Markets rebound again and again [Video]
|US Dollar: Sept '21 USD is Up at 92.965.
Energies: Aug '21 Crude is Down at 71.90.
Financials: The Sept '21 30 Year bond is Down 19 ticks and trading at 163.29.
Indices: The Sept '21 S&P 500 emini ES contract is 76 ticks Higher and trading at 4378.50.
Gold: The Aug'21 Gold contract is trading Down at 1803.70. Gold is 17 ticks Lower than its close.
Initial conclusion
This is not a correlated market. The dollar is Up+ and Crude is Down- which is normal but the 30 year Bond is trading Lower. 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 Lower 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. Asia is trading Mixed. All of Europe is trading Higher.
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
Bias
Yesterday we gave the markets an Upside bias as both Gold and the Bonds were trading Lower Thursday morning. The economic news reported wasn't stellar either but the Dow closed 25 points Higher and the other indices traded Higher as well. Today we aren't dealing with a correlated market and bias is to the upside.
Could this change? Of Course. Remember anything can happen in a volatile market.
Commentary
Yesterday we gave the markets an Upside bias as it was correlated that way. The Bonds and Gold were both trading Lower and this usually reflects as Upside day. The markets didn't disappoint however all the economic news didn't meet expectations. Unemployment claims were up (which isn't good) and came in at 419,000 versus 350,000 expected. Existing Home Sales didn't meet expectations, nor did CB Leading Index. So what's the point? Market Correlation usually beats out non stellar economic reports. Today we only have Flash Services and Manufacturing PMI (two separate reports).
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