Upside bias equals upside day again

US Dollar: Jun '23 USD is Up at 102.075

Energies: May '23 Crude is Up at 74.61.

Financials: The Jun '23 30 Year T-Bond is Down 8 ticks and trading at 129.29.

Indices: The Jun '23 S&P 500 Emini ES contract is 24 ticks Higher and trading at 4086.00.

Gold: The Apr'23 Gold contract is trading Down at 1995.70. Gold is 20 ticks Lower than its close.

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 Lower which is 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. At the present time Asia is trading Higher. Currently all of Europe is trading Higher as well. .

Possible challenges to traders today

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

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

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

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

• Revised UoM Consumer Sentiment is out at 10 AM EST. This is not Major.

• Revised UoM Inflation Expectations is out at 10 AM EST. This is not Major.

• FOMC Member Williams Speaks at 3:05 PM EST. This is not Major FOMC

• Member Cook Speaks at 5:45 PM EST. This is not Major.

• FOMC Member Waller Speaks at 10 PM EST. This is not Major.

Treasuries

Traders, please note that we've changed the Bond instrument from the 30 year (ZB) to the 10 year (ZN). They work exactly the same.

We've elected to switch gears a bit and show correlation between the 10-year bond (ZN) and the S&P futures contract. The S&P contract is the Standard and Poor's, 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 ZN hit a Low at around 8:45 AM EST but at the same time the S&P hit a High. If you look at the charts below the ZN gave a signal at around 8:45 AM and the ZN continued its Upward trend. Look at the charts below and you'll see a pattern for both assets. S&P hit a High at around 8:45 AM and migrated Lower. These charts represent the newest version of MultiCharts and I've changed the timeframe to a 15-minute chart to display better. This represented a Long opportunity on the 10-year note, as a trader you could have netted about 20 plus ticks per contract on this trade. Each tick is worth $15.625. Please note: the front month for the ZN is now Jun '23. The S&P contract is also Jun' 23. I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of MultiCharts built on an AMP platform

ZN - Jun 2023 - 3/30/23

S&P - Jun 2023 - 3/30/23

Bias

Yesterday we gave the markets an Upside bias. Both the USD and the Bonds were trading Lower and that usually reflects an Upside Day. The markets didn't disappoint as the Dow traded Higher by 141 points and the other indices traded Higher as well. 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

Well, yesterday we gave the markets an Upside bias as the USD and Bonds were both trading Lower and this usually reflects an Upside Day. The markets didn't disappoint as the Dow traded 141 points Higher and the other indices traded Higher as well. Today we have Personal Income and Personal Spending, both of which are Major so perhaps the upward trend will continue.