Markets say no to upside

USD: Sep '26 is Up at 101.390.  

Energies: Aug '26 Crude is Down at 72.02.

Financials: The Sep '26 30 Year T-Bond is Higher by 7 ticks and trading at 113.01.

Indices: The Jun '26 S&P 500 emini ES contract is 28 ticks Higher and trading at 7444.50.

Gold: The Aug'26 Gold contract is trading Down at 4079.30.

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Down which is 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 Lower 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 goes Up the other goes Down. Asia traded Mixed, all of Europe is trading Lower.  

Possible challenges to traders                                                  

• Current Account is out at 8:30 AM EST.   Major.
• New Home Sales is out at 10 AM EST.  Major.   
• Crude Oil Inventories is out at 10:30 AM EST.   Major.
• Bank Stress Test Results is out at 4 PM EST.   Not 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 climbed Higher at around 10 AM EST.   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 10 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 a dozen 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

Bias

Yesterday we gave the markets a Neutral or Mixed bias and towards the end of yesterday's session it appeared that it would close Mixed but gave way at the last moment to close Lower.  The Dow closed 46 points Lower, and the other indices closed Lower as well.  Today our bias is to the Upside.

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.