Markets up, mainly

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Down at 101.075.

Energies: Sep '26 Crude is Down at 83.05.

Financials: The Sep '26 30 Year T-Bond is Higher by 300 ticks and trading at 110.11.

Indices: The Jun '26 S&P 500 emini ES contract is 60 ticks Higher and trading at 7522.50.

Gold: The Aug'26 Gold contract is trading Up at 4103.50.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Down 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 Lower which is correlated. Gold is trading Higher which is correlated with the US dollar trading Down. 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, Europe is trading Higher.

Possible challenges to traders

Core Durable Goods Orders m/m is out at 8:30 AM EST. Major.
Durable Goods Orders m/m is out at 8:30 AM EST. Major.

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.

On Friday the ZT dived Lower at around 8:30 AM EST with no real news items 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 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 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

ZT -Sep 26 - 7/24/26

Dow - Jun 2026- 7/24/26

Bias

On Friday we gave the markets an Upside bias and for the most part the markets didn't disappoint. The Dow and the S&P both traded Higher, but the Nasdaq dropped 75 points on the session. Today our bias is to the Upside.

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

Commentary

On Friday the markets were correlated to the Upside, and the markets didn't disappoint due to the situation in the Middle East. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

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