The Dollar keeps top ticking ahead of CPI releaseUUP isn't too far behind either. BTC is under 40k- has been weak all week. I still think, if the dollar remains strong, why wouldn't this be bullish for companies that are sitting on a ton of it? AAPL, GOOGL, MSFT etc. It would seem overseas bonds would look attractive at this point given the slaughter they have been receiving.
Bonds
The #1 Chart to WatchLadies and Gentlemen, please take your seats.
(...the music stops)
Okay, thanks for playing. Good luck to all of you!
The investment strategies that have worked for the last 40 years will no longer work. The true bear market is here. This will absolutely 100% NOT be a recession that will be forgotten easily.
It most likely will be a depression via stagflation which we have never really experienced long-term.
Our leaders won't admit it but *News Flash* the Supply Chains are NOT getting fixed like they were before. China has no incentive or interest to fix them and we are the world's biggest debtor. We got 20% of all our imports from them in 2021. That doesn't sound like a lot but that 20% is involved in the supply chains of 70-80% of our goods. The Chinese gov has already warned its people of the incoming food shortage and have been far more honest with their people than our Western leaders have been.
Good luck in the New World Order!
Courtesy of the World Gov. Summit 2022, the IMF, World Bank, etc.
(Not Financial Advice, Just what I see.)
US10Y-US02Y Time To Pay AttentionEveryone is talking about yields inverting and the recession that follows it. Here I am going to do a quick rundown on how to actually use this information to your advantage.
It is not the yields INVERTING that is cause for concern. This is only the first step of a potentially long process. It is when yields start STEEPENING that there is real cause for concern.
There is no question that yields inverting is a recession signal, it has historically proven itself to be since the 1970s. But if you think the market is ready for a recession right at this moment of inversion, you are misinformed.
Pay close attention to when the yield first inverts, to where/when the market actually enters a recession. It is not until after yields STEEPEN is when there is real downside.
Now, this brings us to the chart, where we are potentially seeing the first signs of steepening. Not only from the yields themselves but from the Bullish Divergence on the RSI.
As yields have inverted (gone down), the RSI has trended up, showing a clear divergence. Also, notice how far yields have deviated from the 200MA.
If you compare it to 2000, it is potentially showing a very similar picture
Even in august of 2019 we see the same divergence which signaled yields to begin rising. Which told us it was really time to pay attention in the coming months.
These are just a few insights to hopefully help you understand what this all means in the bigger picture. Right now more than ever is the time to pay attention and to stay vigilant.
Hope this helps!
Here is my initial analysis on yields tightening, as well as the Yield Inversion in relation to the SPX:
US10Y yields reaching a historical topYield's are tapping the top of this downtrend established since 1981 while the monthly RSI is at the most overbought levels we've ever seen. Also we can see that the yields are above the 144 monthly moving average that typically acts as resistance.
There is still a possibility at this rate, with how crazy this market is, that it could blow out of this channel and then meet resistance around 3.4%. I have doubts this will happen, but anything is possible.
Is J Powell watching this chart and greasing up the printer? Only time can tell...
The $SPY today in real money is at same level 2007If you think $SPY is at new high levels today in comparison with dot com bubble and 2008 crash, Think again.
$SPY today is actually 58% cheaper than it was in the peak of dot com, and cost the same as it did in 2007.. in term of gold. The SPY in monthly chart shows it recovery from dot com crash started Jan 2013.
Ticker SPY/GOLD
Bonds Sell Off on Hawkish Fed MinutesBonds are back to hugging lows, after a brief attempt at higher levels. We found immediate resistance one level above at 121'00. Even the rally to that level encountered serious resistance at every step, confirmed by red triangles on the KRI. We are back to lows again at 120'14. The Kovach OBV is very bearish so we can expect an imminent breakdown to lower levels. Our next target is 119'23, which is significant as we will have given up the 120's all together.
U.S Dollar Analysis - USD/JPY & EUR/USD In this video, I breakdown why the U.S Dollar is bullish against the Japanese Yen and maintaining its strength against the Euro, as the central bank, ' The Federal Reserve", is raising interest rates aggressively in 2022 to deal with high domestic inflation.
This is in contrast to the European Central Bank and Bank of Japan, which have pledged to keep interest rates low, due to low inflation expectations over the coming years.
I will show you how Bond yields drive currency markets when rising yields in the U.S pay a premium over Europe and Japan when there is a divergence in monetary policy.
Enjoy!
TLT ReversalNASDAQ:TLT is showing signs of reversal with a reaction off the low of March 25th. Today's catalyst of dividend payouts made it open right at the 50% Retracement Level. If price holds this level a good Risk/Reward trade would take price back to 141 which is the 50% Retracement of the last few months' down trend.
USDJPY Could Retest The Highs, While US Bonds Are DownHello traders!
Today we want to share an intraday update for USDJPY pair in which we see nice and clean bullish impulse in progress, ideally back to highs for wave 5 that can retest the highs and 125 - 126 area.
The main reason why USDJPY may stay up is still an unfinished five-wave decline on 10Y US Treasury Notes.
As you can see, there's a negative correlation, so if bonds are still pointing lower for wave (5), then USDJPY could easily stay up, while the price is above 123.05 invalidation level.
Trade well!
If you like what we do, then please like and share our idea.
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
10 YEAR Bond Yield Just Broke Above Multi-Decade TrendlineHey Guys, in this video I give my opinion that the 10 Year Bond Yield has broken out above it's multi-decade downward trendline and it's set to go higher because inflation is growing significantly and is at historical extremes above the 10 year yield. I think it's because of the Fed that has absolutely over-flooded the system with liquidity, check out the chart below of central bank assets as a % of GDP. This has big long term implications for all investors and traders, it could possibly cause poor stock market returns for decades to come in addition to the already painful higher cost of living relative to wages. Imo, Fed official's have turned millennials pensions and investments into "boomer exit liquidity" for their own benefit. They borrowed from the future and we will pay the price for that for years to come.
Let me hear your comments below with what you think about all of this? Did the Fed go too far? Are rates at the start of a multi-decade bull market?
Jared
I'm keeping an eye on this channel top for US20YSoon it might be a good time to buy TLT or TMF. The top for bond yields looks near to me as it gets close to this channel top. A good confirmation for a pullback would be to watch for a break in the stoch support.
You could argue that it is also making a megaphone pattern with the support at 2.6% and the resistance at the channel top. I looked into this pattern and it could be bullish or bearish unfortunately, so it is hard to say what it'll do until it breaks either side. I charted a bullish possibility and target if it does break out, such a move could end up quite bad for the market, so I hope it won't happen.
Will an inversion in US bond yields trigger a recession?Worries of a looming recession intensified late Thursday last week after the yield on the two-year US Treasury bonds hit 2.337% as the yield on 10-year bonds fell to 2.331%, marking an inversion that usually preceded previous periods recessions.
It was the first negative spread since 2019. However, Treasury yields flipped again on April 1 and again on April 4, when two-year yield rose to 2.453% against 10-yield that hiked to 2.432%.
An inverted bond yield shows signs that financial conditions are tight and could also signal a looming downturn. Under normal circumstances, the yield curve is not inverted since debt with longer maturities typically carry higher interest rates than nearer-term ones.
Considering that every recession since 1955 was preceded by an inversion in the yield curve for US bonds, its recent and more frequent occurrence surely does not alleviate concerns in the market, especially when it remains on high alert for the economic implications from Russia's military attacks against Ukraine and the growing inflation in the US.
Bond yields as recession markers
According to a 2018 report by researchers at the Federal Reserve Bank of San Francisco, each recession since 1955 followed the inversion of the US yield curve between 6 and 24 months. The only time the 10-year to two-year Treasury spread provided a false positive to a recession was in the mid-1960s. That instance did not deter economic officials from looking into bond yields when checking for signs of an approaching recession.
On Aug. 28, 2019, the yield on two-year bonds briefly surpassed the yield for its 10-year counterpart. This negative turn of the spread predated the two-month recession that started February 2020, which also happened amid the outbreak of the Covid-19 pandemic.
Before that, Treasury yields flipped for most of 2006. Nearing the end of the following year, the Great Recession happened and lasted until June 2009, marking the longest recession since World War II.
Not the only indicator
While bond yield inversion has been a reliable indicator of recessions in the past, it is not the only factor that could tell another period of significant, widespread, and extended economic decline is approaching. More importantly, even if they do predate a recession, an inverted bond yield is not the reason why it happened.
The performance of the bond market is only one of many factors that affect the direction of the economy. The recent movement of the yields of both short- and long-term US Treasury bonds could simply be indicators of how the market expects regulators to respond to global events and economic trends.
Increasing yields of short-term US government debt reflect expectations of a series of rate hikes by the Fed. Meanwhile, the slower pace of growth in the yields of longer-dated government bonds happen amid concerns that policy tightening may be hurting the economy.
Nevertheless, expect market watchers to look closely into bond yields over the next few months. Economic officials will likely do the same because if past recessions taught us anything, it is best to treat these indicators with caution and still have plans in place to ensure that even if a recession does materialize, its impacts to the economy will be lessened as much as possible.
Possible Bonds Breaking out?Bonds appear to be breaking out alongside DXY.
Record amounts of shorts have been piled onto Bonds to the order of 4 sigma - everyone and their dog is short bonds - so you know what that means!
Rates aren't rising, the Bond market sees what is coming - and it is deflationary. Use a leveraged Bond ETF such as TMF to capture the big move in bonds!
BTCUSD and 10 Year Treasury Inverse CorrelationWhen you track the side by side chart on the hourly you can really start to see the inverse relationship occurring real time.
The bond market sells off, Bitcoin rallies, and vice versa.
This is very telling that there is a clear relationship with bonds and BTC.
And it's new. This has only started happening in the last 30 days.
What does it mean?
Check out the Daily:
Will the Bond Market Continue to Sell Off??Bonds have reached a relative high at 123'01 to the tick then promptly rejected this level. A red triangle on the KRI confirmed resistance and we headed straight back down to through the 122 handle to finally find support at 121'28. We are currently seeing some support here, confirmed by a green triangle on the KRI. However the Kovach OBV has taken a steep dive south suggesting the bear rout is about to pick up again. If so, the next target is 121'00, then 120'14. If we are wrong, we must break through 123'01 before we can consider higher levels.
US 10 YEAR BOND US 02 YEAR BOND US10YAlarm in the markets: a part of the US interest rate curve is inverted that has not been in 16 years
US five-year bond yields rose as much as 10 basis points to touch 2.64%, outperforming those on 30-year bonds.
Receive a cordial greeting, In Spain on 03/30/2022.
Sincerely, L.E.D.