Markets strike back

USD: Jun '25 is Down at 99.245.  

Energies: May '25 Crude is Up at 62.16.

Financials: The Jun '25 30 Year T-Bond is Higher by 12 ticks and trading at 113.18.

Indices: The Jun '25 S&P 500 emini ES contract is 284 ticks Higher and trading at 5461.00.

Gold: The Jun'25 Gold contract is trading Down at 3229.20.

Initial conclusion

This is not a correlated market.  The USD is Down and Crude is Up which is normal, but 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 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 Mixed.  All of Europe is trading Higher.

Possible challenges to traders

• FOMC Member Barkin Speaks at 12 noon EST.  This is Major.
• FOMC Member Waller Speaks 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.

On Friday the ZT dived Lower at around 8:30 AM EST with PPI numbers waiting in the wings.  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 8:30 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 30 plus 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 bar charts 

ZT -Jun 2025 - 4/11/25

Dow - Mar 2025- 4/11/25

Bias

Yesterday we gave the markets an Upside bias and the markets didn't disappoint as the USD was trading Lower Friday morning.  The Dow gained 620 points on the session and the other indices closed Higher as well.  Today we aren't dealing with a correlated market and our bias is to the Upside.

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

Commentary

On Friday we're seeing the situation of one day down, next day up or vice versa.  Thats okay as long as it works but from our perspective, we will continue to do our homework and analyze the markets on a day-by-day basis.  On Friday we did so, and our analysis said the markets would go Higher on the day and it did.  We take nothing for granted and we don't assume the markets will do something without first analyzing the situation.