In the aftermath of the very disappointing ADP Jobs Report, the S&P 500 and its ETF, the SPDR S&P 500 (SPY), returned to revisit Tuesday morning's pre-spike low, which so far has contained the selling pressure. Meanwhile, the iShares Barclays 20+ Year Treasury Bond ETF (TLT), which tends to move opposite the equity indices (as equity prices decline, bond prices benefit from a flight to safety response), is climbing and appears poised to take off into a new up-leg, depending on investor reaction to Friday's jobs data.

If Friday's Employment Report is more of a disappointment than today's ADP Report, or if the reaction to the news is otherwise negative, strength in the TLT will initiate the next up-leg from the 116-117 area towards 122 and beyond.

However, if Friday's data are much better than ADP has indicated (election year surprise, anyone?), then a decline in the TLTs towards 114-113 will entice me to be a buyer.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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