TRENDING:

GBP/USD

XAU/USD

Neutral bias – Mixed market

Nick Mastrandrea Market Tea Leaves

USD: Mar '26 is Down at 97.885.

Energies: Jan '26 Crude is Down at 57.15.

Financials: The Mar '26 30 Year T-Bond is Higher by 17 ticks and trading at 115.06.

Indices: The Dec '25 S&P 500 emini ES contract is 128 ticks Higher and trading at 6863.00

Gold: The Feb'26 Gold contract is trading Up at 4379.50.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Down which is not normal, but 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 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 Lower except the Sensex and Singapore exchanges. Currently all of Europe is trading Higher.

Possible challenges to Traders

Empire State Mfg. Index is out at 8:30 AM EST. This is Major.
FOMC Member Miran Speaks at 9:30 AM EST. This is Major.
NAHB Housing Market Index is out at 10 AM EST. This is Major.
FOMC Member Williams Speaks at 10:30 AM EST. This is Major.
FOMC Member Miran Speaks at 11 AM 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.

On Friday the ZT dived Lower at around 8:15 AM EST with no major 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 8:15 AM EST and the Dow climbed Higher 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 plus ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for ZT is now Mar '26 and the Dow is still Dec '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 -Mar 26 - 12/12/25

Dow - Dec 2025- 12/12/25

Bias

On Friday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint. The Dow and S&P gained but the Nasdaq dropped 50 points. Today we aren't dealing with a corelated market, and our bias is to the Upside.

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

Commentary

On Friday we only had three FOMC members speaking as economic news and that didn't serve to move the markets in a unified, cohesive manner. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD clings to small gains near 1.1750

Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.

GBP/USD remains confined in a range above mid-1.3300s ahead of UK jobs report

The GBP/USD pair extends its sideways consolidative price move through the Asian session on Tuesday and currently trades around the 1.3370-1.3365 region, nearly unchanged for the day. Traders seem reluctant and opt to wait for this week's important macro releases and the key central bank event risk before placing fresh directional bets.

Gold defends $4,300 as focus shifts to US NFP, PMI data

Gold price holds the $4,300 level, easing from the highest since October 21 in the Asian trading hours on Tuesday. The precious metal stays afloat on further US Federal Reserve rate cut bets. The US Nonfarm Payrolls report will take center stage later on Tuesday. Also, the US Retail Sales and Purchasing Managers Index will be published.

Top Crypto Losers: Aster, Midnight, and Ethena extend losses as selling pressure mounts

Aster, Midnight, and Ethena are the altcoins with the most losses over the last 24 hours, as the broader cryptocurrency market weakens amid Bitcoin dropping below $86,000.

NFP preview: Complex data release will determine if Fed was right to cut rates

The long wait is over, and the Bureau of Labor Statistics in the US will release nonfarm payrolls reports for both November and October at 1330 GMT on Tuesday. The overall NFP figure for October is expected to be -10k, however, it is expected to be influenced by a massive 130k drop in federal department workers.

BNB Price Forecast: BNB slips below $855 as bearish on-chain signals and momentum indicators turn negative

BNB, formerly known as Binance Coin, continues to trade down around $855 at the time of writing on Tuesday, after a slight decline the previous day. Bearish sentiment further strengthens as BNB’s on-chain and derivatives data show rising retail activity.