Good news – An upside day

USD: Mar '26 is Up at 97.735.  

Energies: Mar '26 Crude is Up at 66.04.

Financials: The Mar '26 30 Year T-Bond is Lower by 6 ticks and trading at 117.14.

Indices: The Mar '26 S&P 500 emini ES contract is 56 ticks Lower and trading at 6880.50.

Gold: The Feb'26 Gold contract is trading Down at 5004.70.

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 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 Higher except the Shanghai and Sensex exchanges.  Currently all of Europe is trading Lower.

Possible challenges to traders                                                  

• Unemployment Claims are out at 8:30 AM EST.    This is Major.
• Philly Fed MFG Index is out at 8:30 AM EST.   This is Major.
• FOMC Member Bowman Speaks at 8:30 AM EST.  This is Major.
• Goods Trade Balance is out at 8:30 AM EST.  This is Major.
• Prelim Wholesale Inventories m/m is out at 8:30 AM EST.  This is Major.
• Trade Balance is out at 8:30 AM EST.  This is Major.
• FOMC Member Kashkari Speaks at 9 AM EST.  This is Major.
• Pending Home Sales is out at 10 AM EST.  This is Major.    
• CB Leading Index m/m is out at 10 AM EST.    This is Major.
• FOMC Member Goolsbee Speaks at 10:30 AM EST.  This is Major.
• Natural Gas Storage is out at 10:30 AM EST. This is Major.
• Crude Oil Inventories is out at 12 noon 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 dived Lower at around 8:30 AM EST with Durable Goods numbers waiting.   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 8:30 AM EST and the Dow climbed Higher 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 Short 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 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

Bias

Yesterday we gave the markets an Upside bias and the markets didn't disappoint.  The Dow closed 35 points Higher, and the other indices traded Higher as well.  Today we aren't dealing with a correlated market, and our bias is Mixed or Neutral.

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

Commentary

Yesterday it appeared the markets were committed to an Upward direction and the markets closed Higher.