Downside Bias = Downside Day

US Dollar: June USD is Up at 97.880.

Energies: May '19 Crude is Up at 66.08.

Financials: The Jun 30 year bond is Down 3 ticks and trading at 147.08.

Indices: The June S&P 500 emini ES contract is 5 ticks Lower and trading at 2929.50.

Gold: The June Gold contract is trading Up at 1279.40.  Gold is 1 tick Higher than its close.

Initial Conclusion

This is not a correlated market.  The dollar is Up+  and Crude is Up+ which is not normal and the 30 year Bond is trading Lower.  The Financials should always correlate with the US dollar such that if the dollar is lower then 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 not 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 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.

At this hour Asia is trading mainly Lower with the exception of the Nikkei exchange which is Higher. Currently all of Europe is trading Lower.

Possible Challenges To Traders Today

• Core Durable Goods Orders m/m is out at 8:30 AM EST.  This is major.

• Durable Goods Orders m/m is out at 8:30 AM EST.  This is major.

• Unemployment Claims are out at 8:30 AM EST.  This is major.

•  Natural Gas Storage is out at 10:30 AM EST.  This is major.

 Treasuries

We've elected to switch gears a bit and show correlation between the 30 year bond (ZB) and The YM futures contract.  The YM contract is the DJIA and the purpose is to show reverse correlation between the two instruments.  Remember it's liken to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the ZB made a major move at around 8:15 AM EST.  The ZB hit a Low at around that time and the YM hit a High.  If you look at the charts below ZB gave a signal at around 8:15 AM EST and the YM was moving Lower at the same time. Look at the charts below and you'll see a pattern for both assets. ZB hit a Low at around 8:15 AM and the YM was moving Lower at the same time.  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 30 year bond, as a trader you could have netted about 12 ticks per contract on this trade.  Each tick is worth $31.25.  Please note: the front month for the ZB contract is now June, 2019 and I've changed the format to Renko bars such that it may be more apparent and visible.

Charts Courtesy of MultiCharts built on an AMP platform.

Bias

Yesterday we gave the market a Downside bias and the markets didn't disappoint.  The Dow fell by 59 points and the other indices lost ground as well.  Today we aren't dealing with a correlated market and our bias is Neutral.

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

Commentary

Yesterday the only news we had for the US markets was crude oil inventory which was released at 10:30 AM EST.  Only the last few days crude oil has been steadily rising on the news that the US will eliminate waivers on Iranian oil.  The markets took this as a reduction in supply which would increase prices and hence the increase in crude oil.  This is pure speculation and has no basis in reality.  The fact is that the US doesn't need to import oil as we produce enough of our own between fracking and black sand techniques.  The fact is crude oil inventories came in at 5.5 million barrels versus 900,000 expected.  Today we have much more of traditional data being reported.