A Jobs Blowout Pins the Dollar at Its High. The Supercycle Score Goes to Plaid.

FROM THE TERMINAL

The dollar's Golden Thread flipped to rising on Friday's close, with its CCI swinging from -89 to +119 in one session. That is the move that knocked gold, silver and palladium back to mixed. The Golden Terminal has the full CCI history behind every market on this board. It's free: one email confirmation, no card.

Open the Golden Terminal and pull up the dollar →

THE LEAD

Friday was supposed to be a quiet jobs number. Economists expected 65,000 new jobs in October. They got 165,000. Unemployment ticked down to 4.1%, and pay rose 0.4% for the month. That is a labor market with no plans to slow down.

A hot jobs number means the Fed has less reason to cut. The 2-year yield jumped five basis points, and the dollar did what a dollar does when rates look sticky. UUP rose 0.73% to $29.13. That matches its highest close of the past year. The Supercycle Score measures where the dollar sits in that range, so it went straight to the floor: zero. They've Gone to Plaid.

The bigger change was under the hood. The dollar's Golden Thread flipped to rising, with its CCI swinging from -89 to +119 in one day. Three markets paid for it. Gold, silver and palladium all held green threads through Thursday's stock rout. Friday, all three slipped back to mixed. None of them broke down. Gold fell less than 1%. But each one stopped climbing, and the board grades the climb.

Jim Rogers likes to say you go look at the thing itself, not the story about it. The thing itself, on Friday, was a dollar sitting at the top of its range with momentum behind it. That is the strongest headwind this model can measure.

Now look at this morning. The dollar index is down 0.42%. Gold is up 1%, silver and copper are up 1.5%. It's tempting to call the dollar's green thread a one-day wonder. Richard Dennis built the Turtle rules for exactly this moment. You don't trade the overnight bounce against a fresh signal. You size small, you respect the trend that printed, and you wait for the next close to tell you something new. The dollar's thread is green until a close says otherwise.

One more note. Platinum, nat gas and corn held green right through the dollar's jump. Corn did it even as speculators cut their bets by almost a third. A market that holds its trend while the dollar flexes is telling you something worth watching.

MACRO

The Treasury curve on Friday's close: 1-month 4.02%, 2-year 4.51%, 10-year 4.86% and 30-year 5.26%. The gap between the 2-year and 10-year narrowed to 35 basis points from 38, because short rates rose faster on the jobs news.

Not everything Friday was hot. The University of Michigan's sentiment index rose to 51 from 48. Consumers' one-year inflation expectation fell to 4.3% from 4.7%. That is the softer side of the same Friday.

The big test comes Tuesday at 8:30 AM ET with the October CPI. Forecasters expect prices up 0.3% for the month and 3.9% from a year ago, up from 3.7%. Core CPI is expected at 2.8% from 2.6%. Wednesday is Veterans Day. Jobless claims land Thursday, and the producer price index Friday, where forecasters expect a 0.4% monthly gain after September's 1.3%.

A hot CPI on top of a hot jobs report would give the dollar's new green thread a second leg. A soft one would give this morning's metals bounce something to stand on.

POSITIONING

Friday's Commitment of Traders report covers positions through Tuesday, November 3, before the jobs number. Large speculators cut their net long in gold futures to about 179,500 contracts from 186,500. That is the seventh straight weekly trim. In silver they went the other way, adding to about 21,300 contracts from 19,700.

The cuts were bigger elsewhere. Net longs in copper fell to about 37,700 from 48,300. In corn they dropped to about 137,600 from 201,300, a cut of nearly a third. Crude longs rose to about 80,300 from 74,300. In stock index futures, Nasdaq 100 longs eased to about 42,900, while the S&P 500 net short shrank to about 129,400. Our data feed did not carry the dollar index positions this week.

The tell: speculators kept leaving gold before the dollar's jump, and gold's thread still only slipped to mixed. Corn's thread stayed green while the crowd sold. When price holds up as the crowd sells, the selling is getting used up.

FROM THE PORCH

The Cape threw a party this weekend. NASA called it MAX Power, three days at Kennedy Space Center for America's 250th. There were Artemis III astronauts, exhibits, and the Thunderbirds over the air show. Saturday sold out, per WKMG News 6.

If you've ever stood under a Thunderbirds pass, you know the strange part. You see the jet first. The sound shows up a beat later, after the jet is already past you. Everybody on the grass whips their head toward the noise, and they're looking at empty sky.

Anybody who grew up in Titusville learned that lesson young. When a shuttle came home to the Cape, it announced itself with a double sonic boom that rattled windows from the river to Orlando. By the time the boom hit your porch, the orbiter was long past it, gliding toward the runway. The boom was real. It just wasn't news about where the shuttle was.

Friday's close was a boom. The dollar matched its high and the Score hit zero, and every head on the grass turned toward it. This morning the dollar is already off four-tenths of a percent. That doesn't make Friday wrong. The close is the close, and the board reads it. It just means the loudest moment is not always where the jet is now.

Coke-TV runs Friday as "the jobs boom kills the rate cut." Pepsi-TV runs it as "stocks steady after the rout." Neither one mentions that the loudest thing over the Cape this weekend was already a mile past the crowd by the time anybody heard it.

Four greens, one red, and a Score at Plaid. Respect the dollar's new thread, keep your size modest, and keep your eyes on CPI Tuesday at 8:30. - Brad

ALSO WORTH READING

A strong dollar doesn't hit every corner of the stock market the same way. The Sector Cycle Radar tracks which sectors are catching money as the cycle turns. It comes out every trading day, and it's free.

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Data sources: live front-month futures quotes as of 7:17 AM ET; ETF-proxy closes for Posture, the Golden Thread and the Score; Nasdaq Composite and S&P 500 index closes; Treasury curve, economic calendar (payrolls, Michigan, CPI and PPI estimates) and CFTC Commitment of Traders data via Financial Modeling Prep. MAX Power at Kennedy Space Center per WKMG News 6/ClickOrlando (Nov. 6 and 7). Hero photo: Unsplash.

This newsletter is for informational purposes only and does not constitute investment advice. Do your own research and consult a licensed financial professional before making any investment decision.