This is not a correlated market. The USD is Up and Crude is Up which is not 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 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 with half the exchanges Higher and the other half Lower. Currently all of Europe is trading Higher.

Possible challenges to Traders

FOMC Member Barkin Speaks at 9:30 AM EST. This is Major.
Crude Oil Inventories is out at 10:30 AM EST. This is Major.
FOMC Member Schmid Speaks at 11 AM EST. This is Major.
FOMC Member Musalem Speaks at 1:20 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.

Yesterday the ZT climbed Higher at around 8 AM EST with an FOMC Member speaking. 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 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 Long opportunity on the 2-year note, as a trader you could have netted about a dozen 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 - 2/24/26

Dow - Mar 2026- 2/24/26

Bias

Yesterday we gave the markets a Mixed or Neutral bias which means the markets could go anywhere in any direction. The markets veered to the Upside as the Dow leapt Higher by 366 points and the other indices closed 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

Last evening, we had the State of the Union address, and it was interesting to hear what the president said. No doubt he'll be talking about familiar subjects like the evil Democrats, how the election was stolen in 2020 and of course how dare the Supreme take away his ability to levy a tariff. He will use other laws and acts to further the same ambition and in fact has raised the global tariff to 10 -15%. Anyone who watch the SOTU address knows our prediction was true, enough said. Want to learn Market Correlation and determine market direction hours before the Opening Bell?

Author

Nick Mastrandrea

Market Tea Leaves

EUR/USD sticks to positive bias above 1.1800 as trade jitters undermine USD

The EUR/USD pair builds on the previous day's modest gains and attracts some buyers for the second straight day on Thursday amid a softer US Dollar. Spot prices, however, lack bullish conviction and trade around the 1.1815-1.1820 area during the Asian session, up 0.10% for the day.

GBP/USD bounces as soft CPI boosts BoE cut bets

GBP/USD rose 0.42% on Wednesday, recovering toward 1.3600 in a session shaped by softer-than-expected UK inflation data and broad US Dollar weakness. The pair had been consolidating in a tight range between about 1.3450 and 1.3520 for the past few days following the sharp pullback from the late-January high near 1.3870, and Wednesday's move pushed price action back onto the high side of key moving averages.

Gold retains positive bias amid sustained safe-haven demand, softer USD

Gold attracts some buyers for the second straight day as trade jitters and geopolitical tensions ahead of the US-Iran nuclear talks underpin demand for safe-haven assets. Apart from this, a softer US Dollar further supports the bullion, though the underlying bullish sentiment could cap gains. Bulls might also opt to wait for acceptance above the $5,200 mark before positioning for any meaningful appreciating move.

AUD/USD rises toward three-year highs on RBA rate hike bets

AUD/USD remains stronger for the third successive session, trading around 0.7120 during the Asian hours on Thursday. The pair advances toward its three-year high of 0.7147, last touched on February 12, as the Australian Dollar strengthens following hotter-than-expected inflation data from Australia, reinforcing expectations of further interest rate hikes by the Reserve Bank of Australia this year.

Nvidia delivers another monster earnings report, and forecasts big things to come

It was another monster earnings report from Nvidia for fiscal Q4. Revenues were $68.1bn, smashing estimates of $65bn. Gross profit margin was a healthy 75%, up from 73.5% in the prior quarter, and the outlook for this quarter was monstrous.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.