4 VS 1 / DJI, SPX, IXIC y RUT Versus TLT (BONDS 20 YRS)
Cuando las acciones suben, los bonos deberían bajar. Es simple porque los bonos son como una inversión poco rentable pero segura en tiempos difíciles. Pero cuando comparamos 4 índices con un ETF para bonos a largo plazo, me viene a la mente que en el futuro, la mayoría de los inversores están apostando al mercado a colapsar, (no ahora). Podemos ver la línea de convergencia (por ahora) entre ETF "TLT" (BONOS 20 AÑOS) y 4 índices importantes de USA.
Obviamente, si vemos la imagen macro de "US 10 Y", descartamos cualquier riesgo en el corto plazo.
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As we know about opposite, when stocks go higher, Bonds should Go Down. It is simple because Bonds are like a low profitable but safe investment in hard times. But when we compare 4 indexes against an ETF for Long period bonds, it comes to my mind that in a future mostly investors are betting market to crash, (not now). We can see the convergence line (for now) between ETF "TLT" (20 YEARS BONDS) and 4 important indexes of USA.
Obviously, if we see the macro Picture of "US 10 Y" we are very solid at this time and we discard any risk.
TLT
S&P may sink again sparkingA few things.
1. Over the last 2 years every time S&P has made a higher high and reached RSI down trend it has fallen hard.
2. Bonds are currently signaling stress and deflation despite trillions of QE. For reference see; US2's/10's , TLT.
3. Many eyes are on the DXY breakdown however that is mostly skewed toward EUR, Yen, GBP. The broad trade weighed USD is still very bullish.
4. Net USD positioning is net short. If there is a wobble in stocks safe haven demand for dollar will cause a massive short squeeze in USD.
5. Golds correlation with negative yielding debt confirming much higher bond prices (lower yields).
SPX and TLT, Which Will Correct?1. First Warning Sign:
a)Volatility in the markets increasing.
b)Bonds starting to increase as funds leave the
markets, selling into retail
-Previous resistance on TLT was broke
c)The SPX and TLT typically move opposite to each other
-More on that later
2. Result:
a)Funds pull their money out of the markets leaving retail holding the bag at the top
b)Bonds increase further to new highs and current resistance levels
3. Outcome:
a)Remember is the first part where bonds and the markets usually move opposite to each other? In this section, bonds have remained high. This divergence means one of these charts is wrong and expect a correction accordingly.
b)Gold is past all time highs, Silver is lagging behind gold but closed July strong and bullish. Crypto also closed July bullish
c)Stocks have since had historic rallies. Some are near or past all time highs.
d)Feds have increased their balance sheet substantially and will continue to do so.
4. What's Next?:
a)I see two probably options
b)The first being; Feds will continue to support the economy causing a melt up in which investors will have no choice but to partake in. This could lead to an even bigger crash down the road.
c)The second; The Feds will no longer support the market in which TLT will likely break this resistance and continue to make higher highers and the market will make lower lows.
A Macroeconomic Perspective for Diverging MarketplacesPowell's admission that he's not even thinking about, thinking about, thinking about raising interest rates means there's no possible scenario under which the Fed would raise rates. No matter how low the dollar falls or high gold goes, the Fed will be late again. I suspect the mmimd or lower 80s the the DXY is on the way. This is based on clear-cut macroeconomic data that is currently devaluing the dollar naturally as it should in an economy that continues to inflate, whilst remaining capped in terms of nominal (real) GDP. The unemployment outlook is getting bleaker as new weekly jobless claims were not only above 1 million for the 19th consecutive week, but with yesterday's 1.434m print, they are now higher for the 2nd week in a row. The "recovery" has already ended, and the relapse has already begun.
20:15:02 ( UTC )
Fri Jul 31, 2020
Convergencia en ETF BONOS TLT y SPX / Convergence TLT VS SPXSi, se supone que cuando no se invierte en acciones por alta volatilidad y riesgo, los inversores se refugian en bonos y materias primas, pero se observa que la emisión de bonos que promedia el ETF TLT va en aumento y está cerca de romper resistencia en su cotización, comparada abajo en naranja, también converge el indice SPX buscando romper resistencia en puntos.
Muy rara vez convergen ambas y esto nos dice que hay más liquidez institucional empujando la bolsa con estimulos, mientras que la mano temerosa esta huyendo a intrumentos de renta fija como los bonos.
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Yes, it is assumed that when not investing in stocks due to high volatility and risk, investors take refuge in bonds and raw materials, but it is observed that the issuance of bonds averaged by the ETF TLT is increasing and is close to breaking resistance at Its price, compared below in orange, also converges the SPX index seeking to break resistance at points.
Very rarely do both converge and this tells us that there is more institutional liquidity pushing the stock market with stimulous, while the fearful hand is fleeing to fixed income instruments such as bonds.
TLT / Treasuries are breaking out post FOMCThe chart on the right represents 30 year treasury bonds. The chart on the left is TLT, an ETF that expresses a trade in treasury bonds.
The way to profit most is probably via call options on TLT. I am looking at the 172 strike in August.
The other way is to be long futures. I am long ZB1! futures contract. The negative is the minimum size is $181,000. So for most retail traders, call options on TLT is the best way to play the long here. Owning TLT outright eats a lot of capital for low return.
Here is the long term chart of 30 year treasuries:
Other ways to play this:
5 year treasuries ZF1! (125k contract but much less volatile)
10 year treasuries ZN1! (140k contract with more vol than the 5 year but about 1/4th the vol of the 30 year.
TLT: Looks like the downtrend failed and we get a rally...It looks like bonds will rally until the elections possibly here. I'm long bonds and gold for the time being.
Let's play it safe until we regain clarity. Not sure about equities but the new ATH in #SPX might indeed happen at some point, just that news make it extremely risky to trade equities until the elections risks are out of the way. This is a safe trend to hold on to meanwhile and squeeze a 25% return out of.
Cheers,
Ivan Labrie.
Correlation between SG Bond Yields and TLTIn an interesting comparison, Singapore Bond Yields precede the TLT (blue line) slightly, especially in the recent year. See the elllipses marking out the break points, and SG Bond Yields are leading.
Noted that the SG Bond Yield has been strongly downtrending, ahead of the TLT bullishess (inversely indicative of the US Bond Yields).
I think it signals the undercurrents that something is not as rosy as it appears. The SG bond Yields are telling...
TLT and USDT.D in SyncCheck out my full blog post!
www.derzzycharts.com
We are always looking for ways to have an edge. There are technical indicators that can help us know the trend of the market, then there is intermarket analysis. We have a new correlation to keep an eye on and that is TLT and USDT.D. So how can we use this? Well when USDT.D is gaining market share, that is bad for BTC. They are inversely correlated, while TLT and USDT.D have a positive correlation. So if we see TLT rip to new all time highs, we can assume that USDT.D will follow, which brings BTC down with it. If we see see TLT put in a higher low, then we can watch and see if USDT.D also puts in a higher low, which is good for BTC.
This one looks promising as a leading indicator for some rotation into USDT. I like it because it’s so simple! TLT lead by roughly 2 months this past time. Timeframes can vary quite a bit, but we can use that as an estimate for now. Just more proof that BTC has intermarket correlations with the other markets! I personally think this is a good thing. Anything to help lock in the gains and be on the right side of the trend is useful. Keep your head on a swivel!
Happy Trading!
Brandon Anderson
brandon@derzzycharts.com
@derzzycharts
www.derzzycharts.com
TLT Bond ETF tells an underlying storyThe daily chart of TLT, the Treasury Bond ETF had broken out of a triangle pattern two weeks ago, retested recently and started to take off. Global fund flows also corroborate inflows into bonds, even as the equity markets push higher and even historical highs for the Nasdaq.
The rise in bond inflows is signaling an imminent bearish sentiment building up, and the tide is turning.
Clearly aligned to and supportive of previous posts on Es1! and IWM as well.
This TLT breakout is supported with the MACD, and projections put an upside target in mid-September.
GoNoGo Charts spots a "Go" trend on treasury fund, TLTWorried about the stock market and if it can continue higher after this impressive rally since the lows of March?
GoNoGo Charts sees a “Go” trend emerge on the iShares 20 year treasury bond fund. Perhaps we are seeing a movement of money from stocks to bonds, in a bet to hedge against a stock market downturn.
The GoNoGo chart above shows that the GoNoGo Oscillator has been positive and above zero since June 17th. Recently, the GoNoGo Trend indicator has struggled to stay “NoGo” as shown by the appearance of a few amber, neutral bars. On the current bar, the trend in the treasury bond fund is a “Go”.
What are the GoNoGo Indicators?
The GoNoGo Trend indicator blends traditional trend concepts to color price action according to the strength of its trend. The colors range from *bright blue (strongly *bullish) to dark *purple (strongly *bearish)
The GoNoGo Oscillator blends traditional *momentum concepts to demonstrate the velocity of price action. The oscillator ranges from -6 (extremely *oversold) to +6 (extremely *overbought)
US Dollar Index & RatesThis circular relationship is leaving many analysts puzzled as to what's next for the Dollar. Weight of the evidence points to a lower Dollar for now.
A truly weak US Dollar means the clocks ticking on the current bull market in Bonds and subsequently the upward trend in equities.
Bullish on TLT Swing sell signal will likely trigger this morning on TLT . To be confirmed at the open but ... looking good. ...
The above are for education and entertainment only. They must not be interpreted as investment advice nor recommendations. Trade at your own risk and mostly, trade safely and keep safe!
Cheers!
EMA-cross trend analysisWhen the 20ema crosses below or above the 50ema, it has been an amazing signal in trend reversals.
Creating the strategy on your own is very easy to build and follow.
The inverse of the TLT is TBT; which could prove to be interesting if we continue to see interest rates tick higher.
Important to note, that the Bull-cross has been much more indicative than the Bear-cross in the past.