Quadruple witching doesn't help much

USD: Sept '25 is Up at 98.930.  

Energies: Aug '25 Crude is Up at 74.72.

Financials: The Sep '25 30 Year T-Bond is Lower by 8 ticks and trading at 113.17.

Indices: The Jun '25 S&P 500 emini ES contract is 4 ticks Higher and trading at 6019.00.

Gold: The Aug'25 Gold contract is trading Up at 3386.50.

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Up which is not 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 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 traded mixed. All of Europe is trading Lower.

Possible challenges to traders

• Flash Manufacturing PMI is out at 9:45 AM EST.  This is Major.
• Flash Services PMI is out at 9:45 AM EST.  This is Major.
• Existing Home Sales is out at 10 AM EST.  This is Major.
• FOMC Member Bowman Speaks at 10 AM EST.  This is Major.
• FOMC Member Goolsbee Speaks at 1:10 PM EST.  This is Major.
• FOMC Member Kugler Speaks at 2:30 PM EST.  This is Major.
• FOMC Member Williams Speaks at 2:30 PM 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.

On day the ZT climbed Higher at around 8:30 AM EST with no news 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 20 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 still Jun '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 - 6/20/25

Dow - Jun 2025- 6/20/25

Bias

On Friday we gave the markets a Neutral bias as it was Quadruple Witching Friday and the markets were all over the place, but at the end of the day the indices closed Mixed as suggested.  The Dow gained 46 points but the S&P and Nasdaq both lost ground.  Today we aren't dealing with a correlated market and our bias is Mixed or Neutral.

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

Commentary

Well, if anyone thought that options expiration would help the markets gain ground, they were in for a rude awakening as the Dow gained but the other indices didn't.