Eco news boosts markets, again [Video]

US Dollar: Sept '21 USD is Up at 92.495.

Energies: Jul '21 Crude is Up at 74.27.

Financials: The Sept '21 30 Year bond is Down 24 ticks and trading at 160.00.

Indices: The Sept '21 S&P 500 emini ES contract is 28 ticks Lower and trading at 4296.00.

Gold: The Aug'21 Gold contract is trading Up at 1774.90. Gold is 29 ticks Higher than its close.

Initial conclusion

This is not a correlated market. The dollar is Up+ and Crude is Up+ which is not normal but the 30 year Bond is trading Lower. The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice-versa. The S&P is Lower and Crude is trading Higher 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 is trading Lower. Conversely all of Europe is trading Higher.

Possible challenges to traders today

• Challenger Job Cuts y/y is out at 7:30 AM EST. This is Major.

• Unemployment Claims is out at 8:30 AM EST. This is Major.

• Final Manufacturing PMI is out at 9:45 AM EST. This is Major.

• ISM Manufacturing PMI is out at 10 AM EST. This is Major.

• Construction Spending m/m is out at 10 AM EST. This is Major.

• ISM Manufacturing Prices is out at 10 AM EST. This is Major.

• Wards Total Vehicle Sales - All Day. This is Major.

• Natural Gas Storage is out at 10:30 AM EST. This is Major.

Bias

Yesterday we gave the markets a Downside as both the USD and the Bonds were trading Higher Thursday morning and that is usually indicative of a Downside day. The markets had other ideas as the Dow closed Higher by 210 points, the S&P was Higher by 6 and the Nasdaq traded Lower by 24. Today we aren't dealing with a correlated market and our bias is Neutral.

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

Commentary

Each and every day we say that the markets could change and they often do. Yesterday was no exception as the markets were correlated Lower but the economic news reported came in mainly positive and served to drive the markets Higher. ADP Employment Change came in at 692,000 versus 555,000 expected. Pending Home Sales came in much higher than the previous period at 8.0% versus a minus 4.4% reported last month. Today we have about 8 major economic reports that could serve to drive market direction today. Such reports as Total Vehicle Sales, Unemployment Claims, Construction Spending are all major and proven market movers. But as in all things only time will tell...