Another predictable rally?

USD: Jun '25 is Up at 99.485.  

Energies: Jul '25 Crude is Up at 61.63.

Financials: The Sep '25 30 Year T-Bond is Lower by 1 tick and trading at 112.25.

Indices: The Jun '25 S&P 500 emini ES contract is 5 ticks Lower and trading at 5921.50.

Gold: The Aug'25 Gold contract is trading Down at 3318.50.

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 fractionally Lower.  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 is up the other should be down. I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open. All of Asia traded Lower.  All of Europe is trading Higher.

Possible challenges to traders

• Core PCE Price Index is out at 8:30 AM EST.  This is Major.
• Goods Trade Balance is out at 8:30 AM EST.    This is Major.
• Personal Income m/m is out at 8:30 AM EST.  This is Major.
• Personal Spending is out at 8:30 AM EST.  This is Major.
• Personal Income is out at 8:30 AM EST.  This is Major.
• Preliminary Wholesale Inventory m/m is out at 8:30 AM EST.  This is Major.
• Chicago PMI is out at 9:45 AM EST.  This is Major.
• Revised UoM Consumer Sentiment is out at 10 AM EST.  This is not Major.
• Revised UoM Inflation Expectations is out at 10 AM EST.  This is not Major
• FOMC Member Bostic Speaks at 12:20 PM EST.  This is Major.
• FOMC Member Goolsbee Speaks at 7:30 PM EST.  This is not Major.  After Hours.

Traders, please note that we've changed the Bond instrument from the 10-Year (ZN) to the 2-Year (ZT).  They work exactly the same.

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 7:30 AM EST with no real news to speak of.  The Dow dived Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Lower at 7:30 AM EST and the ZT climbed Higher at 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 ZT is now Sep '25 and the Dow is still Jun '25.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of barcharts 

ZT -Sep 2025 - 5/29/25

Dow - Jun 2025- 5/29/25

Bias

Yesterday we gave the markets an Upside bias and the markets didn't disappoint. The Dow gained 123 points on the session and the other indices traded Higher as well. Today we aren't dealing with a correlated market, and our bias is Neutral or MIxed.

Could this change? Of Course.  Remember, anything can happen in a volatile market.

Commentary

Yesterday, the markets were poised to go higher and they did.  The Dow gained 123 points on the session and the other indices traded higher as well.