We say higher, markets said mixed

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Down at 99.610.

Energies: Sep '26 Crude is Up at 81.81.

Financials: The Sep '26 30 Year T-Bond is Lower by 10 ticks and trading at 109.11.

Indices: The Jun '26 S&P 500 emini ES contract is 25 ticks Higher and trading at 7828.75.

Gold: The Aug'26 Gold contract is trading Down at 4412.60

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Up 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 Higher which is not correlated. Gold is trading Lower which is not 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 Mixed. All of Europe is trading Mixed as well.

Possible challenges to traders

Retail Sales is out at 8:30 AM EST. Major.
Core Retail Sales is out at 8:30 AM EST. Major.
Prelim Consumer Sentiment out at 10 AM EST. Major.
Prelim Inflation Expectations is out at 10 AM EST. Major.
Business Inventories is out at 10 AM 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 ZT climbed Higher at around 8:30 AM EST after the Unemployment numbers were released. 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 High 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

ZT -Sep 26 - 8/13/26

Dow - Sep 2026- 8/13/26

Bias

Yesterday we gave the markets an Upside bias however the markets had other ideas as the Dow fell by 67 points, but the other indices gained ground on the session. Today our bias is Mixed or Neutral.

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

Commentary

Want to learn Market Correlation and determine market direction hours before the Opening Bell?

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.

GBP/USD advances above 1.3500 as easing Fed hike bets down USD

GBP/USD extends the advance above 1.3500 in the European trading hours on Friday. The US Dollar drops against the British Pound as cooler-than-expected US consumer and producer inflation data have limited the Fed's room for further interest rate hikes. Traders will keep an eye on the US July Retail Sales report and the Consumer Sentiment data later this Friday.

EUR/USD climbs above 1.1550 as US Dollar slips ahead of data

EUR/USD gains traction in the European session on Friday and trades in positive territory above 1.1550. The pair capitalizes on renewed US Dollar weakness, as doubts over a September Fed rate hike offset lingering Middle East concerns. The US Retail Sales and UoM Consumer Sentiment data are in focus later in the day. Meanwhile, the data from the Eurozone showed that the Gross Domestic Product (GDP) expanded at an annual rate of 1% in the second quarter, as expected.

Gold sticks to losses but holds above $4,300 as reduced Fed hike bets weigh on USD

Gold recovers slightly from the $4,300 neighborhood heading into the European session, though it remains in negative territory for the second straight day. Moreover, a mixed fundamental backdrop warrants some caution before positioning for an extension of the retracement slide from $4,450, or the highest since June 5, set the previous day.

Bitcoin SV hits three-month high, eyeing 200-day EMA breakout

Bitcoin SV is up nearly 2% extending a steady upward trend over the last two weeks. Retail strength builds in BSV amid multiple vulnerabilities found in the Bitcoin ecosystem. Bitcoin SV’s technical outlook is bullish as the price tests an upside breakout above the 200-day Exponential Moving Average at $15.39.

UoM Consumer Sentiment Index set to ease as inflation, labour market worries loom

The University of Michigan will release the preliminary estimate of August’s Consumer Sentiment Index on Friday. US consumers’ confidence is expected to have ticked down to 54.5 in August from 55.2 in July, as measured by the UoM Consumer Sentiment Index.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.