Earth day doesn’t help [Video]
|US Dollar: Jun '21 USD Down at 91.020.
Energies: Jun'21 Crude is Up at 61.51.
Financials: The June '21 30 year bond is Up 3 ticks and trading at 158.17.
Indices: The June'21 S&P 500 emini ES contract is 33 ticks Higher and trading at 4136.00.
Gold: The June'21 Gold contract is trading Up at 1785.00. Gold is 33 ticks Higher than its close.
Initial Conclusion
This is not a correlated market. The dollar is Down- and Crude is Up+ which is normal but the 30 year Bond is trading Higher. The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice-versa. The S&P is Higher and Crude is trading Higher which is not correlated. Gold is trading Higher which is correlated with the US dollar trading Lower. 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. Asia is trading Mixed with half the exchanges Higher and the other half Lower. Currently all of Europe is trading Lower.
Possible challenges to traders today
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Flash Manufacturing PMI is out at 9:45 AM EST. This is Major.
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Flash Services PMI is out at 9:45 AM EST. This is Major.
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New Home Sales is out at 10 AM EST. This is Major.
Bias
Yesterday we gave the markets a Downside bias as both the USD and the Bonds were trading Higher and this usually signifies a Downward day. The markets didn't disappoint as the Dow dropped 321 points and the other indices lost ground as well. Today we aren't dealing with a correlated market and our bias is to the Upside.
Could this change? Of Course. Remember anything can happen in a volatile market.
Commentary
Yesterday was Earth Day which is supposed to represent peace, tranquility and harmony with Mother Nature. I'm still old enough to remember the very first Earth Day which I think was 1970 or 71. But all of that was for naught yesterday as the markets did fall. I suppose the Smart Money and traders wanted to take money off the table after Wednesday's run up but I hope we don't get into the one day Up, next day Down scenario as that will cause a false sense of direction. We view each and every day as a different opportunity and judge each day accordingly. Will today advance? As in all things, only time will tell....
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