This is not a correlated market. The dollar is Up+ and Crude is Up+ which is not normal and the 30 year Bond is trading Lower. The Financials should always correlate with the US dollar such that if the dollar is lower then 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. All of Asia is trading Lower with the exception of the Japanese Nikkei which is currently Higher. At this time all of Europe is trading Lower.

Possible challenges to traders today

Core Durable Goods Orders m/m is out at 8:30 AM EST. This is Major.
Durable Goods Orders m/m is out at 8:30 AM EST. This is Major.
HPI m/m is out at 9 AM EST, This is Major.
S&P/CS Composite-20 HPI y/y is out at 9 AM EST. This is Major.
CB Consumer Confidence is out at 10 AM EST. This is Major.
Richmond Manufacturing Index is out at 10 AM EST. This is Major.

Bias

Yesterday we gave the markets a Downside bias as Crude and the Bonds were trading Higher Monday morning and that usually reflects a Downside day. The markets however had other ideas as the Dow gained 83 points and the other indices closed Higher. Today we aren't dealing with a correlated market and our bias is to the Downside.

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

Commentary

It would appear as though the markets are truly in an uptrend as Monday had one economic report: New Home Sales that did not meet expectations coming in at 676,000 versus 800,000 expected yet the markets closed to the Upside. We can only conclude that Smart Money wanted to see the markets Higher and so it was. Today we have far more reports, all of which are Major. Durable Goods and Core Durable Goods are out at 8:30 AM EST. HPI and Consumer Confidence are also out and tomorrow we have FOMC Day.

Author

Nick Mastrandrea

Market Tea Leaves

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.