Mixed bias – A mixed day

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Down at 99.350.

Energies: Sep '26 Crude is Up at 83.16.

Financials: The Sep '26 30 Year T-Bond is Higher by 1 tick and trading at 108.28.

Indices: The Jun '26 S&P 500 emini ES contract is 44 ticks Higher and trading at 7816.00.

Gold: The Aug'26 Gold contract is trading Up at 4452.90.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Up 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 Higher which is not correlated. Gold is trading Higher which is not 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. All of Europe is trading Mixed as well.

Possible challenges to traders

Empire State MFG Index is out at 8:30 AM EST. Major.
NAHB Housing Market Index i0 AM EST. Major.
Lack of Major economic news.

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 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 20 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

On Friday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint. The Dow closed Lower by 108 points. Today our bias is to the Upside.

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

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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