We may be heading for the scenario of one day up, next day not

USD: Sep '26 is Down at 98.530.  

Energies: Sep '26 Crude is Down at 86.77.

Financials: The Sep '26 30 Year T-Bond is Lower by 2 ticks and trading at 109.13.

Indices: The Sep '26 S&P 500 emini ES contract is 100 ticks Higher and trading at 7685.50.

Gold: The Aug'26 Gold contract is trading Up at 4645.80.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Down 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 Lower which is correlated. Gold is trading Higher which is correlated with the US dollar trading Down.  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 with the exception of the Nikkei exchange.   All of Europe is trading Higher.  

Possible challenges to traders

• Flash MFG PMI is out at 9:45 AM EST.   Major.
• Flash Services PMI is out at 9:45 EST.    Major.
• Lack of major economic news.

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 leapt Higher at around 8:30 AM EST with Unemployment Claims 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 8:30 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 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 Mixed or Neutral bias, but the markets had other ideas.  The Dow closed Lower by 704 points and the other indices closed Lower as well.  Today our bias is to the Upside.

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

Commentary

Well yesterday we had a reversal from Wednesday's upswing.  It appears that we may be heading for the scenario of one day up, next day not.   Hormuz is closed with no scheduled talks.