News tsunami derails markets

USD: Mar '26 is Up at 97.860.  

Energies: Mar '26 Crude is Down at 66.05.

Financials: The Mar '26 30 Year T-Bond is Higher by 4 ticks and trading at 117.25.

Indices: The Mar '26 S&P 500 emini ES contract is 56 ticks Lower and trading at 6880.50.

Gold: The Feb'26 Gold contract is trading Up at 5052.70.

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 Lower and Crude is trading Lower which is not 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. Asia traded Higher except the Shanghai and Sensex exchanges.  Currently all of Europe is trading Higher.

Possible challenges to traders                                                  

• Advance GDP q/q is out at 8:30 AM EST.  This is Major.
• Advance GDP Price Index q/q is out at 8:30 AM EST.    This is Major.
• Personal Income m/m is out at 8:30 AM EST.  This is Major.
• Personal Spending is out at 8:30 AM EST.  This is Major.
• Flash Manufacturing PMI m/m is out at 9:45 AM EST.  This is Major.
• Flash Services PMI is out at 9:45 AM EST.   This is Major.
• FOMC Member Bostic Speaks at 9:45 AM EST.  This is Major.
• Revised UoM Consumer Sentiment is out at 10 AM EST. This is not Major.    
• Revised UoM inflation expectation is out at 10 AM EST. This is not Major.
• FOMC Member Logan Speaks at 12:45 PM 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.

Yesterday the ZT climbed Higher at around 8:30 AM EST with Unemployment Claims numbers waiting.   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 30 plus ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for the ZT and YM are both Mar '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 Mixed bias which means the markets could go anywhere in any direction.  Today the markets dived Lower as the Dow dropped 355 points, and the other indices lost ground as well.  Today we aren't dealing with a correlated market and our bias is Mixed.

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

Commentary

Yesterday it appeared that traders wanted to book profits and take money off the tables, so the markets closed Lower.