I'm looking at this week as a "capped" week. The March employment report comes out on Friday, and that has been such a market mover, everything done this week will be in anticipation of that number. Economists (who are always wrong) are looking for job creation of 100,000 new jobs. The current trend of thinking is that for this number to be moving in a good direction we must create and sustain 100,000 jobs a month for three months. To date this number has been very bad and has been shaking both the markets and the fear bid in bonds.
This morning we are looking at a strong open. Our tell, the 10 year, is now standing at 3.87 (up another 3 bp over the weekend). This suggest that there is going to be fresh money on the open which should squeeze the shorts out of their interim positions and bring us higher. Will we gap? I feel like a small gap down is in order for traders. I'm still holding more cash than I would want at the start of what seems to be at least a bounce, and at best a resumption of the bull trend.
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