News tsunami doesn't deter markets

USD: Sept '25 is Down at 98.025.  

Energies: Aug '25 Crude is Up at 66.91.

Financials: The Sep '25 30 Year T-Bond is Lower by 13 ticks and trading at 112.17.

Indices: The Sep '25 S&P 500 emini ES contract is 8 ticks Higher and trading at 6342.50.

Gold: The Aug'25 Gold contract is trading Up at 3363.20.

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 Higher and Crude is trading Higher which is not 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.  All of Europe is trading Mixed as well.

Possible challenges to traders

• Building Permits are out at 8:30 AM EST.  This is Major.
• Housing Starts are out at 8:30 AM EST.  This is Major.
• Prelim UOM Consumer Sentiment is out at 10 AM EST.  This is Major.
• Prelim UOM Inflation Expectations is out at 10 AM 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 various reports pending.  The Dow dived Lower at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow dived Lower at 8:30 AM EST and the ZT 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 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 ZT is now Sep '25 and the Dow is now Sep '25.  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 25 - 7/17/25

Dow - Sep 2025- 7/17/25

Bias

Yesterday we gave the markets a Neutral or Mixed bias, but the markets had other ideas and climbed Higher. The Dow gained 117 points, and the other indices climbed Higher 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

A word on inflation.  I find it interesting that companies that have no bearing in either raw material, components or finished products have decided to raise their rates and then use the excuse of "inflation" when the so-called inflation doesn't affect them at all. I'm referring to insurance companies who have raised their rates and then use "inflation" as the culprit.  An insurance company that doesn't make anything or buy raw materials overseas but decides that inflation is a good enough reason to raise rates. And this is without the tariffs becoming effective. Make no mistake about it, this is blatant greed front and center.