News tsunami derails markets

USD: Sep '26 is Down at 100.980.  

Energies: Sep '26 Crude is Up at 87.44.

Financials: The Sep '26 30 Year T-Bond is Lower by 6 ticks and trading at 110.06.

Indices: The Jun '26 S&P 500 emini ES contract is 121 ticks Lower and trading at 7514.00.

Gold: The Aug'26 Gold contract is trading Up at 4121.90.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Up which is normal, and 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 Higher 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 goes Up the other goes Down. Asia and Europe both traded Mixed.  

Possible challenges to traders                                                                                           

• Crude Oil Inventories is out at 10:30 AM EST. Major.
• El Presidente Speaks at 3 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 ZT dived Lower 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 dived Lower at around 8:30 AM 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 - 7/21/26

Dow - Jun 2026- 7/21/26

Bias

Yesterday we gave the markets an Upside bias, but the markets had other ideas.  The Dow dropped 307 points, and the other indices lost ground as well.  Today our bias is to the Downside.

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

Commentary

Yesterday the markets were correlated to the Upside however the markets traded Lower due to the situation with Iran.   Want to learn Market Correlation and determine market direction hours before the Opening Bell?