Cyber Monday doesn’t propel markets

USD: Dec '23 is Down at 103.075.

Energies: Jan '24 Crude is Up at 75.71.

Financials: The Dec '23 30 Year T-Bond is Down 2 ticks and trading at 115.31.

Indices: The Dec '23 S&P 500 emini ES contract is 8 ticks Lower and trading at 4559.00 

Gold: The Dec'23 Gold contract is trading Up at 2015.40.  

Initial conclusion

This is not a correlated market.  The USD is Down and Crude is Up which is normal, and the 30 Year T-Bond is trading Lower.  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.  Asia is trading mainly Lower with the exception of the Shanghai and Sensex exchanges which are Higher.  All of Europe is trading Lower with the exception of the Spanish IBEX exchange which is Higher at the current time.

Possible challenges to traders

• S&P/CS Composite-20 HPI y/y is out at 9 AM EST. This is Major.

• HPI m/m is out at 9 AM EST. This is Major.

• CB Consumer Confidence is out at 10 AM EST. This is Major.

• Richmond Manufacturing Index is out at 10 AM EST. This is Major.

• FOMC Member Goolsbee Speaks at 10 AM EST. This is Major.

• FOMC Member Waller Speaks at 10 :05 AM EST. This is Major.

• FOMC Member Bowman Speaks at 10:45 AM EST. This is major.

• FOMC Member Barr Speaks at 1:05 PM EST. This is Major.

• FOMC Member Barr Speaks at 3:30 PM EST. This is 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.  Today we aren't dealing with a correlated market and our bias is to the Upside.

Yesterday the ZN migrated Higher at around 9:30 AM EST as the S&P hit a High at around the same time.  If you look at the charts below the S&P gave a signal at around 9:30 AM and the ZN started its Upward trend.  Look at the charts below and you'll see a pattern for both assets. S&P hit a High at around 9:30 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 plus ticks per contract on this trade.   Each tick is worth $15.625.  Please note: the front month for the ZN is now Dec '23.  The S&P contract is now Dec' 23.   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 - Dec 2023 - 11/27/23

S&P - Dec 2023 - 11/27/23

Bias

Yesterday we gave the markets a Downside bias as we saw no clear evidence of market correlation Monday morning.  The markets didn't disappoint as the Dow closed Lower by 57 points and the other indices traded Lower as well.  Today we aren't dealing with a correlated market and our bias is Neutral or Mixed.

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

Commentary

Yesterday we saw a very Mixed Market in the AM hours.  The one clue we had that a Downside Day was imminent was the Bonds and Gold trading Higher as this signified a Downside Day.  Despite all the hype regarding Cyber Monday, it didn't seem to do much to propel the markets forward, in fact they fell across the board.  Not by much mind you but the markets didn't advance by the end of the session.  The actual sales numbers to be reported regarding Cyber Monday will be released at a later date.  We have just heard that the current ceasefire or "pause" in the Israel Hamas war was extended by two days so to give more freedom to both Israeli and Palestine prisoners.  We will continue to monitor this situation and report on it as applicable.  It is of course good news that this is happening.  Today we have about 9 reports, most of which are FOMC Members speaking.