotted on a weekly chart its value is 4.259 for the week, so that is the closing bogey for Friday and right now the 10-year yield above 4.28.
As I mentioned yesterday, I could be accused of splitting hairs regarding this trendline along with other features I write about, but with yields reluctant to trend in either direction, clues as to what the future may bring are few and far between.
To me, the bearish ones seem to be outnumbering the bullish ones, and this is just one more to put on that side of the ledger. Based on wave structure, I don't see a real likelihood that yields are about to trend hard in either direction, but I do feel like a bearish/defensive posture is in order.
