Markets stay mixed

USD: Jun '24 is Down at 105.970.

Energies: Jun '24 Crude is Down at 81.45.

Financials: The June '24 30 Year T-Bond is Up 31 ticks and trading at 115.03

Indices: The Jun '24 S&P 500 emini ES contract is 76 ticks Lower and trading at 5030.00.

Gold: The Jun'24 Gold contract is trading Down at 2393.00.  

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Down which is not normal, but 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 Lower which is not correlated. Gold is trading Lower which is not correlated with the US dollar trading Down.  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 Higher with the exception of the Indian Sensex. Currently all of Europe is trading Lower. 

Possible challenges to traders

• No Major Economic News to speak of.

• Lack of Major Economic news.

Treasuries

Traders, please note that we've changed the Bond instrument from the 30 year (ZB) to the 10 year (ZN). They work exactly the same.  

We've elected to switch gears a bit and show correlation between the 10-year bond (ZN) and the S&P futures contract.  The S&P contract is the Standard and Poor's, 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 ZN migrated Lower at around 9:45 AM EST as the S&P hit a Low at around the same time. If you look at the charts below the S&P gave a signal at around 9:45 AM and the ZN started its Downward slide. Look at the charts below and you'll see a pattern for both assets. S&P hit a Low at around 9:45 AM and migrated Higher. These charts represent the newest version of MultiCharts and I've changed the timeframe to a 15-minute chart to display better.  This represented a Short opportunity on the 10-year note, as a trader you could have netted about 20 ticks per contract on this trade.  Each tick is worth $15.625.  Please note: the front month for both the ZN and the S&P are now Jun '24. I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.  

Charts courtesy of MultiCharts built on an AMP platform

ZN -Jun 2024 - 04/18/24

S&P - Jun 2024 - 04/18/24

Bias

Yesterday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint.  The Dow gained 22 points but the S&P and Nasdaq both lost ground. 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 we suggested a Neutral or Mixed day as we didn't see much in the way of Market Correlation Thursday morning. The markets traded and ended the session Mixed as suggested. We had a virtual tsunami of economic news yesterday, but it wasn't enough to move the markets in one direction or another.  This has been pretty much the story this week and we feel that last weekend's attack on Israel didn't help much. The good news is the markets have remained relatively stable and the price of crude hasn't fluctuated dramatically.  Of course this make change as time goes on.  Israel will at some point counterattack Iran, and we may be dealing with a different story altogether, but time will tell how that progresses.