Nvidia doesn't torpedo markets

Nick Mastrandrea Market Tea Leaves

USD: Dec '26 is up at 101.665.

Energies: Dec '26 Crude is down at 85.41.

Financials: The Dec '26 30 Year T-Bond is Lower by 6 ticks and trading at 108.11.

Indices: The Dec '26 S&P 500 E-mini ES contract is 36 ticks higher and trading at 7580.25.

Gold: The Dec'26 Gold contract is trading down at 4079.80.

Initial conclusion

This is not a correlated market. The USD is up, and Crude is down, which is normal, but 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 lower, which is correlated. Gold is trading down, which is 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 goes Up the other goes down. Asia traded Higher. Europe is trading Higher.

Possible challenges to traders

NFIB Small Business Index is out at 6 AM EST. Major.
ADP Weekly Employment Change is out at 8:15 AM EST. Major.
CPI m/m is out at 8:30 AM EST. Major.
Core CPI m/m is out at 8:30 AM EST. Major.
FOMC Member Logan Speaks at 10:50 AM EST. Major.
10 Year Bond Auction starts at 1 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.

On Friday the two-year climbed Higher at around 8:45 AM EST with the Job numbers released. 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 8:45 AM EST and the Dow dived Lower 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 20 ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for the ZT is now Dec '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

On Friday we gave the markets a Neutral or Mixed bias as it was Jobs Friday. The Dow lost 237 points, but the other indices traded to the Upside. All-in-all a Neutral or Mixed day as expected. Today our bias is to the Upside. Today our bias is Mixed or Neutral.

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

Commentary

It seems that the recent scandal over Nvidia didn't drive the markets far Lower. Time will tell if this continues.

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

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