USD: Sep ’26 is Up at 99.285.
Energies: Oct ’26 Crude is Up at 102.41.
Financials: The Dec ’26 30 Year T-Bond is Higher by 4 ticks and trading at 106.28
Indices: The Sep ’26 S&P 500 emini ES contract is 224 ticks Lower and trading at 7605.75.
Gold: The Dec’26 Gold contract is trading Down at 4330.80.
Initial Conclusion
This is not a correlated market. The USD is Up and Crude is Up which is not normal, and the 30-Year T-Bond is trading Higher. The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Lower and Crude is trading Higher which is correlated. Gold is trading Lower which is correlated with the US dollar trading Up. I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one goes Up the other goes Down. All of Asia traded Lower except Singapore All of Europe is trading Mixed.
Possible Challenges to Traders
- No Major economic news to speak of.
- Lack of Major economic news.
We’ve elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract. The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments. Remember it’s likened to a seesaw, when up goes up the other should go down and vice versa.
Yesterday the ZT climbed Higher at around 8:30 AM EST with CPI numbers pending. The Dow nose dived at around the same time. Look at the charts below and you’ll see a pattern for both assets. The ZT gained ground at around 8:30 AM EST and the Dow dived Lower around the same time. These charts represent the newest version of Bar Charts, and I’ve changed the timeframe to a 15-minute chart to display better. This represented a Long opportunity on the 2-year note, as a trader you could have netted about 20 plus ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for the ZT is now Sep ’26. I’ve changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.
Charts courtesy of Barcharts
Bias
On Friday we gave the markets an Upside bias and the markets didn’t disappoint. The Dow gained 509 points, and the other indices gained ground as well. Today our bias is to the Downside.
Could this change? Of Course. Remember anything can happen in a volatile market.
Commentary
On Friday the markets finally gained ground after nearly a week of retreating due to high crude oil prices.
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