FOMC day

USD: Sep '26 is Up at 99.375.  

Energies: Jun '26 Crude is Up at 75.58.

Financials: The Sep '26 30 Year T-Bond is Lower by 4 ticks and trading at 113.02.

Indices: The Jun '26 S&P 500 emini ES contract is 9 ticks Lower and trading at 7590.00.

Gold: The Aug'26 Gold contract is trading Down at 4351.10.

Initial conclusion

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 Lower and Crude is trading Higher which is 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 goes Up the other goes Down. Asia traded Mixed, all of Europe is trading Higher.

Possible challenges to traders                                                  

• Core Retail Sales m/m is out at 8:30 AM EST.  Major.
• Retail Sales m/ out at 8:30 AM EST.    Major.   
• President Trump Speaks at 9:30 AM EST.   Major.
• Business Inventories is out at 10 AM EST.  Major.
• Pending Home Sales is out at 10 AM EST.  Major.
• Crude Oil Inventories is out at 10:30 AM EST.  Major.
• Fed Funds Rate is out at 2 PM EST.   Major.
• FOMC Economic Projections is out at 2 PM EST.   Major.
• FOMC Statement is out at 2 PM EST.  Major.
• FOMC News Conference starts at 2:30 PM EST.  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 dived Lower at around 8 AM EST with no economic 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 8 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 20 ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for the ZT is now Sep '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 we gave the markets a Neutral bias and the markets didn't disappoint. The Dow closed Higher by 379 points however the other indices traded Lower. Given that today is an FOMC Day, our bias is Neutral or Mixed.

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

Commentary

So today we have the first FOMC meeting chaired by a new Federal Reserve chief and everyone is waiting to see what this new chief will do. El Presidente has made it clear that he wants interest rates to go down (so do I for that matter) but the question in everyone's mind is what will he do?