FOMC day

USD: Dec '26 is up at 102.240.

Energies: Dec '26 Crude is up at 101.43.

Financials: The Dec '26 30 Year T-Bond is Lower by 4 ticks and trading at 107.11.

Indices: The Sep '26 S&P 500 E-mini ES contract is 39 ticks Higher and trading at 7768.00.

Gold: The Dec'26 Gold contract is trading down at 4059.20.

Initial conclusion

This is not a correlated market. The USD is up, and Crude is up, which is not 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 down, 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 currently Lower.  

Possible challenges to traders 

• Goods Trade Balance is out at 8:30 AM EST.    Major.
• Prelim Wholesale Inventories m/m is out at 8:30 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 Statement is out at 2 PM EST.    Major.
• FOMC Press Conference Starts at 2:30 PM 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 climbed Higher at around 9 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 AM EST and the Dow dived Lower 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 20 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 we suggested a mixed or Neutral day, but the markets had other ideas as the indices rose. The Dow gained 78 points on the session and the other indices closed Higher on the session.  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

Yesterday we suggested a Mixed day but the markets had other ideas. Given that today is FOMC Day, our bias is Neutral.