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Ten Year Notes (ZN) May Find Support SoonShort term Elliott Wave view in Ten Year Notes (ZN) suggests that cycle from 3.24.2023 high is in progress as an expanded flat. Down from 3.24.2023 high, wave ((A)) ended at 113’3 and wave ((B)) ended at 117 as the 45 minutes chart below shows. The Notes then extends lower in wave ((C)). Internal subdivision of wave ((C)) is unfolding as a 5 waves impulse Elliott Wave structure. Down from wave ((B)), wave 1 ended at 116’09 and wave 2 ended at 116’12. The Notes extends lower in wave 3 towards 115’13, and wave 4 rally ended at 115’29. Final leg wave 5 ended at 115’01 which completed wave (1). The Notes then corrected in wave (2) which ended at 116’16. Internal subdivision of wave (2) unfolded as a zigzag Elliott Wave structure. Up from wave (1), wave A ended at 115’31 and pullback in wave B ended at 115’24. Wave C higher ended at 116’16 which completed wave (2). The Notes then extends lower in wave (3). Down from wave (2), wave 1 ended at 115’05 and rally in wave 2 ended at 115’18. The Notes then extends lower in wave 3 towards 113’04 and rally in wave 4 ended at 113’25. The Notes should soon end wave 5 of (3), then it should rally in wave (4) to correct cycle from 5.11.2023 high before it resumes lower. Near term, as far as pivot at 117 stays intact, expect rally to fail in 3, 7, or 11 swing for further downside. Potential target lower is 100% – 161.8% Fibonacci extension of wave ((A)). This area comes at 111’31 – 113’28 where buyers can appear for 3 waves rally at least.
CBOT:ZN1!
by Elliottwave-Forecast
SG10Y Govt Bond and SPY relationship Part VI - Bear for EquitiesAs mentioned in previous heads up over the last weeks, it had finally happened (as expected) that the SG10Y GB yield rates break out of trend line resistance. And from previous occurrences, this is a very reliable inverse leading indicator of the SPY (and other related equity indexes); meaning that the SPY should be tanking downwards within the next week or so. Enough said, pattern recognition checked, trend correlation checked, projection based on hypothesis checked... now the rubber hits the road. Not expecting any deviation from the correlation, so is very likely that equities should be tipping over in a bearish slide. HEADS UP!
TVC:SG10Y
by Auguraltrader
US 10Y TREASURY: 4% is far away?The US Treasury yields were under influence of Fed Chair Powell's speech in Washington as well as ongoing negotiations regarding the debt-ceiling. Although Powell did not mention anything new in his speech over a potential monetary move in the future period, still, Lorie Logan, a Dallas Fed President, made a comment as of the end of the previous week, that monetary data are still not justifying the halt in Fed's rate hike. Market reaction was imminent, so the 10Y Treasuries surged by 7 bps to the highest weekly level at 3.72%. Still, yields are finishing the week around short-term support at $3.6%. As long as insecurity in markets holds, and further rate hikes are not clearly communicated with the market, it could be expected for 10Y Treasuries to be elevated. The major resistance line at 3.6% has been breached on Friday. This means that the market will start week ahead by testing this level for some time. On the other hand, news on the debt-ceiling negotiations would certainly have an impact on Treasury yields, which might bring some volatility back on the market. On the opposite side, a clear break of 3.6% resistance has opened a way for a 4% next resistance. It should not be expected for this level to be reached in the week ahead, but in case that Fed continues with rate increases, a 4% might easily become the next target.
TVC:US10Y
by XBTFX
If U.S. Treasuries Default: Market and Bitcoin Implications Authors: SanTi Li, & NaXi Da U.S. Treasury yield, long considered as a risk-free rate (R0) for value computations and future valuations as per materials like the CFA curriculum, bears nearly zero risk in the financial landscape. However, what happens if this supposedly risk-free asset becomes risky? A U.S. Treasury default would have vast ramifications on the global economy and financial markets. Let's analyze the potential impacts on liquidity, the U.S. dollar value, and Bitcoin's value: Liquidity: U.S. Treasuries, globally accepted as secure assets, constitute the cornerstone of the global financial system. A U.S. default could lead to a confidence crisis in U.S. Treasuries, prompting large-scale selling and potentially a liquidity crisis. This crunch could trigger a plunge in asset prices, escalate financial market volatility, and exacerbate the global financial crisis. U.S. Dollar Value: The U.S. dollar remains the world's primary reserve currency. A U.S. Treasury default could erode global confidence in the dollar, depreciating its value. Still, a market panic might trigger asset sell-off, driving the dollar demand up. Simultaneously, investors could seek refuge in other 'safe haven' assets such as gold or other strong currencies, mitigating dollar depreciation to some extent. Bitcoin Value: The secondary market value of Bitcoin is influenced by numerous factors, including market sentiment, consensus, BRC standard popularity, attitudes of governments, regulatory policies, technological developments, and application convenience and degree. If a U.S. default occurs, Bitcoin might respond in two disparate ways: ● Positive Impact: If investors look for non-traditional 'safe haven' assets like gold and silver, and the world requires a new, relaxed reservoir to absorb decompressed funds, Bitcoin's demand and value might increase in the medium to long term. ● Negative Impact: Bitcoin's high volatility and risk could drive investors away during market panic, decreasing its value. Therefore, Bitcoin's reaction would largely depend on market sentiment and investor risk appetite. Implications on the Global Economy and Trade: A U.S. Treasury default could precipitate a global recession, or even a deeper economic crisis. It could also impair the credit of the U.S. dollar, disrupting global trade. Exporters to the U.S. might face diminished orders, while importers of U.S. goods and services might encounter higher prices. Potential Restructuring of the Global Financial System: A U.S. default could lead to a reevaluation of the dollar-based global financial system, potentially allowing other currencies, especially the yuan, to play a more prominent role in the future global financial system. This could also fast-track the global acceptance of digital currencies and blockchain technology. Risk Assets Value Volatility: A U.S. bond default might result in significant volatility in the value of risk assets such as stocks, commodities, cryptocurrencies, and emerging market assets. In theory, three scenarios could lead to a U.S. bond default - debt ceiling issues, government shutdown, and policy errors. However, extreme 'black swan' scenarios such as external shocks and political conflicts could also lead to default. In conclusion, while a U.S. default is highly unlikely, if it occurs, it would have a profound impact on the global financial system. Despite initial potential negativity towards emerging digital industries like blockchain and cryptocurrencies, they may encounter new opportunities in the long run. This would especially be the case if the U.S. dollar's status as a settlement currency is challenged. This could increase demand for Bitcoin and accelerate the transformation of global trade methods. However, it is critical to note that the thoughts expressed above are intended for long-term thinking, discussion, and learning, and should not be construed as investment advice. However, the probability of an event with a similar magnitude happening is not necessarily low. The exact timing and suddenness of such events are difficult to predict, hence the importance of having risk control and defensive mechanisms in place to be prepared for any situation. Twitter: @santili1021
by OuChiBoy
US10Y Still room to rise but be ready to short the top.The U.S. Government Bonds 10YR Yield (US10Y) hit the downside target on our previous signal (see idea below) and is currently rising again: Being above both the 1D MA50 (blue trend-line) and 1D MA200 (orange trend-line), we see the potential of a diverging Channel Down to emerge and establish itself (dotted lines). The completion of a 1D Death Cross, the first since August 25 2021, ensures that the long-term trend remains bearish. As a result, buy the rest of this bullish Lower High leg and be ready to sell again at the top of the original (blue) Channel Down. If the 1D RSI gets rejected on the dashed Lower Highs trend-line, consider the potential of an early top and sell again. Our target for end of July is 3.150%. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10Y
by TradingShot
British bonds smell of fried! Something bad is happening in the state market. bonds of England - these papers have been actively sold over the past month. During this period, the yield on them increased by as much as 1%. Because of this, we see how the market is already beginning to arrive in some kind of stress: the dollar index is growing, other bonds of developed countries are also being sold, because of this stress, gold also gets it, as central banks are forced to sell off reserves in order to support the nat. currencies and the bond market. Something suggests that panic-sells in risky assets may begin on the market very soon. This will hit equities hard and likely hit crypto hard too. Friends, it’s worth tying up with longs for now, and it’s even better to fix them in profit out of harm’s way. Clouds are gathering over risky assets, prepare umbrellas and shorts, a storm is coming!
TVC:GB10YShort
by Dorado_Crypto
Markets Celebrating the Obvious? Day 2S&P 500 INDEX MODEL TRADING PLANS for THU. 05/18 Our stance last couple of weeks has been: "Our models are indicating an initial bias towards an inflection point coming soon. Barring any unexpected bullish development showing up on the horizon, chances are that this could be unwinding to the downside". Looks like potentially arriving at some kind of agreement on debt ceiling and avoiding a potential U.S. default is being masqueraded as that "unexpected bullish development" (which almost everyone expected anyway). Whether this move is going to be the start of the next leg up or to be a classic pump-and-dump remains to be seen. For now, the force appears to be with the bulls, possibly aided by the squeeze of retail, leveraged shorts. Positional Trading Models: Our positional models are flashing a potential bull trap ahead if this morning's move up proves unsustainable. Models indicate going short at the close if today's close is to be below 4147 (activated at 3:59pm). If opened a short, models indicate instituting a hard stop at 4187. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today. Aggressive, Intraday Trading Plans for THU. 05/18: For today, our aggressive intraday models indicate going long on a break above 4187, 4176, 4165, 4155, or 4143 with a 9-point trailing stop, and going short on a break below 4183, 4173, 4151, or 4138 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4161. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:16am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #regionalbanks, #debtceiling
SP:SPX
by TradersAIDotCom
US 10Y TREASURY: a “dead cross”A $31.4 trillion debt ceiling was in the spotlight of the markets during the previous week. The possibility of the US debt default would certainly have large repercussions not only to the US but also would be felt through the rest of the world. As per currently available official data, the estimation is that the US might default on its debt in June or July, the latest, which is labeled by the government as “significant risk”. As for the Fed rate hikes, the majority of investors are of the opinion that the Fed should stop with further rate increases, as it might hurt the economy more than previously estimated. The US 10Y T-notes ended the week at level of 3.463% as investors were digesting the potential outlook of the US economy after recent developments and rate hikes. The University of Michigan report has been released during the previous week, providing expectations on inflation for the next 5 years. The majority of participants in the survey answered 3.2%, which is higher from the 3.0% estimated during the previous month. Current sentiment on US10Y T-notes is neutral, as RSI moves around level of 50. The moving average of 50 days just made a cross with its MA200 counterpart from the upside, forming a so-called “dead cross”. In technical analysis this indicates the high potential for a downside in the future period. However, for the week ahead, charts are pointing to some potential for the 10Y T-notes to reach 3.30%, but would most certainly oscillate around $3.40 during the week.
TVC:US10Y
by XBTFX
Shadow Banking The shadow banking system is something you're probably not familiar with. Until today! the shadow banking system is made up of mainly investment banks i.e. your market whales or market makers, money market funds i.e. like schwab and vanguard, and hedge funds. these financial entities dont give out loans to you or I, but rather trade amongst themselves. which is what is known as the shadow banking system. one of the main functions of the Shadow Banking system is to provide liquidity aka money (which is mostly made up anyways) to the financial system. for example if a whale wants to move a massive amount of money into a position, or what happened to Zimbabwe a while back and give an entire nation a loan at a ridiculous amount of interest they're able to do so, or take a massive position in a promising opportunity and need capital fast! How does this work? How do you ensure that a hedge fund will pay back on their loan? collateral! Usually in the form of government issued bonds and bills. one can trade an equilivent amount of t-bills plus interest for X-amount of dollars to carry out said transaction. example: Hedge fund A wants to take a position shorting the RMBS market. (strictly coincidental) Hedge Fund A is so confident in their analysis they are willing to take a whales position. they need the capital. well like all good risk management practices they have off set their high beta shares with low risk positions. the lowest risk investment you can have is a US Bond or Treasury Bill. So, Investment bank A says okay I can lend you 10 Billion Dollars at a 4% interest rate per day for 3 days, if you default I keep your Bonds. The swap happens. Now, Hedge Fund A has not only to make their money back on the bond trade, but they have to make at least 4.01% to make the trade profitable and they have 3 days to do it. Another way this can be done is Hedge Fund B says I too am going to short the RMBS market but i am going to offer it to all the investment banks and other hedge funds. So they offer it as an investment opportunity. the offering fund takes a small fee and the winnings or losings are dealt accordingly. while this might sound a a little familiar... well it is! names and places have been changed to protect the innocent. The major critique the financial system has with this Shadow Banking is that its not really regulated. becasue going back to our example with Hedge Fund A If Hedge Fund A Doesnt pay then Investment Bank A can shoot their interest rate from 4% to 40% in one day making the loan almost impossible to pay back causing the Hedge Fund to collapse and all the unsuspecting investors in the Hedge Fund are out of pocket. Or my personal favorite. Lets Say Hedge Fund (HFA) A is going to short the RMBS market with a 10 Billion dollar Position for 3 days and Investment Bank A (IBA) wants to short the CMBS market with a $20 billion position for 5 days. well the trade between HFA and IBA happens 10 billion will float to HFA at a 4% interest rate per day for 3 days. Now, IBA wants to short CMBSs they will approach Life Insurance Group A (LIA) and will offer $20 billion dollars in bonds 10 from their reserve and the 10 billion from HFA. at a 5% per day interest rate for 5 days. Now, you might see the problem. but i will continue. Day 3 is up. HFA made their little profit. IBA doesnt have their bonds (because theyre with LIA). So, IBA will probably give HFA 10 billion of their own bonds which for this post is what happens. HFA is squared away with IBA. Now, in the 5 days that IBA is holding LIAs money the fed decided to raise interest rates 200 base points. the bond market yields sky rocket causing their prices to plummet. but fortunately IBA made 10% on their risk they pay LIA their 5% interest and take a 5% loss on their bonds and come out BE or Break even. As you can see in this overly simplified example how if any one part of these parties failed it could be detrimental for a lot of people. Because peoples pensions are held by hedge funds, countries and other governments have their investments with the Investment Bank peoples money and loans are held with the Life Insurance groups. I believe this shadow banking system is also the Stock Markets (yes the entire stock markets) Stop Loss!
NASDAQ:KRX
by ARegularGuy
US 10 Year Yield On The Cusp of Breaking DownThe 10 Year Yield has been trying to hold this B point level as Support for the longest time but everytime it tries to bounce it gets pushed right back down and in the most recent try we saw it come up to test the moving averages while it Bearishly Diverged and began a Death Cross. If we can get a serious BAMM Breakdown from here it coulkd go down all the way to 1.4% which would likely coincide with a huge decline in the DXY and a rise in the stock market.
TVC:US10YShort
by RizeSenpai
1
Long bond TLT looking more and more constructive in this rangeThe TLT has been mostly chopping sideways for the last 4 months, and while it is still directionless, it has been able to stay above it's cycle lows and not roll over to retest them. This consolidation is looking more and more healthy and if we can finally get some closes above 109, this could finally initiate a second leg higher to those Q2 2022 levels. Started a position here and would add on strength on continuation.
NASDAQ:TLTLong
by EvanMedeiros
US10Y: Last dip before a medium term reboundThe US10Y is trading inside a Channel Down ever since its market peak on October 21st. The 1D technicals are neutral (RSI = 54.601, MACD = 0.300, ADX = 17.030) giving a mixed tone to the price action but based on the December-January Lows we can see the the Channel Down has one last dip to make before it bottoms and rebounds on the medium term. We will wait for that pullback around 3.250 and buy targeting the 0.618 Fibonacci (TP = 3.750). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:US10Y
by InvestingScope
1
Inverted Yield Curve Starts in 2023 - Explained When the yield of the 3-month bond is higher than the 30-year bond yield, this is known as an inverted yield curve. It is a rare and unusual occurrence and we are seeing this today. This signals a potential economic recession in the future. An inverted yield curve suggests that investors have a pessimistic outlook for the future of the economy. They are willing to accept lower yields on long-term bonds because they anticipate a slowdown in economic growth. In contrast, they demand higher yields on short-term bonds because they expect the central bank to raise interest rates in response to inflationary pressures. An inverted yield curve can lead to a decrease in borrowing and lending activity, as it can make it more expensive for businesses and consumers to borrow money. This can result in a reduction in economic growth and can eventually lead to a recession. Some reference for traders: Micro Treasury Yields & Its Minimum Fluctuation Micro 2-Year Yield Futures Ticker: 2YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 5-Year Yield Futures Ticker: 5YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 10-Year Yield Futures Ticker: 10Y 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 30-Year Yield Futures Ticker: 30Y 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CBOT_MINI:30Y1!Long
by konhow
Market Analysis: The Coming RecessionIn this post, I will present a market analysis with a focus on recession metrics and indicators. Right now, many of them are sending a recession warning. Home Prices - U.S. home prices are surging higher at the fastest quarterly rate of change on record. (See chart below) This extreme rate of change in home prices is occurring as U.S. 30-year fixed mortgage rates also explode higher at nearly the fastest quarterly rate of change on record. (See chart below) Additionally, we see in the chart below that 30-year fixed mortgage rates have potentially broken out into a new uptrend on the longer timeframes. The best way to detect trend reversals is by using the Ichimoku Cloud. When the price closes above or below the cloud (the shaded area) it is considered to have "pierced" the cloud. Once the cloud is pierced to the upside, resistance becomes support. In this case, assuming the piercing sustains, we can see a sustained period of higher interest rates on 30-year fixed mortgages. Exploding home prices and exploding mortgage rates occurring simultaneously is unsustainable. Examine the yearly chart of U.S. home prices below and notice the similarities between 2005 and 2022. Notice that the Stochastic RSI is extended to the upside, and that home price extends above the upper Bollinger Band. Looking at this chart one could reasonably conclude that in the coming years home prices are likely to revert to the mean (orange line), as they did during the Great Recession. Many analysts try to contradict what this chart is suggesting by claiming that we are in much better shape now than during the sub-prime mortgage crisis prior to the Great Recession. But are we really? With spiraling inflation, every mortgage holder suddenly becomes relatively more sub-prime. We also did not see mortgage rates explode then as quickly as they are now. Unemployment - Analysts point out that the current low unemployment is a reason to believe a recession can be averted. But under the surface, that's beginning to change in a hurry. Below is a chart of most leading unemployment data published by the Federal Reserve: Seasonally Adjusted Initial Claims (Weekly). In this chart, we see that in about a period of the past 4 months, the amount of new unemployment claims has risen by around 100,000 or about a 50% increase. Compare this to the chart from the 2007-2008, when the U.S. economy was beginning to enter a recession (the shaded area represents where the recession began): In the period leading up to the Great Recession, we saw a rise of about 50,000 new unemployment claims or about a 15% increase over a similar 4-month period. Therefore, the rate of increase of initial unemployment claims (both in real numbers as a percentage) is higher now than when we entered the Great Recession. Perhaps more worrisome is the difference in how accommodative the Federal Reserve was in response to rising unemployment. Here is how the Fed Funds Rate changed as unemployment began to rise in late 2007 into 2008: As unemployment was rising, the Federal Reserve began to cut interest rates. Compare this to the current situation in the below chart which shows the Federal Reserve raising interest while unemployment is rising. This change in context is reflective of both the fact that the Federal Reserve is behind the curve with containing inflation and the fact that the Federal Reserve is prioritizing the current problem (inflation) at the expense of the future problem (unemployment). We are experiencing a macroeconomic situation whereby rapidly rising initial unemployment claims are being paired with rapidly rising interest rates. This combination is unlikely to end with any other outcome than a recession. For more details on unemployment data see here: www.dol.gov To interact with the initial unemployment claims data on a weekly basis you can go here: fred.stlouisfed.org Yield Curve Inversion - The 10-year minus the 2-year Treasury yield is used to detect an impending recession. When the 2-year yield rises above the 10-year yield that creates a yield curve inversion, which can often indicate that a recession is coming. Right now the yield curve inversion is very steep. In fact, just recently, the yield curve inversion actually steepened to a level that was even worse than what we saw before the Great Recession. Perhaps most alarming are the rates of change in interest rates. Look at the 10-year yield Rate of Change on a 3-month basis: Here's the 2-year yield rate of change: The federal reserve uses the 10-year minus the 3-month as a more reliable indicator for detecting an impending recession than the 10-year minus the 2-year. However, the rate of change for the 10-year yield has been so parabolic to the upside that the 3-month yield has been struggling to invert relative to it. However, that may soon change. Here's the 10-year minus the 3-month yield chart: Volatility - As you know, volatility is measured by the VIX. The yearly Stochastic RSI for the VIX is trending upward, signally the potential for greater volatility now and throughout the years ahead. This part is a little confusing, but try to follow if you can: Volatility of volatility is measured by the VVIX and is considered a leading indicator of the VIX. Currently, the VVIX is so suppressed to downside that the K value of the Stochastic RSI oscilator has reached zero for only the second time ever. (The first and only other time this has happened was in 2008). While this may be more coincidental than predictive, it nonetheless suggests that volatility of volatility has nowhere to go but up. See below. Margin - Margin has already unwinded both in real numbers and as a percentage by a magnitude that is consistent with, and usually only occurs during, a recession. See chart below. Credit to Yardeni Research, Inc. You can view their full report here: www.yardeni.com Stock Market - Several bellwethers in the stock market are showing that, while we may have a robust rebound from extremely oversold levels in the short term, the longer timeframes look quite bearish, especially for the interest rate-sensitive tech and growth sectors. For more details, here is my analysis on the QQQ/SPY relative performance: Tech and growth are not alone in the bearish context. Indeed, the bull run from the end of the Great Recession to the current period has been characterized by increasing prices but decreasing volume. This is generally bearish, and may reflect that quantitative easing was a large cause of the bull run. Now, quantitative easing is ending in the face of spiraling inflation. Other Metrics - There are many other metrics that are used to detect recessions (e.g. GDP, PMI, M2V). Some may even look toward shifts in demographic trends, rising geopolitical tensions, declining globalization and climate change as recessionary factors. While I cannot discuss every possible metric, one last metric worth considering is the corporate bond market. In 2020, during the COVID-19 shutdown, in order to stabilize markets, the Federal Reserve rushed in to save corporate bonds from crashing fearing that high borrowing costs for corporations could cause liquidity issues. Corporate liquidity issues can cause a whole host of issues from bankruptcies to layoffs. Currently, however, corporate bond prices have fallen to nearly that of the COVID low when the Federal Reserve rushed in to buy, yet the Federal Reserve is only just beginning quantitative tightening and just now beginning to roll bonds off its balance sheet. Finally, I will leave you with this note: The time-tested winning strategy is to continue contributing as much as possible to your retirement fund. If the stock market crashes, do not stop or lower your contributions or try to pull money out because you think the world will end. Rather, continue to contribute as much as you can afford no matter what to a retirement mutual fund with diversified holdings. Contributions during market downturns will buy you more shares of your retirement mutual fund relative to the number of shares your contributions bought prior to the market crash. When price rebounds (and it will) you would have been glad to stick to this investment strategy.
ECONOMICS:USSFHP
by SpyMasterTrades
121
TBT Bull Flag. MACD + RSI DivergenceTBT, the Long Rate Fund; Or short TLT fund is showing signs of strength on the MACD and RSI; with divergences. The previous month saw high volume indicating interest around the current price levels. It is sitting at the 200 SMA. Currently much of the market is pricing in rate drops. However, we have have FOMC on May 2nd, and have been hearing roomers of another rate hike by the FED. If this happens, TBT will likely go up, confirming the divergences on the graph, and breaking out of the current wedge.
AMEX:TBTLong
by loves2spooge