Straits talk opens markets

USD: Sep '26 is Down at 99.705.  

Energies: Sep '26 Crude is Up at 81.92.

Financials: The Sep '26 30 Year T-Bond is Higher by 9 ticks and trading at 110.04.

Indices: The Jun '26 S&P 500 emini ES contract is 120 ticks Higher and trading at 7798.00.

Gold: The Aug'26 Gold contract is trading Up at 4105.00.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Up which is normal, and 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 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 goes Up the other goes Down. Asia traded Mixed.  All of Europe is trading Higher.  

Possible challenges to traders                                                                                          

• ADP Non-Farm Employment Change is out at 8:15 AM EST.    Major.
• Final Services PMI is out at 9:45 AM EST.    Major.
• ISM Services PMI is out at 10 AM EST.      Major.
• Crude Oil Inventories is out at 10:30 AM 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.

Yesterday the ZT climbed Higher at around 7:40 AM EST with no real news to speak of.   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 7:40 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 plus ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for the ZT is now Sep '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

Yesterday we gave the markets a Neutral or Mixed bias, but the Dow veered Higher by 907 points, and the other indices gained ground as well.  Today our bias is Mixed or Neutral.

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

Commentary

Yesterday the markets veered Higher based upon the news that Qatar and the US have agreed to open the Straits of Hormuz, but I wonder has anyone mentioned this to Iran?