Markets higher, mainly

USD: Jun '25 is Up at 99.040.  

Energies: Jul '25 Crude is Up at 65.52.

Financials: The Sep '25 30 Year T-Bond is Higher by 16 ticks and trading at 112.27.

Indices: The Jun '25 S&P 500 emini ES contract is 20 ticks Higher and trading at 6015.25.

Gold: The Aug'25 Gold contract is trading Up at 3355.40.

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Up which is not normal, and 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 Higher which is not correlated. Gold is trading Higher which is not 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 traded Higher. Europe is trading mainly Lower with the exception of the Spanish Ibex exchange.

Possible challenges to traders

• NFIB Small Business Index is out at 6 AM EST. This is Major.
• President Trump Speaks at 4 PM EST. This is after the market closes so not Major. But it is Trump, so you never know.
• 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 slide Lower at around 7:30 AM EST with no economic news pending. The Dow climbed Higher at the same time. Look at the charts below and you'll see a pattern for both assets. The Dow moved Higher at 7:30 AM EST and the ZT slide Lower 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 ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Sep '25 and the Dow is still Jun '25.  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 25 - 6/09/25

Dow - Jun 2025- 6/09/25

Bias

Yesterday we gave the markets an Upside bias as both the USD and Gold were Lower.  Nearly all the indices traded to the Upside except the Dow which was off by 1 point.  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

This past weekend we had some "excitement" as the President sent National Guard troops to California to quell a protest of ICE as the folks out there aren't too fond of an agency that could deport out of the country.  Nonetheless this didn't stop the markets from moving ahead albeit slightly.  Will this continue?  Only time will tell.   Want to learn Market Correlation and determine market direction hours before the Opening Bell?