Who won the debate? [Video]

US Dollar: Dec '20 USD Down at 93.913.

Energies: Nov'20 Crude is Down at 40.90.

Financials: The Dec '20 30 year bond is Down 16 ticks and trading at 175.25.

Indices: The Dec S&P 500 emini ES contract is 98 ticks Higher and trading at 3376.50.

Gold: The Dec'20 Gold contract is trading Up at 1899.30  Gold is 38 ticks Higher than its close.

Initial Conclusion

This is not a correlated market.  The dollar is Down- and Crude is Down- which is not normal and 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 Higher and Crude is trading Lower which is 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.

Asia is trading mainly Higher with the Shanghai and Nikkei exchanges trading Lower.  Currently all of Europe is trading Higher.

Possible Challenges To Traders Today

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

• Core PCE Price Index  is out at 8:30 AM EST.  Major.

• Personal Spending m/m is out at 8:30 AM EST.  Major.

• Personal Income m/m is out at 8:30 AM EST.  Major.

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

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

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

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

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

• Wards Total Vehicle Sales - All Day By Brand

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

• FOMC Member Williams Speaks at 11 AM EST.  Major.

• FOMC Member Bowman Speaks at 3 PM EST.  Major

Treasuries

Traders please note that we've changed the Bond instrument from the 30 year (ZB) to the 10 year (ZN).  They work exactly the same.  We are having technical difficulties bringing up the 30 hence the 10 year product.

We've elected to switch gears a bit and show correlation between the 10 year bond (ZN) and The S&P futures contract.  The S&P contract is the Standard and Poor's and the purpose is to show reverse correlation between the two instruments.  Remember it's liken to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the ZN made it's move at around 7:30 AM EST.  The ZN hit a High at around that time and the S&P moved Higher.  If you look at the charts below ZN gave a signal at around 7:30 AM EST and the S&P moved Higher at around the same time.  Look at the charts below and you'll see a pattern for both assets. ZN hit a High at around 7:30 AM EST and the S&P was moving Higher shortly thereafter.  These charts represent the newest version of MultiCharts and I've changed the timeframe to a 15 minute chart to display better.  This represented a Shorting opportunity on the 10 year bond, as a trader you could have netted 20 plus ticks per contract on this trade.  Each tick is worth $15.625.  Please note: the front month for the ZN is now Dec '20.  The S&P contract is also Dec '20 as well.  I've changed the format to Renko bars such that it may be more apparent and visible.  

Charts Courtesy of MultiCharts built on an AMP platform

ZN - Dec 2020 - 9/30/20

S&P - Dec 2020 - 9/30/20

Bias

Yesterday we gave the markets a Downside bias as we didn't see much evidence in terms of correlation.  The markets however had other ideas as the Dow advanced 329 points and the other indices gained ground 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

So Tuesday evening we witnessed the first of three presidential debates and just about all the news media covering the event came to the same conclusion namely that is was the worst presidential debate since those debates started in 1960 with Kennedy versus Nixon.  Joe Biden appeared very composed as though he knew what Trump would do.  Trump as predicted played the schoolyard bully to a tee.  The president did nothing but interrupt, be rude (not only to Joe Biden but also the moderator Chris Wallace).  Joe Biden did get angry and interrupt on occasion but it was few and far between.  The global markets traded mainly lower, especially Europe which traded complely to the downside.  Our take is when the Smart Money saw the global markets drop they went the opposite direction.  Ironically following Market Correlation rules.