News tsunami derails markets

USD: Dec '25 is Up at 100.100.  

Energies: Dec '25 Crude is Down at 58.47.

Financials: The Dec '25 30 Year T-Bond is Higher by 15 ticks and trading at 117.12.

Indices: The Dec '25 S&P 500 emini ES contract is 140 ticks Higher and trading at 6592.50.

Gold: The Dec'25 Gold contract is trading Up at 4062.10.

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Down 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 Lower which is correlated. Gold is trading Higher which is not 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 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. All of Asia traded Mixed.   Currently all of Europe is trading Lower except the Spanish Ibex exchange.

Possible challenges to traders                                              

• FOMC Member Williams Speaks at 7:30 AM EST.  Major.
• FOMC Member Barr Speaks at 8:30 AM EST.  Major.
• FOMC Member Jefferson Speaks at 8:45 AM EST.  Major.
• FOMC Member Logan Speaks is out at 9 AM EST.  Major.
• Flash Manufacturing PMI is out at 9:45 AM EST.  Major.
• Flash Services PMI is out at 9:45 AM EST.  Major.
• Revised UOM Consumer Sentiment is out at 10 AM EST. Not Major.
• Revised UOM Inflation Expectations is out at 10 AM EST. Not Major.
• CB Leading Index m/m - tentative.  Major.
• Final Wholesale Inventories m/m is out at 10 AM EST.  Major.
• CB Leading Index m/m is tentative.  Major.
• FOMC Meeting Minutes is out at 2 PM 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.

Yesterday the ZT climbed Higher at around 8:30 AM EST with the Jobs Report from September.   The Dow dived Lower 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 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 Long opportunity on the 2-year note, as a trader you could have netted about a 30 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Dec '25 and the Dow is now 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

Bias

Yesterday we gave the markets an Upside bias, but the markets had other ideas as Dow closed Lower by 258 points and the other indices lost ground as well. Today we aren't dealing with a correlated market, and our bias is to the Upside.

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

Commentary

So, the president signed the bill, so now what happens?  That's the big 'what if ' of this entire scenario. We thought the markets would climb Higher knowing that the bill is now law but that didn't happen as the September job numbers were released and that drove the markets Lower.  Be advised there will be no Jobs Report for October 2025.