Dow down, all others up

USD: Jun '25 is Down at 100.440.  

Energies: Jun '25 Crude is Down at 63.02.

Financials: The Jun '25 30 Year T-Bond is Higher by 16 ticks and trading at 113.06.

Indices: The Jun '25 S&P 500 emini ES contract is 60 ticks Higher and trading at 5919.50.

Gold: The Jun'25 Gold contract is trading Down at 3241.90.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Down which is not 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 Higher and Crude is trading Lower which is correlated. Gold is trading Lower which is not 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 traded Higher with the exception of the Hang Seng and Indian Sensex exchanges which are Lower. All of Europe is trading Higher except the London exchanges which is fractionally Lower.

Possible challenges to traders

• FOMC Member Jefferson Speaks at 9:10 AM EST. This is Major.
• Crude Oil Inventories are out at 10:30 AM EST.  This is Major.
• Lack of Major economic news.

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 AM EST with no economic news pending.  The Dow dropped Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Lower at 7 AM EST and the ZT moved 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 a 20 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Jun '25 and the Dow is Jun '25 as well.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of barcharts

ZT -Jun 2025 - 5/13/25

Dow - Jun 2025- 5/13/25

Bias

Yesterday we gave the markets a Downside bias but only the Dow responded, all other indices closed Higher.  Today we aren't dealing with a correlated market, and our bias is to the Upside.

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

Commentary

Yesterday the CPI data was released, and it appears as though prices didn't advance as much as predicted.  The Dow lost ground as it was correlated to the Downside, but the other indices migrated Higher.