This is not a correlated market. The USD is Up and Crude is Up which is not normal, but 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 Higher and Crude is trading Higher which is not correlated. Gold is trading Lower which is 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. Asia traded Mixed with half the exchanges Higher and the other half Lower. Currently all of Europe is trading Lower.

Possible challenges to traders

FOMC Member Goolsbee Speaks at 8 AM EST. This is Major.
FOMC Member Bostic Speaks at 9 AM EST. This is Major.
FOMC Member Collins Speaks at 9 AM EST. This is Major.
HPI m/m is out at 9 AM EST. This is Major.
S&P/CS Composite-20 HPI y/y is out at 9 AM EST. This is Major.
FOMC Member Waller Speaks at 9:15 AM EST. This is Major.
FOMC Member Cook Speaks at 9:30 AM EST. This is Major.
CB Consumer Confidence is out at 10 AM EST. This is Major.
Richmond MFG Index is out at 10 AM EST. This is Major.
Final Wholesale Inventory is out at 10 AM EST. This is Major.
FOMC Member Barkin Speaks at 3:20 PM EST. This is Major.
FOMC Member Collins Speaks at 3:20 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 8:30 AM EST with no real economic news to speak of. The Dow dived Lower at around the same time. Look at the charts below and you'll see a pattern for both assets. The ZT climbed Higher at around 8:30 AM EST and the Dow climbed Lower 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 30 plus ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for the ZT and YM are both Mar '26. I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of BarCharts

ZT -Mar 26 - 2/23/26

Dow - Mar 2026- 2/23/26

Bias

Yesterday we gave the markets a Mixed or Neutral bias which means the markets could go anywhere in any direction. The markets veered to the Downside either because of the tariff situation or a very crippling blizzard that began Sunday evening, but no doubt many traders weren't in work yesterday. 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

So, the markets turned negative yesterday, and the Dow dropped 822 points, and the other indices lost ground as well. This evening, we have the State of the Union address, and it will be interesting to hear what the president says. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

EUR/USD risks a deeper drop below 1.1750

EUR/USD keeps its vacillating mood in place as the the NA session drwas to a close on Tuesday, hovering below the 1.1800 hurdle amid acceptable gains in the US Dollar. In the meantime, market participants and the FX galaxy are expected to closely follow President Trump’s SOTU speech around 2AM GMT.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Ripple’s DeFi shift in focus: Navigating XRPL EVM sidechain growth, XRPFi migration and liquidity

Ripple (XRP) has continued to trade under pressure, extending its decline by approximately 63% from the record high of $3.66 in July. The remittance token is trading above support at $1.35, while its upside appears limited by key supply zones, starting with $1.40, at the time of writing on Tuesday.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.