MOU signed

USD: Sep '26 is Up at 100.690.  

Energies: Jun '26 Crude is Down at 75.11.

Financials: The Sep '26 30 Year T-Bond is Lower by 14 ticks and trading at 112.30.

Indices: The Jun '26 S&P 500 emini ES contract is 26 ticks Lower and trading at 7564.25.

Gold: The Aug'26 Gold contract is trading Down at 4222.40.

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Down which is normal, but the 30-Year T-Bond is trading Lower.  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 Lower which is not 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 Higher with the exception of the Hang Seng and Singapore exchanges, all of Europe is trading Lower except the Spanish Ibex exchange.  

Possible Challenges to Traders                                                  

• Unemployment Claims are out at 8:30 AM EST. Major.
• Philly Fed Mfg. Index is out at 8:30 AM EST.  Major.   
• CB Leading Index m/m is out at 10 AM EST. Major.
• Natural Gas Storage is out at 10:30 AM EST. 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.

Last Thursday the ZT dived Lower at around 2 PM EST to coincide with the Fed announcement.   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 2 PM 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 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

ZT -Sep 26 - 6/18/26

Dow - Jun 2026- 6/18/26

Bias

Last Thursday we gave the markets a Neutral bias, but the markets had other ideas.  The Dow closed Higher by 72 points and the other indices traded Higher as well.  Today our bias is Neutral or Mixed.

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

Commentary

Well Friday was the Juneteenth holiday and the markets were closed.  However, the news was that the long-awaited Memo of Understanding (MOU) between the US and Iran was signed. This MOU only covers 60 days to allow the sides to come to terms on various issues.  Nuclear fission being one of them.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?