Markets make a u-turn

USD: Mar '26 is Up at 98.955.  

Energies: Apr '26 Crude is Up at 76.70.

Financials: The Mar '26 30 Year T-Bond is Lower by 20 ticks and trading at 116.14.

Indices: The Mar '26 S&P 500 emini ES contract is 3 ticks Lower and trading at 6875.00.

Gold: The Apr'26 Gold contract is trading Up at 5173.00

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Up which is not 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 Lower and Crude is trading Higher which is 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.  Currently all of Europe is trading Higher as well.

Possible challenges to traders                                                  

• Challenger Job Cuts y/yis out at 7:30 AM EST. This is Major.
• Unemployment Claims is out at 8:30 AM EST. This is Major.
• Import Prices m/m is out at 8:30 AM EST.  This is Major.
• Prelim Nonfarm Productivity q/q is out at 8:30 AM EST. This is not Major.
• Prelim Unit Labor Costs q/q is out at 8:30 AM EST. This is not Major.
• Natural Gas Storage is out at 10:30 AM EST. This is Major.
• FOMC Member Bowman Speaks at 1 PM EST. This is Major. 

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 dived Lower at around 8:30 AM EST with no real news pending. The Dow climbed Higher at around the same time.  Look at the charts below and you'll see a pattern for both assets. The ZT dived Lower at around 8:30 AM EST and the Dow climbed 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 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 the ZT is now Jun '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 -Jun 26 - 3/04/26

Dow - Jun 2026- 3/04/26

Bias

Yesterday we gave the markets a Neutral or Mixed bias, but the markets had other plans.  The Dow closed Higher by 238 points and the other indices traded Higher as well.  Today our bias is to the Upside.

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

Commentary

It appears that the markets staged a turnaround today so finally the Iran news may be starting to wear off but we will let time make that determination.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?