Again one day up, next day not

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Up at 98.945.

Energies: Sep '26 Crude is Down at 85.06

Financials: The Sep '26 30 Year T-Bond is Higher by 14 ticks and trading at 109.30.

Indices: The Sep '26 S&P 500 emini ES contract is 144 ticks Higher and trading at 7706.00.

Gold: The Aug'26 Gold contract is trading Down at 4693.20

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Down which is 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 Lower which is 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 goes Up the other goes Down. All of Asia traded Lower. All of Europe is trading Mixed.

Possible challenges to traders

ADP Weekly Employment Change is out at 8:15 AM EST. Major.
FOMC Member Barkin Speaks at 8:30 AM EST. Major.
HPI m/m is out at 9 AM EST. Major.
S&P/CS Composite-20 HPI y/y is out at 9 AM EST. Major.
CB Consumer Confidence is out at 10 AM EST. Major.
New Home Sales is out at 10 AM EST. Major.
Richmond MFG Index is out at 10 AM EST. Major.

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 climbed Higher at around 8 AM EST with no real news pending. The Dow dived Lower at around the same time. Look at the charts below and you'll see a pattern for both assets. The ZT climbed Higher at around 8 AM EST and the Dow dived Lower 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 Long 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 is now Sep '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 -Sep 26 - 8/24/26

Dow - Sep 2026- 8/24/26

Bias

Yesterday we gave the markets a Downside bias and two of the three major markets didn't disappoint. The Dow rose by 140 points but the other indices fell. Today our bias is to the Upside.

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

Commentary

As mentioned earlier it appears that we may be heading for the scenario of one day up, next day not. Hormuz is closed with no scheduled talks. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

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