The day after

USD: Sept '25 is Up at 99.700.  

Energies: Aug '25 Crude is Down at 69.68.

Financials: The Sep '25 30 Year T-Bond is Higher by 14 ticks and trading at 114.10.

Indices: The Sep '25 S&P 500 emini ES contract is 250 ticks Higher and trading at 6460.00.

Gold: The Aug'25 Gold contract is trading Up at 3354.70.

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Down 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 Lower which is 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 mainly Lower except the Shanghai.  Currently all Europe is trading Mixed.

Possible challenges to traders

• Challenger Job Cuts is out at 7:30 AM EST.  This is Major.

• Core PCE Price Index m/m is out at 8:30 AM EST.  This is Major.

• Employment Cost Index q/q out at 8:30 AM EST.  This is Major.

• Unemployment Claims is out at 8:30 AM EST.  This is Major.

• Personal Income is out at 8:30 AM EST.  This is Major.

• Personal Spending is out at 8:30 AM EST.  This is Major.

• Chicago PMI is out at 9:45 AM EST.  This is Major.

• Natural Gas Storage is out at 10:30 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 GDP news pending.  The Dow climbed Higher at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow climbed Higher at 8:30 AM EST and the ZT 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 a 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 now Sep '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 - 7/30/25

Dow - Sep 2025- 7/30/25

Bias

Yesterday we gave the markets a Neutral or Mixed bias and the markets didn't disappoint as the Dow closed Lower by 172 points, the S&P by 8 but the Nasdaq gained 31 on the session.  All-in-all a Mixed or Neutral day.  Today we aren't dealing with a correlated market and our bias is Neutral or Mixed.

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

Commentary

Yesterday we predicted that the Fed would not Lower rates and they didn't.  Clearly El Presidente didn't like that, but he doesn't understand how the Federal Reserve works.  The Fed will lower rates when it is clear that the economy is doing poorly or not as well as it can.  When Trump said that Fed Chair Powell told him that the economy was strong, that should have been a signal that they aren't going to lower.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?