Did yields just flash crashI have a buddy on a trading desk, but he doesn't see this flash crash on his Bloomberg terminal. Thoughts?
Us10yr
ridethepig | Historic Moves In Yields !An insane move across Yields with historic outflows, I am expecting some relief over the coming weeks but we the lows are still open for a 5th wave sequence. This target will worryingly come into play at 0.20x! We have intentionally covered the Credit Spreads together here in order to see what is "challenging" in the US economy:
Such compensation is frequently that the recession is forced as the economy ends up in some wilderness. Such an environment is however transformed into a garden of Eden if the transition away from Protectionist Public Sector flows and Governments is opened. The following examples will make my meaning crystal clear:
After VIX exploded 250% !!! via coronavirus triggering the immediate mistake occurred in Monetary policy which sent shockwaves across all main markets. The Fed capitulating is a major blow to Central Banking independence, because the Whitehouse mismanagement and fiscal policies are being funded in broad daylight by Powell. The crossroads between a higher stock market and a higher dollar was always going to trigger the next round of easing and QE.
Of course, Yields can be bought after the lows are set but that takes time. But buyers have no worries, since with a solid centre a loose Rates market is easy enough to defend. Even more than that, Fed's "Loose Gambit" will turn into a slow moving but safe instrument of attack on USD:
And now that we have to some extent defined the logic between the wilderness markets are walking into via the demand and supply shock vis a vis the monetary policy measures referred to at the start of the segment.
For the technicals 🗺
Steel Support 0.72 <=> Strong Support 0.81 <=> Soft Support 0.85 <=> S/R FLIP <=> Soft Resistance 1.08 <=> Strong Resistance 1.17 <=> Steel Resistance 1.24
It is extremely important to track this chart and understand that markets challenging Central Banks, though it apparently only looks like a spiteful play, in fact represents a problem in the underlying structure of protectionism in the US.
Thanks as usual for keeping the likes and comments rolling!
US GOVERNMENT BONDS 10 YR YIELD (US10Y) DailyDates in the future with the highest probability for price direction reversals
Historic Move for U.S. Sovereign Debt 13:26:58 (UTC) Fri Feb 28,First time for US 10yr
13:26:58 (UTC)
Fri Feb 28, 2020
SP500 earnings yield greater than 10 Year US Bond Yield ... SP500 earnings yield greater than 10 Year US Bond Yield ...
ridethepig | US 10Y Yields (Weekly)Markets are focused on three topics this week: (i) The 4Q 2019 Earnings season, (ii) coronavirus spillover concerns and (iii) Sanders performance in Caucuses. In US Yields the picture is crystal clear on the Long-term chart, for those following the 1.50% support level we are tracking on the daily you will note where the strength in defence comes from in the medium term:
On the technical side the same levels to track:
Support : 1.50% / 1.45% / 1.32%
Resistance : 1.68% / 1.75% / 1.95%
In my books the impact of the virus is going to have a major impact on US GDP growth, tracking for 2% drag on Q1 growth. Chinese spending offshore is expected to drop by 0.6% (which is a conservative estimate). This is weighing on investor decision making as the impact will come through valuation changes rather than the earnings. If you are a believer in the virus having a short lived impact, then you can increase exposure on this dip in cyclicals and value companies. The industries hit hardest are airlines and travel with gaming to a lesser extent receiving a hit via Macao shutdowns.
All the best guys, and as usual thanks so much for keeping your support coming with likes, comments, charts, questions and etc!!
ridethepig | US 10Y Yields At SupportA quick update that I will try to keep relatively short for those charting the US10Y we have important updates after markets struggled to shake off risks from China. The support in Yields is starting to form a bullish basing pattern, although the medium term structure is weaker the immediate horizon looks strong and stable above the 1.50 line in the sand.
The bounce from 1.50% support was widely expected, here noting the key levels for our map:
Support : 1.50% / 1.45% / 1.32%
Resistance : 1.68% / 1.75% / 1.95%
What is typical of the big leagues, and this of course is no exception in US10Y which is where the biggest sharks are found, it is and will remain advanced playing fields for advanced swing traders only. Retail making use of the weekly close looking soft and betting on the continuation will provide the fuel for a spike as they cover and become trapped in a squeeze. Remember.. even when smart money appears to have a gun pointed at the head, it always finds the time to mass his troops in defence (now you see why this weekend was vital!!!!)... If you are keen to learn, you should model yourself around these premises.
All the best guys, and as usual thanks so much for keeping your support coming with likes, comments, charts, questions and etc!!
ridethepig | US 10Y Yields At 1.50 Support A deliberate soft closing down at the 1.50 lows (instead of breaking through allows for an underestimation in the bounce); here, the systematic approach of buying the dip deserves victory. We can cast some light together on playing through the flank:
In the extraordinarily traditional sense an inversion which we are looking at always leads to a recession and volatile positioning. This change of cycle that I have mentioned usually crops up in Vol first:
But what is typical of the big leagues, and this of course is no exception in US10Y, is and will remain advanced playing fields for advanced swing traders only. Retail making use of this soft close and betting on the continuation will provide the fuel for a spike as they cover and become trapped in a squeeze. Even when smart money appears to have a gun pointed at the head, it always finds the time to mass his troops in defence (now you see why this weekend was vital!!!!)... If you are keen to learn, you should model yourself around these premises.
All the best and thanks for keeping your support coming with likes, comments, charts, questions and etc!!
Will Interest Rates be Spiking?If you follow my work, I have said that stocks will continue to move higher because there is nowhere to go for yield. Central banks have suppressed interest rates where equities are the only place to go. The time to sell stocks will be when interest rates SPIKE. Likely in the double digits.
This chart of the ten year US yield, is very important as the 10 year yield essentially is the base for other rates in mortgages, credit and loans etc.
You can see that we were at 16% back in the 80's, and we are not about to retest the lows again which was set in 2012,2016 and seems like it will occur this year. Setting up a triple bottom, or a range after a very extended downtrend with multiple swings.
Remember, bonds and yield are inverse so when yield drops, bond prices move up. This is still likely to happen. Why? Because in a risk off environment, you run into bonds. Meaning bonds go up, and yields go down.
Now think that you are institutional fund or even a pension fund that needs to chase yield. Pension funds were historically into fixed income but have now had to switch to equities to chase yield. Institutions, or other larger funds, that follow asset allocation or rebalancing generally sell stocks when overpriced and move into bonds and vice versa.
Well we are in an environment where BOTH stocks and bonds are at highs. Some would say overpriced.
What does this mean? It means bonds are not held for yield, but are held for trades. Finding a greater fool who would buy the bond and loss money holding it until the duration of the bond. This is apparent in Europe and Japan where yields are negative. However, bonds still are traded because many think yields will be cut deeper into the negative!
In the US and other western nations, many think cuts will go to 0, and perhaps even into the negative. This means bond prices will go up. Again, a trade and not really held for yield.
One day it will make no sense to hold bonds for yield...just for trades...which is likely what we are already seeing. Don't believe my analysis? Listen to someone more wealthier and more smarter than me, Ray Dalio. He is warning of a paradigm shift where interest rates must go higher...unless bond markets are killed.
So central banks cannot control longer term interest rates, they can actively control short term interest rates. QE was a way for central banks to buy longer term bonds to suppress long term interest rates. Essentially taking away the capitalist free market price mechanism for interest rates. We are in managed debt markets. Europe and Japan can be in negative rates because they killed their bond markets. Because of negative rates it really is the ECB or the BoJ that is at the auctions.
This is why many are saying that central banks have run out of tools. They can only do QE forever and can never allow interest rates to ever normalize because it would wreak (rekt) people. This is the confidence crisis that is upcoming. Soon markets will realize that central banks are stuck. That QE, which was a desperate policy to prevent another 1920's-30's like global depression, is now the norm and will continue forever because it did not actually work for the recovery.
Central banks need to keep this system propped, meaning rates will be dropping. When I checked the yield curve today, the inversion is coming back. I am expecting a rate cut to happen well before the market expectations of a cut in Fall of 2020.
So where do you go in this type of macro environment? Where do you go in a risk off environment? Gold is looking pretty attractive...
US 10 Year Treasury | Supply and Demand zones | New Trend?
Note: Stock trading requires a personalized trading strategy
*A method that specifies the type and amount of patience
*Entry and exit points
*Your customized psychology plan
*Risk management program based on your personality
________________________________________________________________________________________
Trading Rules:
END TRADES WHEN IT IS CLEAR THAT THE TREND YOU ARE PROFITING FROM IS OVER:
You’ve thought about every trade you make and have created a trade plan. When the market has confirmed your idea about the stock you finally decided to take a position.
Now the most important thing is to be aware of all the changes that might make your trade plan worthless. Be prepared to sell your position when the market changes direction.
When the confirmation the stock earlier showed is no longer there, there is only one thing you can do and that is to close your position.
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Hope this is helpful, Thank you for your support, have a great day
ridethepig | US10Y Moving HigherA timely update to the 10yr US Bond Yields chart as we enter into NFP territory. I am still expecting to see further upside with a strong bid in 1H20. Targeting the 38.2% retracement which coincides with the cluster of macro stops makes sense.
We come up against the last case in variation for the move, erroneously described as a surrender. To put simply after the impressive sizings its time to start paying close attention for early signs of a breakout. While to the downside it would take a break of 1.675 to call for reassessment in the view.
Those with a background in fixed income will know alarm bells are ringing louder than usual in bond markets with wages ticking higher than mortgage rates. This is not sustainable and when danger threatens and the crowd does not smell it, don't stand like a sheep, rather run like a deer.
Thanks for keeping your support coming with likes, comments and etc!
Long Term Perspective on US 10 YR BondsThe US 10 Year Bond is in long-term Bear Market with price trading below the 50 and 200 and 800 week emas. The 50 week ema is currently down trending, but price is above the 13 ema and is correcting back to the 30 and 50 emas.. Price is following the lower trend line up, so watch for a break of that to confirm a resumption of the down-trend. Long term expect a resumption of the decline in yields down to negative rates.
With this X-Wave having begun in 2004, during the Housing Bubble, we can conclude that the current interest rates are the result of the Bad Decisions made during that time. Thanks for F’ing things up Greenspan, Bernanke and Yellen. You guys were obvious in way over your heads. Now, it looks like Powell is going to follow them back down the Rabbit Hole. Let’s try to make some money off those Morons…
This is my US 10 Year Bond look ahead for my own trading purposes. FUTURES trading involves risk. Feel free to comment, but trade off of this post at your own peril.
On the fly...For those tracking the latest round of Fixed Income chart updates we have the final leg to the stool ahead right on time for NY. You will notice that on the back-end of the curve there is loud messages of a meaningful top being placed. The technical breakdown is indicating that we have another round of flattening towards key support at 32bps.
For the Chartpack today we have...
US 2s5s Curve :
US 2s10s Curve :
US 2s5s Curve:
The maps are crystal clear for US10Y Yields:
Highly recommend all those tracking Fixed Income to make note of the 2s5s10s and 2s5s30s " Fly " both breaking out with markets positioning ahead for 2020. Thanks for keeping all the support coming with likes, comments, charts, questions and etc! Best of luck those tracking for the end of the cycle and Fixed Income.
ridethepig | Rate Differentials Chartpack A rather quick update here as markets find a floor rate differentials as widely anticipated. It is no surprises for those following the chart previously:
For the technicals, those with a background in waves will know this is a textbook example of an ABC correction after a 5 wave sequence;
Things are a lot clearer in the FX board as we begin the flows in EURUSD:
Thanks all for keeping the support coming with likes, comments, questions, charts and etc. As usual jump into the comments with your ideas and views to open the discussion for all!
ridethepig | US10Y Market Commentary 2019.13.12A timely update to the US10Y Yield chart as we breakout with November highs in scope. We will not be covering US fundamentals here today and instead will focus on key technicals in play.
For the flows in our map for today and the rest of 2019 we have the key levels in play (highly recommend adding all to charts):
Steel Support => 1.65
Strong Support => 1.70
Soft Support => 1.78
Soft Resistance => 1.90
Strong Resistance => 1.98
Steel Resistance => 2.05
For those wanting to dig deeper into what and why we are trading these lows, it is the same swing as widely discussed in October:
Best of luck all those in Fixed Income and in particular US Yields for the final months in 2019...a difficult environment to say the least. Highly recommend all to dig deeper into the macro picture built on Telegram and in the previous chart archives.
Thanks for keeping your support coming with likes, comments and etc!
US 10-Year Yields Continue to RiseAs global financial markets continue to grind higher and reach new highs, it appears that yields on the US 10-Year Treasury are doing the same.
Yields broke through their previous yearly high of 1.899% (Green Resistance Line), settling at 1.943% (as of Nov 10th), and are trying to make a move higher.
On a technical basis, yields seem to be forming an "Ascending Triangle" pattern, supported by a rising RSI and MACD, indicating that this recent uptrend has some legs to stand on.
This recent bullish action comes as investors are beginning to feel a little bit more optimistic about the global environment as 2019 comes to a close.
If 1.899% can hold as a steady short term support for yields, and its momentum continues, the next stop could be its Weekly Resistance Line of 2.042% (Orange Line).
USA 10YR: 1.00 by Mid 2020; Lower is PossibleContrary to what most people believe, 10 year yields have very little to do with the DXY, but rather acts as an outlook/sentiment with respect to the global economy. Of course there are many other things in play, however, in this impending recession that will be the major driving force for the 10 year.
Moreover, plummeting yields from most other nations will lead the US yields artificially lower.
I expect by February or March 2020 we could see a full 1.00. There is potential it could drop further but I am holding firm on a 1.00 prediction at this time.
Eventually, yields will eventually burst upwards and begin to rise which will likely happen in the last (late) quarter of 2020. From this point, precious metals will completely decouple from yields.
- zSplit
10Y US TREASURY NOTE|PREMIUM[LONG-TERM]PRICE ANALYSIS|PART 1/2|ZN1! : Series on Bonds - Sept 20th 2019(4-5 minute read)
This is a two part analysis on the US 10 year Treasury note , the second part analyses the yield. In my opinion, technical analysis is somewhat (okay-ish) effective in analysing bond price action, especially to bonds with longer maturities. This is because they are priced in terms of private expectations. Which are based on market psychology principles that are one of the main foundations for technical analysis. Fundamentally, building models with matrixes of auctions prices is the better method , however as an individual retail trader with limited time, it's quite an unrealistic thing for me to do.
Now, let's begin by analysing the structural wave build up. The closing monthly top on Wave 1 after the 2001 recession(~117$) provided for the impulsive wave buildup. Unfortunately, I would have prefered if the data extended back to 1984 for a more accurate trend analysis, but from the current chart a precise EW buildup can be observed. Wave 3 (top 134) happened after the 2008 recession.
Both of these bullish waves continued to form, despite an official NBER recession ending announcement. In my opinion, a more accurate estimation of the recovery in the economy can be observed from the bond market as compared to purely basing such an observation from equities . Despite the official end of the recession being June 2009, the unemployment rate peaked later that year .
I know it's extremely inappropriate to perform a trend analysis on the unemployment rate, but this is just to support my previous argument and strictly informational.
What are the expectations moving forward? Similarly to the WXY 03'-07' expansion , the current WXY expansion (12'-19') is near its ending. Perhaps with the current " mid-cycle" rate adjustments and medium fiscal stimulus the cycle could extend . If a US/China deal gets done and cycle extension does happen, it won't completely undermine the increased probability of a recession in the next 3 years . What further complicates things are the 2 020 US elections, Brexit and the cooling down situation in the Eurozone . Hence, I see a formation of a bullish triangle in Bond prices .
Zoomed in chart 2019-2023 potential triangle build up in case a cycle extension happens.
To sum up this analysis, in case a recession occurs, based on the wave build up- the maximum target for wave 5, would be in the range of 146-153 . I am not sure if the Wave V would have have a 2.62 extension( based on the already low yields This analysis supports my previous extensive work on FED rate cycles(Link #1 below). The blurry WXY at the end of the chart is what I would expect during the next extension. I have to emphasize that I attempted to find a pattern in the Moving averages and other technical indicators, but came to the conclusion that they are simply not as precise as the Elliott Wave Setup . This is it for part one, make sure to check the much more complicated Part two Yield analysis on the 10 year US T Note.
|Step_Ahead_oftheMarket|
P.s. Would appreciate some feedback charts or simple comments expressing your opinion on the bond market, thanks!
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Some of my popular analysis relevant to the bond market :
1. RECESSION IMPENDING?(PART2)FED RATES SUPERCYCLE|PREMIUM ANALYSIS:
2. The VIX :
3. XLU - SPX Sectors Finale :
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$TLT $IEF $LQD $US10Y US 10-Year Yields Continue to FallYields on the US-10 Year Treasury continue to head lower, as they approach a multi-year support of 1.426% (blue), a level not seen since July 2016.
"Risk Off" continues to be in play.
SP500 Dividend Yield greater than 10 Year US Bond Yield ... When SP500 dividend yield greater than 10 Year US bond yield, stocks, in general, look cheap on a relative basis ... So as the chart suggests, in this current cycle only, when this happed lead to a long period of a recycle bull market for stocks...
