5 May 2017 (8:50 AM EDT)
U.S. index futures went up slightly after excellent employment reports, including a drop in the Unemployment Rate and higher than expected jump in Nonfarm and Private Nonfarm Payroll numbers. But Dow Jones futures have once again slipped in the red, indicating a volatile session in U.S. markets today.
Better employment conditions will increase possibility of the Federal Reserve’s rate hikes, which will mean less liquidity for markets on generous terms. Nowadays markets do not rally on economic growth but on the amount of free liquidity ( or Quantitative Easing) available from big central banks like the Fed and the European Central Bank.
U.S. markets had traded with high volatility yesterday and we may see a similar trading pattern today. Although the overall trend in range bound but major indexes had shown distinct weakness yesterday. Dow Jones is still staying within last week’s range. The index has traded in a very small range this week, between 21,000 and 20,900. This lower level of its current range was breached yesterday and although the index managed to recover and close above that specific level, but it shows that selling pressure is dominating U.S. markets.
Expect a range bound and choppy session in these markets today, where major indexes will continue to roam between major support and resistance levels. Watch those levels and trade with the short term trend.
Good luck, enjoy the session!