Trump comments propel markets, again

USD: Mar '26 is Down at 98.155.  

Energies: Feb '26 Crude is Up at 60.34.

Financials: The Mar '26 30 Year T-Bond is Higher by 12 ticks and trading at 115.18.

Indices: The Mar '26 S&P 500 emini ES contract is 36 ticks Lower and trading at 6936.00

Gold: The Feb'26 Gold contract is trading Up at 4924.28.

Initial conclusion

This is a nearly correlated market.  The USD is Down and Crude is Up which is 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 Higher which is correlated. Gold is trading Higher which is 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. All of Asia traded Higher.  Currently Europe is trading Mixed.

Possible challenges to traders                                                  

• Flash MFG. PMI is out at 9:45 AM EST.  This is Major.
• Flash Services PMI is out at 9:45 AM EST.  This is Major.
• Revised UOM Consumer Sentiment out at 10 AM EST. This is not Major.
• Revised UOM Inflation Expectations is out at 10 AM EST.  This is not Major.   
• CB Leading Index m/m is tentative. This is Major.

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 dived Lower at around 8:15 AM EST waiting for various economic reports.   The Dow climbed Higher at around the same time.  Look at the charts below and you'll see a pattern for both assets. The ZT dived Lower at around 8:15 AM EST and the Dow 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 Short opportunity on the 2-year note, as a trader you could have netted about a dozen plus ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for the ZT and YM are both Mar '26.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of BarCharts

ZT -Mar 26 - 1/22/26

Dow - Mar 2026- 1/22/26

Bias

Yesterday we gave the markets an Upside bias as the markets were correlated that way and the indices didn't disappoint as the Dow climbed Higher by 281 points and the other indices gained ground as well.  Today we're dealing with a nearly correlated market, and our bias is to the Downside.

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

Commentary

Apparently yesterday President Trump negotiated a deal for Greenland without owning the island outright. It seems the Danish kingdom will allow the United States to build military bases there and have rare earth mining capability.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?