Trouble In Paradise

The May NFP jobs just dropped half an hour ago and the numbers were was so dismal that it left a smoking impact crater across equity futures. Apparently we added 38k jobs which was several standard deviations below the median forecast of 160k. The number was the lowest since September 2010 and adds insult to injury after the April report was already revised downward from 160k to 123k. Smoking!!! Let’s do a quick review of the damage inflicted thus far:

The E-Mini futures – couldn’t have happened at a better time. The tape literally flipped on a dime here and I don’t recommend stepping underneath that falling sword.

Bonds – sometimes I’m getting tired of being right all the time (no – I’m not). Recall how I mused that a rate hike may still drive t-bonds higher? Well until about an hour ago that was the expectation and now that it’s probably off the table bonds are literally exploding higher. I’ve said it before and I’ll say it again: There’s no stopping bonds – it’ll be the most profitable vertical in the months/years to come.

Gold – I was already long here as you recall and this campaign just became very profitable 🙂

There’s not stopping the Yen as of late – good (perceived) U.S. economy and expectation of hiking rates = bullish. Bad economy and rate hike shelved once again = even more bullish. Rumor has it Kuroda is preparing himself for ritual seppuku right now…

Last not but least the Euro – I’m glad that I have been literally draining my local ATM over the past few days as this is going to leave a mark. Not happy about this one – looks like I’m going to have to double subscriptions rates next month (j/k).

Alright I keep you guys posted over the session. For now I don’t recommend bottom fishing or top calling. Let the shockwave pass and then start looking for limping victims that may make easy prey