What goes up

USD: Dec '25 is Up at 98.085.  

Energies: Jan '26 Crude is Up at 59.16.

Financials: The Mar '26 30 Year T-Bond is Higher by 6 ticks and trading at 115.09.

Indices: The Dec '25 S&P 500 emini ES contract is 17 ticks Higher and trading at 6860.00.

Gold: The Feb'26 Gold contract is trading Up at 4231.30.

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 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 Higher 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 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. Asia traded Lower except Shanghai.   Currently Europe is trading Higher except the Paris and Spanish Ibex exchanges.

Possible challenges to traders                                              

• NFIB Small Business Index is out at 6 AM EST. This is Major.
• ADP Weekly Employment Change is tentative. This is Major.
• Sept Jolts Job Openings is out at 10 AM EST. This is Major.
• Jolts Job Openings is out at 10 AM EST. This is Major.
• CB Leading Index is out at 10 AM EST. This is Major.
• 10 Year Bond Auction starts at 1 PM EST. This is Major.                                                                

Traders, please note that we've changed the Bond instrument from the 10 Year (ZN) to the 2 Year (ZT).  They work exactly the same.

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 9:30 AM EST with no major 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 9:30 AM EST and the Dow dived Lower at 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 20 plus ticks per contract on this trade.  Each tick is worth $6.25.  Please note: the front month for ZT is now Mar '26 and the Dow is now Mar '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 -Mar 26 - 12/08/25

Dow - Dec 2025- 12/08/25

Bias

Yesterday we gave the markets an Upside bias, but the markets had other ideas.  The Dow dropped Lower by 216 points, and the other indices lost ground as well.  Today we aren't dealing with a correlated market, and our bias is Mixed or Neutral.

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

Commentary

Yesterday we had much anticipation the markets would continue its upward climb.  However, it became apparent that this would not be the case as the markets closed Lower.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?