The S&P cracked the 6,000 mark this past week

USD: Dec '24 is Up at 105.365.

Energies: Dec '24 Crude is Down at 69.13.

Financials: The Dec '24 30 Year T-Bond is Down 11 ticks and trading at 117.16.

Indices: The Dec '24 S&P 500 emini ES contract is 70 ticks Higher and trading at 6043.00

Gold: The Dec'24 Gold contract is trading Down at 2671.00.

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 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 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 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 Mixed.  All of Europe is trading Higher. 

Possible challenges to traders

• No Major Market news to speak of.

• Lack of Major Market News.

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.

On Friday the ZT leapt Higher at around 7:30 AM EST with no economic news reported at that time.  The Dow dived Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Lower at 7:30 AM and the ZT moved 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 Long opportunity on the 2-year note, as a trader you could have netted about 20 plus ticks per contract on this trade.   Each tick is worth $7.625.  Please note: the front month for ZT is Dec and the Dow is now Dec '24.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of Barcharts

ZT -Dec 2024 - 11/08/24

Dow - Dec 2024- 11/08/24

Bias

On Friday we gave the markets a Neutral or Mixed bias, but the markets traded to the Upside.  The Dow rose by 260 points and the other indices finished Higher as well.  Today we aren't dealing with a correlated market, and our bias is to the Upside.

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

Commentary

Today is Veterans Day in the United States and is a bank holiday here.  Banks are closed, the Post Office is closed and will not deliver mail today however the stock market is open but the bond market isn't.  What a week this has been.  We had a presidential election, an FOMC Meeting and now Veterans Day.  I swear it doesn't get more exciting and now the S&P cracked the 6,000 mark this past week.  I can only hope that this week will be calmer but as in all things, only time will tell.