This is not a correlated market. The USD is Down and Crude is Up which is normal, but the 30 Year T-Bond is trading fractionally 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 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. All of Europe is trading Higher as well.

Possible challenges to traders

Final GDP q/q is out at 8:30 AM EST. This is Major.
Final GDP Price Index q/q is out at 8:30 AM EST. This is Major.
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.
Unemployment Claims is out at 8:30 AM EST. This is Major.
Goods Trade Balance is out at 8:30 AM EST. This is Major.
Prelim Wholesale Inventories m/m is out at 8:30 AM EST. This is Major.
FOMC Member Barkin Speaks at 8:45 AM EST. This is Major.
FOMC Member Hammack Speaks at 9 AM EST. This is Major.
Pending Home Sales is out at 10 AM EST. This is Major.
Natural Gas Storage is out at 10:30 AM EST. This is Major.
FOMC Member Barr Speaks at 1:15 PM 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.

Yesterday the ZT climbed Higher at around 7:30 AM EST with no news pending. The Dow dived Lower at the same time. Look at the charts below and you'll see a pattern for both assets. The Dow dived Lower at 7:30 AM EST and the ZT 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 Long opportunity on the 2-year note, as a trader you could have netted about a dozen ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for ZT is now Sep '25 and the Dow is now Sep '25. 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 25 - 6/25/25

Dow - Sep 2025- 6/25/25

Bias

Yesterday we gave the markets a Mixed bias and the indices didn't disappoint. The Dow dropped 107 points, the S&P lost about one point, but the Nasdaq closed Higher. All in all, a Mixed day as suggested. Today we aren't dealing with a correlated and will maintain a Neutral or Mixed bias.

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

Commentary

Yesterday the news was ablaze with news that the US air raids over Iran this past weekend didn't completely destroy all of Iran's nuclear capability. This threw the market in a bit of a tailspin but nothing dramatic. As suggested the market's traded Mixed. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.