As crude oil turns volatile and the posts record highs, iiTrader senior market strategist Bill Baruch breaks down three key market themes he is watching for the short week ahead.
1. Non-farm payrolls
The Bureau of Labor Statistics publishes its monthly employment data on Friday before the market's opening bell, and Baruch is going to keep a close eye on the report, as it is a key measure of economic health.
If the figures beat consensus estimates, "then the June 14th [Federal Reserve] rate hike is all but certain," he said Friday on CNBC's "Trading Nation."
Last month's reading indicated the economy added 211,000 new jobs, higher than economists' estimates, while the unemployment rate fell to a decade-low level of 4.4 percent.
2. Oil inventory
Crude oil logged a volatile week, with the commodity posting its largest one-day drop in three weeks on Thursday before settling Friday afternoon pennies below $50 per barrel. Baruch is closely watching crude oil inventories, set to be reported by the Energy Information Administration on Wednesday.
This report will mark the first report following last week's OPEC meeting in Austria, in which OPEC's output-cut decision fell short of the market's expectations. Record levels of U.S. supply broadly remain a concern for the market.
"Production has picked up in the lower 48 states the last 15 weeks in a row dating back to February. Shorts are getting squeezed after the OPEC drop," Baruch said.
He added that there may be an opportunity to sell the commodity if it should reach $50 per barrel once again.
3. Gold and silver's relationship
As gold saw its third consecutive positive week and silver logged its best week since early January, Baruch is watching the ratio of the two metals, which he notes is near historic highs.
"We like selling gold and buying silver," he said.
Baruch is looking for silver to continue firming, but he also sees the U.S. dollar firming, which would likely hurt gold prices.
