Jobs Report

The late Employment Situation report probably won't shed much light on the silly Fed compass of "data dependent." We look for 215,000 and a more people including themselves as looking. The big news is the robust adjustment to the shape of the curve. The risk of holding low yielding 3 to 6 year paper far outweighed the long dirge needed to stand pat.

Thus far, the adjustment process has not included the loss of market function that we warned about at the turn of the year. We still see it coming. We think the next 72 hours in the Equity market will be important. For all the coverage, stocks have been (are) far easier to ride than notes. Our stock model has moved through a crossing pattern this week and is flashing yellow. The objective up is 1848.50 and down is 1810.50. We like being near the exit on a 48 print.

Another push down on Green Packs (Reds will feel the pain) and expect the verbal enforcement of ZIRP to heat up. Yellen may be a fan of optimal control but the 5 year Note is not playing nice. Cooling off the SP may help her out.

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