FOMC day

USD: Dec '25 is Down at 99.160.  

Energies: Jan '26 Crude is Up at 58.57.

Financials: The Mar '26 30 Year T-Bond is Lower by 4 ticks and trading at 115.02.

Indices: The Dec '25 S&P 500 emini ES contract is 12 ticks Lower and trading at 6845.25.

Gold: The Feb'26 Gold contract is trading Down at 4225.30.

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 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 Lower except the Aussie.   Currently Europe is trading Mixed.

Possible challenges to traders                                              

• Employment Cost Index q/q is out at 8:30 AM EST.  This is Major.
• Crude Oil Inventories is out at 10:30 AM EST. This is Major.
• Federal Funds Rate is out at 2 PM EST. This is Major.
• FOMC Economic Projections is out at 2 PM EST. This is Major.
• FOMC Statement is out at 2 PM EST. This is Major.
• FOMC Press Conference starts at 2:30 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 8:15 AM EST with no major news pending.   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 8:15 AM EST and the Dow dived 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 a dozen plus ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for ZT is now Mar '26 and the Dow is still Dec '25.  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 we gave the markets a Mixed or Neutral bias and the markets didn't disappoint.  The Dow gained 117 points, but the other indices lost ground.  Given that today is FOMC Day, our bias is Neutral or Mixed.

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

Commentary

Today is FOMC Day and as such it begs us to ask the age old question: will the Fed lower?  We think they will as it's the best way to stimulate consumer spending and this time of year that is critical.