News tsunami doesn't derail markets

USD: Dec '25 is Down at 99.140.  

Energies: Dec '25 Crude is Up at 59.28.

Financials: The Dec '25 30 Year T-Bond is Lower by 17 ticks and trading at 116.29.

Indices: The Dec '25 S&P 500 emini ES contract is 186 ticks Lower and trading at 6813.50.

Gold: The Dec'25 Gold contract is trading Up at 4289.30.

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 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 Mixed.   Currently all of Europe is trading Mixed as well.

Possible challenges to traders                                              

• Final Manufacturing PMI is out at 9:45 AM EST. Major. 
• ISM Manufacturing PMI is out at 10 AM EST. Major.
• ISM Manufacturing Prices is out at 10 AM 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.

Last Wednesday the ZT dived Lower at around 8:30 AM EST with a number of reports to deal with.   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 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 20 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

Last Wednesday we gave the markets a Neutral or Mixed bias, but the indices veered to the Upside as the Dow climbed 172 points, and the other indices gained ground as well. Today we aren't dealing with a correlated market, and our bias is to the Downside.

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

Commentary

Well, it seems as though the economic news reported didn't dent the markets any as they rose prior to the Thanksgiving holiday.  On Friday we had an abbreviated session, but we don't take that into consideration around a holiday.