News tsunami cometh [Video]
|US Dollar: Jun '21 USD is Up at 90.505.
Energies: Jun'21 Crude is Up at 71.10.
Financials: The Sept '21 30 year bond is Up 9 ticks and trading at 158.28.
Indices: The Jun'21 S&P 500 emini ES contract is 16 ticks Higher and trading at 4249.75.
Gold: The Aug'21 Gold contract is trading Up at 1866.30. Gold is 5 ticks Lower than its close.
Initial conclusion
This is not a correlated market. The dollar is Up+ and Crude is Up+ which is not normal and the 30 year Bond is trading Higher as well. 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 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 Higher with the exception of the Shanghai and Singapore exchanges which are Lower. Currently Europe is trading Higher with the exception of the Milan and Spanish IBEX which is trading Lower.
Possible challenges to traders today
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Retail Sales is out at 8:30 AM EST. This is Major
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Core Retail Sales is out at 8:30 AM EST. This is Major.
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PPI is out at 8:30 AM EST. This is Major.
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Core PPI is out at 8:30 AM EST. This is Major.
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Empire State Manufacturing Index is out at 8:30 AM EST. This is Major.
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Industrial Production m/m is out at 9:15 AM EST. This is Major.
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Capacity Utilization Rate is out at 9:15 AM EST. This is Major.
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Business Inventories m/m is out at 10 AM EST. This is Major.
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NAHB Housing Market Index is out at 10 AM EST. This is Major.
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TIC Long-Term Purchases is out at 4 PM EST. This is not Major.
Bias
Yesterday we gave the markets an Upside bias as the USD and Gold were trading Lower and this usually reflects an Upside day. The markets however had other ideas as the Dow closed lower by 86 points, however the S&P and Nasdaq both traded Higher. All in all a Mixed day. Today we aren't dealing with a correlated market and our bias is Neutral.
Could this change? Of Course. Remember anything can happen in a volatile market.
Commentary
Yesterday we suggested an Upside day as both the USD and Gold were trading Lower and that typically is indicative of an Upside day. The markets had other ideas of course. Today we have a virtual tsunami of economic news and reports in that we have 10 economic reports, most of which are major. Given that they are Major they can change market direction so this is something to be mindful of. Tomorrow we have the FOMC Meeting which of course is major as well.
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