News tsunami continues

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Up at 101.700.

Energies: Nov '26 Crude is Up at 92.09.

Financials: The Dec '26 30 Year T-Bond is Lower by 7 ticks and trading at 102.14.

Indices: The Sep '26 S&P 500 emini ES contract is 36 ticks Higher and trading at 7724.50.

Gold: The Dec'26 Gold contract is trading Down at 4184.50.

Initial conclusion

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

Possible challenges to traders

Unemployment Claims are out at 8:30 AM EST. Major.
Various FOMC Members Speak at 9:05 AM EST. Major.
Final Manufacturing PMI is out at 9:45 AM EST. Major.
FOMC Member Waller Speaks at 10 AM EST. Major.
ISM Manufacturing PMI is out at 10 AM EST. Major.
Construction Spending is out at 10 AM EST. Major.
ISM Manufacturing Prices is out at 10 AM EST. Major.
Total Vehicle Sales by brand - All Day. Major.
Natural Gas Storage is out at 10:30 AM EST. Major.
Various FOMC Members Speak between 1:30 - 3:30 PM 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.

Yesterday the two year went Higher at around 8:30 AM EST with various 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 climbed Higher at around 8:30 AM EST and the Dow dived Lower 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 Long 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 Dec '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

Yesterday we gave the markets a Neutral or Mixed bias which means the markets could go in any direction and often does. Yesterday the markets traded Mixed as the Dow dropped 444 points, the S&P lost 19 but the Nasdaq gained 64. All-in-all a Mixed or Neutral day. Today our bias is Mixed or Neutral.

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

Commentary

Today we see the news tsunami continues.

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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