Santa Claus keeps rolling

USD: Mar '26 is Down at 97.530.  

Energies: Feb '26 Crude is Up at 58.12.

Financials: The Mar '26 30 Year T-Bond is Higher by 11 ticks and trading at 115.16.

Indices: The Mar '26 S&P 500 emini ES contract is 12 ticks Lower and trading at 6927.25

Gold: The Feb'26 Gold contract is trading Up at 4519.20.

Initial conclusion

This is not a correlated market.  The USD is Down and Crude is Up which is normal, but the 30 Year T-Bond is trading Higher.  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. All of Asia traded Higher.  Currently Europe is trading Mixed.

Possible challenges to traders                                              

• ADP Weekly Employment Changes is tentative. This is Major.
• Prelim GDP is out at 8:30 AM EST. This is Major.   
• Core Durable Goods Orders is out at 8:30 AM EST. This is Major.
• Durable Goods Orders is out at 8:30 AM EST. This is Major.
• Prelim GDP Price Index q/q is out at 8:30 AM EST.  This is Major.
• Capacity Utilization Rate - Oct. Data This is Major.
• Industrial Production - Oct. Data This is Major.
• Capacity Utilization Rate is out at 9:15 AM EST. This is Major.
• Industrial Production is out at 9:15 AM EST. This is Major.
• CB Consumer Confidence is out at 10 AM EST. This is Major.
• Richmond Mfg. Index 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 dived Lower at around 8:30 AM EST with no news pending at that time.   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 climbed Higher at around 8:30 AM EST and the Dow dived Lower 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 the ZT and YM are both Mar '26.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of BarCharts

ZT -Mar 26 - 12/22/25

Dow - Dec 2025- 12/22/25

Bias

Yesterday we gave the markets an Upside bias and the markets didn't disappoint.  The Dow closed 183 points Higher, and the other indices traded Higher as well.  Our bias is Neutral or Mixed.

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

Commentary

This time of year, we often talk about a Santa Claus rally and this year is no exception to that rule.  The market keeps on wanting to better its best.  Will it slow down?  Only time will tell.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?