A new day brings new opportunity

USD: Jun '24 is Up at 105.545.

Energies: Jun '24 Crude is Up at 84.15.

Financials: The June '24 30 Year T-Bond is Up 8 ticks and trading at 113.18

Indices: The Jun '24 S&P 500 emini ES contract is 160 ticks Higher and trading at 5122.00.

Gold: The Jun'24 Gold contract is trading Up at 2358.50  

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Up which is not normal, and 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 Higher and Crude is trading Higher which is not correlated. Gold is trading Higher which is not 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 mainly Higher with the exception of the Sensex and Singapore exchanges which are Lower.  Currently Europe is trading Higher. 

Possible challenges to traders

• Core PCE Price Index m/m is out at 8:30 AM EST.  This is Major

• Personal Income m/m is out at 8:30 AM EST.  This is Major.

• Personal Spending m/m is out at 8:30 AM EST.  This is Major.

• Revised UoM Consumer Sentiment is out at 10 AM EST.  This is not Major.

• Revised UoM Inflation Expectations is out at 10 AM EST.  This is not Major.

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 Higher at around 10 AM EST as the ZN hit a Low at around that time and the S&P moving Lower.  If you look at the charts below the ZN gave a signal at around 10 AM and started its Upward climb.  Look at the charts below and you'll see a pattern for both assets. S&P hit a High at around 10 AM and migrated Lower.  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 Long opportunity on the 10-year note, as a trader you could have netted about a dozen 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 - 04/25/24

S&P - Jun 2024 - 04/25/24

Bias

Yesterday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint.  The Dow dropped 375 points, and the other indices lost ground as well.  Today we aren't dealing with a correlated market and our bias is to the Upside.  I will preface this by saying that we are dealing with an "all boats rising markets" which is to say that all instruments are Higher.  Please keep this in mind and using stop loss if trading.

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

Commentary

Yesterday the GDP numbers were released at 8:30 AM EST and to say the least, didn't wow the markets.  In fact, the markets fell dramatically after the news release.  The Dow closed Lower by 375 points, the S&P lost 23 and the Nasdaq dropped 101.  These numbers are especially important as the Fed uses these numbers to determine interest rates going forward.  Today we have Personal Income and Spending.  These are Major and proven market movers.  Let's hope that this news can reverse the downward trend from yesterday.