Veterans Day

Nick Mastrandrea Market Tea Leaves

USD: Dec '26 is Up at 102.400.

Energies: Dec '26 Crude is Up at 86.68.

Financials: The Dec '26 30 Year T-Bond is Lower by 5 ticks and trading at 107.02

Indices: The Dec '26 S&P 500 emini ES contract is 252 ticks Higher and trading at 7607.00

Gold: The Dec'26 Gold contract is trading Up at 4063.50.

Initial conclusion

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 Up 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 Higher. Europe is trading Higher.

Possible challenges to traders

Bank Holiday - all day. 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 two-year dived Lower at around 8:30 AM EST with no news pending. 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 dived Lower at around 8:30 AM EST and the Dow climbed Higher 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 20 plus ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for the ZT is now Dec '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 -Dec 26 - 11/10/26

Dow - Dec 2026- 11/10/26

Bias

Yesterday we gave the markets a Neutral or Mixed bias. The Dow climbed Higher by 1,104 points. The other indices traded Higher as well. Today our bias is to the Upside.

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

Commentary

It seems that the recent scandal over Nvidia didn't drive the markets far Lower. Time will tell if this continues. Ready to use Market Correlation to make you a better trader?

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

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