Markets down

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Down at 101.035.

Energies: Aug '26 Crude is Up at 69.84.

Financials: The Sep '26 30 Year T-Bond is Lower by 1 tick and trading at 114.04.

Indices: The Jun '26 S&P 500 emini ES contract is 240 ticks Lower and trading at 7461.75

Gold: The Aug'26 Gold contract is trading Down at 4052.00.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Up which is 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 Lower which is not correlated with the US dollar trading Down. 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 Lower with the exception of the Sensex exchange, all of Europe is trading Lower.

Possible challenges to traders

No Major Economic News to Speak of.
Lack of Major Economic 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.

Yesterday the ZT climbed Higher at around 8:30 AM EST to coincide with the 8:30 news items released. 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 8:30 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 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 $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 - 6/26/26

Dow - Jun 2026- 6/26/26

Bias

On Friday we gave the markets a Mixed or Neutral bias. Dow closed 45 points Lower. Today our bias will remain Mixed or Neutral.

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

Commentary

The markets as of late are very confused between the situation is Iran and the affordability concerns. It seems that each trading day someone is breaking the Iran MOU agreement so time will tell how this all works out. 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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