Markets up mainly

USD: Sept '25 is Up at 97.310.  

Energies: Aug '25 Crude is Up at 68.50.

Financials: The Sep '25 30 Year T-Bond is Higher by 3 ticks and trading at 113.04.

Indices: The Jun '25 S&P 500 emini ES contract is 48 ticks Higher and trading at 6284.25.

Gold: The Aug'25 Gold contract is trading Down at 3293.40.

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 Down 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 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 Higher. All of Europe is trading Mixed.

Possible challenges to traders

• Final Wholesale Inventories m/m is out at 10 AM EST.  This is Major.
• Crude Oil Inventories is out at 10:30 AM EST.  This is Major.
• 10 Year Bond Auction Starts at 1 PM EST.  This is Major.
• FOMC Meeting Minutes is out at 2 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 7:30 AM EST with no eco 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 climbed Higher at 7:30 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 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 now Sep '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 - 7/08/25

Dow - Sep 2025- 7/08/25

Bias

Yesterday we gave the markets an Upside bias as all the instruments we use for Market Correlation purposes were trading Lower Tuesday morning and that is indicative of an Upside Day.  The S&P and Nasdaq closed Higher, however the Dow dropped 43 points. Today our bias is Neutral or Mixed

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

Commentary

Yesterday President Trump decided (once again) to beat the tariff drum by extending the date for tariffs to take effect to August 1st. When is the world going to recognize that he's bluffing and playing poker with our economy, retirement etc. Maybe they already recognize that and want to see how far he will go?