Inflationary Concerns Ruling The Markets, DJIA Off Triple-Digits

For the second session in a row, the U.S. indices are in the red. Led by the DJIA, equities pricing is suffering following today’s jobs report. Even though the employment numbers came in strong, inflationary concerns are spiking as are bond yields.

Here is a quick look at the U.S. jobs report released during the pre-market hours:

Event                                                          Actual      Projected     Previous

Average Hourly Earnings (YoY, Sep)        2.8%             2.8%                2.9%

Non Farm Payrolls (Sep)                            134K            185K                270K

Unemployment Rate (Sep)                        3.7%             3.8%                3.9%

Although Non Farm Payrolls missed the mark, the aggregate Unemployment Rate hit historical lows at 3.7%. Performance in this area has been dramatic since 2016, with today’s levels approaching those of the late 1960s.

Of course, markets have a mind of their own. Rising bond yields have many investors running for cover. Yields for the U.S. 10-Year T-Bill are up again today, sustaining values above 3.2%. These levels have not been seen since 2011.

DJIA Technicals: E-mini DOW Futures

Thursday’s pain for December E-mini DOW futures has continued. Prices are falling as “inflation” is the word of the day.

Levels to watch until the closing bell:

• Support(1): Bollinger MP, 26382
• Support(2): Daily SMA, 26273

Bottom Line: At press time, values are plummeting toward downside support. A buy beneath the key area of 26500 in the E-mini DOW is a premium entry to the long.

For the rest of the session, I will have buys queued up from 26386, just above the Bollinger MP. With an initial stop at 26239, this short-term position trade produces 100 ticks on a sub-1:1 risk vs reward management plan.

This trade aligns with both the long-term trend and prevailing fundamentals. With a bit of luck, today’s action will prompt election and activate the bullish position.