Up, down and all around

USD: Jun '25 is Up at 99.360.  

Energies: Jun '25 Crude is Down at 62.66.

Financials: The Jun '25 30 Year T-Bond is Higher by 2 ticks and trading at 115.28.

Indices: The Jun '25 S&P 500 emini ES contract is 48 ticks Lower and trading at 5536.00.

Gold: The Jun'25 Gold contract is trading Up at 3299.90

Initial conclusion

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

Possible challenges to traders

• No Major Economic News to speak of.

• Lack of Major Economic News.

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 fell Lower at around 7 AM EST with no economic news in sight.  The Dow climbed 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 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 20 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 - 4/25/25

Dow - Mar 2025- 4/25/25

Bias

On Friday we gave the markets a Mixed bias, but the markets had other ideas.  The Dow gained 20 points on the session and the other indices gained ground as well.  Today we aren't dealing with a correlated market, and our bias is to the Downside.

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

Commentary

So, Friday we suggested a Downside bias and initially the markets fell.  The Dow remained in negative territory until the afternoon and then reverted to the Upside although it didn't make drastic leaps and bounds.  The Dow gained 20 points on the session.  Want to learn Market Correlation and determine market direction hours before the Opening Bell?