Two out of three ain't bad

USD: Mar '26 is Down at 96.940.  

Energies: Feb '26 Crude is Up at 61.17.

Financials: The Mar '26 30 Year T-Bond is Higher by 16 ticks and trading at 115.27.

Indices: The Mar '26 S&P 500 emini ES contract is 36 ticks Lower and trading at 6936.75.

Gold: The Feb'26 Gold contract is trading Up at 5089.20.

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 except the Aussie Dow and the Indian Sensex.  Currently Europe is trading Higher except the German Dax and Paris exchanges.

Possible challenges to traders                                                  

• Core Durable Goods is out at 8:30 AM EST. This is Major.
• Durable Goods is out at 8:30 AM EST. 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.

Last Friday 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

Bias

On Friday we gave the markets a Downside bias as the markets were correlated that way and the indices for the most part didn't disappoint as the Dow dived Lower by 351 points with only the Nasdaq gaining ground. Today we're dealing with a Mixed market and our bias is to teh Downside.

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

Commentary

Only the weekend we got buried in a massive snowstorm, the like of which we haven't seen in years.  This will undoubtedly place a toll on the markets today.