Markets roll higher

USD: Sept '25 is Up at 96.995.  

Energies: Nov '25 Crude is Up at 62.92.

Financials: The Dec '25 30 Year T-Bond is Higher by 5 ticks and trading at 116.13.

Indices: The Sep '25 S&P 500 emini ES contract is 31 ticks Lower and trading at 6746.25.

Gold: The Dec'25 Gold contract is trading Up at 3818.30.

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 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. Asia traded Mixed.  All of Europe is trading Higher.

Possible challenges to traders

• Current Account is out at 8:30 AM EST.  This is Major.

• FOMC Member Bowman Speaks at 9 AM EST.  This is Major.

• Flash Manufacturing PMI is out at 9:45 AM EST.  This is Major.

• Flash Services PMI is out at 9:45 AM EST.  This is Major.

• Richmond MFG Index is out at 10 AM EST.  This is Major.

• FOMC Member Bostic Speaks at 10 AM EST.  This is Major.

• Fed Chair Powell Speaks at 12:35 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 AM EST with no real eco news items 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 climbed Higher at around 8 AM EST and the ZT dived 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 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Dec '25 and the Dow is now Dec '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 - 9/22/25

Dow - Sep 2025- 9/22/25

Bias

Yesterday we suggested a Down Day and whereas the indices drifted Lower initially by the end of the session that was reversed and the indices zoomed Higher.  The Dow closed 66 points Higher, and the other indices gained ground and closed Higher as well.  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

Well it seemed as though the FOMC Members did something positive as the markets started off Lower but by market close had drifted Higher.  We mentioned that this could occur yesterday as their talks could drive the markets in any direction.  Yesterday it happened to be Higher.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?