Markets up slightly

USD: Jun '25 is Up at 103.920.  

Energies: May '25 Crude is Up at 69.59.

Financials: The Jun '25 30 Year T-Bond is Lower by 13 ticks and trading at 116.06.

Indices: The Jun '25 S&P 500 emini ES contract is 8 ticks Lower and trading at 5824.50.

Gold: The Apr'25 Gold contract is trading Up at 3031.60.

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Up 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 Lower and Crude is trading Up which is 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. All of Asia traded Mixed.  All of Europe is trading Lower with the exception of the London exchange which is Higher.

Possible challenges to traders

• Core Durable Goods is out at 8:30 AM EST.  This is Major.

• Durable Goods is out at 8:30 AM EST.  This is Major.

• FOMC Member Kashkari Speaks at 10 AM EST.  This is Major.

• Crude Oil Inventories is out at 10:30 AM EST.  This is Major.

• FOMC Member Musalem Speaks at 1:10 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 veered Higher at around 7 AM EST with no economic news pending at that time. The Dow moved Lower at the same time. Look at the charts below and you'll see a pattern for both assets. The Dow moved Lower at 7 AM EST and the ZT moved Higher 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 a dozen 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 barcharts

ZT -Jun 2025 - 3/25/25

Dow - Mar 2025- 3/25/25

Bias

Yesterday we gave the markets a Neutral or Mixed bias as we didn't see much in the way of correlation Tuesday morning. The markets closed Higher fractionally. The Dow closed Higher by 4 points and the other indices managed a Higher close but again, fractionally. Today we aren't dealing with a correlated market, and our bias will remain Neutral or Mixed.

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

Commentary

Yesterday the airwaves was consumed by a report that the new Secretary of Defense put a reporter on a chat that mentioned war plans on terrorists in the Mid East. Despite this the markets still managed to Eck out a gain.