US Dollar: Dec '20 USD Up at 92.715.
Energies: Apr'21 Crude is Up at 60.19.
Financials: The June '21 30 year bond is Up 6 ticks and trading at 155.25.
Indices: The Mar'21 S&P 500 emini ES contract is 36 ticks Lower and trading at 4058.75.
Gold: The June'21 Gold contract is trading Up at 1731.90. Gold is 31 ticks Higher than its close.
Initial Conclusion
This is not a correlated market. The dollar is Up+ and Crude is Up+ which is not normal and the 30 year Bond is trading Higher. The Financials should always correlate with the US dollar such that if the dollar is lower then 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 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 is trading Mixed at the present time. Currently all of Europe is trading Higher.
Possible challenges to traders Today
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JOLTS Job Openings is out at 10 AM EST. This is Major.
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IBD/TIPP Economic Optimism - tentative. This is Major.
Bias
Yesterday we gave the markets a Neutral bias as we didn't see much evidence for market correlation yesterday morning. The markets however had other ideas as the Dow soared by 374 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
Yesterday we suggested that the markets moved Higher due to good job numbers reported on Friday even though the markets themselves were closed. Apparently that transmitted into yesterday's session as the markets reopened after the Easter Holiday. The Dow gained 374 points and closed at 33,527. The other indices gained ground as well. Today we have the Jolts Job Openings which is major and will dovetail nicely considering Friday's positive reports.
Trading performance displayed herein is hypothetical. The following Commodity Futures Trading Commission (CFTC) disclaimer should be noted.
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight.
In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.
There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
Trading in the commodities markets involves substantial risk and YOU CAN LOSE A LOT OF MONEY, and thus is not appropriate for everyone. You should carefully consider your financial condition before trading in these markets, and only risk capital should be used.
In addition, these markets are often liquid, making it difficult to execute orders at desired prices. Also, during periods of extreme volatility, trading in these markets may be halted due to so-called “circuit breakers” put in place by the CME to alleviate such volatility. In the event of a trading halt, it may be difficult or impossible to exit a losing position.
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