A suggested markets take a U turn

USD: Jun '25 is Down at 103.745.  

Energies: May '25 Crude is Up at 69.50.

Financials: The Jun '25 30 Year T-Bond is Lower by 16 ticks and trading at 115.29.

Indices: The Jun '25 S&P 500 emini ES contract is 20 ticks Higher and trading at 5820.00.

Gold: The Apr'25 Gold contract is trading Up at 3029.90.

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 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 Up which is not 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 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. All of Asia traded Mixed.  All of Europe is trading Higher.

Possible challenges to traders

• FOMC Member Kugler Speaks at 8:40 AM EST.  This is Major.

• S&P/CS Composite-20 HPI y/y is out at 9 AM EST.  This is Major.

• HPI m/m is out at 9 AM EST.  This is Major.

• FOMC Member Williams Speaks at 9:05 AM EST.  This is Major.

• CB Consumer Confidence is out at 10 AM EST.  This is Major.

• New Home Sales is out at 10 AM EST.  This is Major.

• Richmond Manufacturing Index is out at 10 AM 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 veered Lower at around 7 AM EST with no economic news pending at that time.  The Dow moved Higher at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Higher at 7 AM EST and the ZT moved 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 Short 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 ZT is now Jun '25 and the Dow is Jun '25 as well.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of barcharts

ZT -Jun 2025 - 3/24/25

Dow - Mar 2025- 3/24/25

Bias

Yesterday we gave the markets an Upside bias as both the USD and the Bonds were trading Lower Monday morning and that usually represents an Up Day.  The markets didn't disappoint as all major indices closed Higher on Monday.  The Dow gained 598 points and the other indices gained ground as well.  Today we aren't dealing with a correlated market, and our bias is Neutral or Mixed.

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

Commentary

Well, it appears as though the markets finally decided to move forward and gain ground on Monday.  The Dow closed Higher by 598 points and the other indices gained by triple digits as well.