Happy labor day

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Up at 99.070

Energies: Sep '26 Crude is Down at 90.65.

Financials: The Sep '26 30 Year T-Bond is Higher by 1 tick and trading at 108.23.

Indices: The Sep '26 S&P 500 emini ES contract is 22 ticks Higher and trading at 7760.00.

Gold: The Aug'26 Gold contract is trading Down at 4417.90

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Down which is normal, but the 30-Year T-Bond is trading Higher. 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 Lower 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. All of Asia traded Higher except the Shanghai exchange. All of Europe is trading Higher.

Possible challenges to traders

Average Hourly Earnings m/m is out at 8:30 AM EST. Major.
Non-Farm Employment Change is out at 8:30 AM EST. Major.
Unemployment Rate is out at 8:30 AM 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 ZT gained ground at around 8:30AM EST with no real 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 gained ground Higher at around 8:30 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 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 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

ZT -Sep 26 - 9/3/26

Dow - Sep 2026- 9/3/26

Bias

Yesterday we gave the markets a Neutral or Mixed bias however the markets had other ideas. The Dow gained 624 points and the other indices gained ground as well. Today our bias is Neutral or Mixed.

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

Commentary

Yesterday the markets did an abrupt about face and gained ground for a change. The Dow gained 624 points and the other indices closed Higher as well. Will this continue? Only time will tell. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

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