Dow down, rest up

USD: Dec '26 is Down at 101.650.

Energies: Nov '26 Crude is Up at 100.82.

Financials: The Dec '26 30 Year T-Bond is Higher by 4 ticks and trading at 105.02.

Indices: The Sep '26 S&P 500 emini ES contract is 32 ticks Lower and trading at 7726.50.

Gold: The Dec'26 Gold contract is trading Up at 4133.40.

Initial conclusion

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 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 Up 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 goes Up the other goes Down.  Asia traded Mixed.    Europe is trading Lower at the present time.  

Possible challenges to traders 

• ADP Weekly Employment Change is out at 8:15 AM EST.    Major.
•  Building Permits are out at 8:30 AM EST.      Major.
• Housing Starts are out at 8:30 AM EST.        Major.
• Pending Home Sales are 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 two year dived Lower at around 9 AM EST with no major news pending.  The Dow climbed Higher at around the same time.  Look at the charts below and you'll see a pattern for both assets. The ZT dived Lower at around 9 AM EST and the Dow climbed Higher 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 Short 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 Dec '26.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of Barcharts

Bias

Yesterday our bias was to the Upside but the markets had other ideas.  The Dow dropped 36 points, but the other indices all rose, so most did trade Higher except the Dow.  Today our bias is Mixed or Neutral.

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

Commentary

Yesterday we had NAHB Housing Market Index as news and it came in lower than expected.  The markets as a result dropped.