Veterans Day

Nick Mastrandrea Market Tea Leaves

USD: Dec '26 is Up at 102.835.

Energies: Dec '26 Crude is Down at 86.07.

Financials: The Dec '26 30 Year T-Bond is Higher by 1 tick and trading at 107.03

Indices: The Dec '26 S&P 500 emini ES contract is 112 ticks Lower and trading at 7612.00

Gold: The Dec'26 Gold contract is trading Down at 3950.90.

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 Lower and Crude is trading Lower which is not correlated. Gold is trading Down 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 goes Up the other goes Down. Asia traded Higher. Europe is trading Higher.

Possible challenges to traders

Unemployment Claims is out at 8:30 AM EST. Major.
FOMC Member Hammack Speaks at 8:30 AM EST. Major.
Existing Home Sales is out at 10 AM EST. Major.
FOMC Member Barr Speaks at 10 AM EST. Major.
FOMC Member Goolsbee Speaks at 11:15 AM EST. Major.
Crude Oil inventories is out at 12 noon. Major.
30 Year Bond Auction starts at 1 PM EST. Major.
FOMC Members Daly and Scmidt Speak at 1:30 PM EST. Major.
Federal Budget Balance is out at 2PM 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 two-year climbed Higher at around 8 AM EST with no news pending. 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 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 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 - 11/11/26

Dow - Dec 2026- 11/11/26

Bias

Yesterday we gave the markets an Upside bias. The Dow climbed Higher by 255 points. The other indices traded Higher as well. Today our bias is to the Downside.

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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