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Trading Plans for THU. 09/07 - Back to the BasicsS&P 500 INDEX MODEL TRADING PLANS for THU. 09/07 As we wrote in our trading plans published yesterday, Wed. 09/06: "In this morning's session so far, markets continue to be listless with the bias sliding towards mildly bearish. Nevertheless, bears need to wait for a confirmation before taking any positional shorts - a daily close below 4450 today might give that confirmation". The index failed to close below 4450 yesterday, but showed continued weakness. The price action in the pre-market session after the Initial Jobless Claims is showing the potential for further weakness to develop. The retail positioning and the retail sentiment reinforce our view for a downward push to follow in the coming days. Rising yields are renewed concern for the bulls. Our models are sporting outright bearish bias for positional trades while the index is below 4470. The index has to close above 4507 for our models to abandon the bearish bias. Aggressive, Intraday Trading Plans: For today, our aggressive intraday models indicate going long on a break above 4490, 4472, 4445, or 4419 with an 8-point trailing stop, and going short on a break below 4488, 4468, 4457, 4442, or 4415 with a 9-point trailing stop.  Models indicate explicit short exits on a break above 4459. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:31am EST 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, #softlanding, #risingyields, #initialjoblessclaims
SP:SPX
by TradersAIDotCom
This chart pattern suggests yields are going higherUS10Y remains in an established uptrend on the daily chart, and Friday's bullish engulfing candle suggests a swing low has formed and more gains are to follow. But having looked back at price action since the April low, we note that prices are yet to break the low of a bullish engulfing candle if it has formed after a pullback or period of consolidation. Granted, there are one or two of those engulfing candles that do not fit the exact description (as an open or close is out be a few ticks, meaning it has not truly engulfed). But we've relaxed the rules to note bullish candles that show clear range expansion over the prior candle. And if that pattern persists, it looks like the 10-year yield (and likely yields across the curve) are at least going to make an attempt to retest or break their cycle highs.
TVC:US10YLong
by CityIndex
3x Inverse TLT ETF: Breaking Out of Descending Broadening WedgeThe Inverse ETF for the 20-Year US Government Bond is currently breaking out of a Descending Broadening Wedge and is looking to go much higher perhaps between the 61.8% and 78.6% retraces which would be about a 500-1,400% percentage gain which also means that longer end bond yields are going much higher. I previously said I would repost this chart after the split so that the numbers would be accurate, and now that split has happened. I have my eyes on the $36 to hold and am currently looking to get some calls for that strike price expiring next year. It's worth noting the Partial-Decline we got before breaking out of the Broadening wedge, which makes it more likely to play out.
AMEX:TMVLong
by RizeSenpai
2
Increasing The DXY Profit Target to $154 From $103The DXY after catching a rally off a 4-Hour Bullish Butterfly, has reached my price target of $103, and if it gets above that zone, then I think the DXY will have plenty of room to make multi-decade highs due to The High Interest Rates, Tightening Credit Conditions, and The Deflation that is now being priced into the US Bond Market. If things go as expected beyond the $103 zone, we will likely have entered into a Harmonic Wave Structure that should take us up to the Macro 0.886 Fibonacci Retrace which sits all the way up at $154 The RSI and PPO are both sitting at the mid point which is an area where it can often go just to reset before making higher highs in price.
TVC:DXYLong
by RizeSenpai
Why Silver stands out.In the ever-evolving landscape of global economics, precious metals like silver, often serve as key indicators and safe havens. This week, we'll explore the factors making silver an interesting prospect in today's market. Current Macroeconomic Indicators: The latest Consumer Price Index (CPI) data indicates a slight increase in the US for July, registering at 3.2%, up from the previous month's 3%. Predictive models from the Reserve Bank of Cleveland suggest an impending rise for the August CPI. Concurrently, the Reserve Bank of Atlanta's GDPNow model projects a rise in GDP figures. Silver, Inflation & GDP: The above becomes important when historical data reveals that significant spikes in silver prices often follow periods of simultaneous rises in GDP and inflation. Notably, in years that saw increases in both indicators, silver recorded gains of 38% and 46% in 2009 and 2020, respectively. Conversely, 2002 saw a modest 2% return. Silver vs. Gold: A measure of relative value between the two major precious metals via the ratio of Silver to Gold, further substantiates the idea of a potential strength in Silver. The ratio is trading just off a trend support-turned-resistance and at the upper end of the symmetrical triangle. Resistance here can play out in the format of silver strengthening relative to gold. Yields and Silver: The longstanding inverted relationship of yield and silver can be observed in the chart, but the ratio provides some insights into the limits of this relationship. What’s immediately obvious to us post 2008 there has been a regime change in this relationship as yield grinded lower and silver remains elevated. With no immediate large catalyst on the horizon, it is likely the current regime will hold and hence, the ‘floor’ in this relationship is near. Meaning relative to current levels of yield, Silver is trading on the lower side. Equities vs ‘real’ economy: Beyond being a precious metal, silver's industrial applications—from automotive to solar panels and electronics manufacturing—make it a bellwether for the 'real' economy, akin to copper. Comparing the Nasdaq 100 against industrial metals illustrates a disparity between equities and the 'real' economy, positioning silver as significantly undervalued relative to peers like copper and gold. Positioning: Current market positions, particularly among net Non-Commercials, seem to favor silver with a growing bullish sentiment. Technical Analysis: A noteworthy observation is the persistence of the 22.5 level as a pivotal support and resistance mark for silver, a trend tracing back to the 80s. Prices currently thread above this level and remain supported by an uptrend that began in August 2022. Additionally, RSI points to oversold, and in the past 4 instances when RSI reached such levels, prices quickly rebounded thereafter. Against the above factors, we see support for Silver, on multiple fronts, such as economic cycle, relative value against equities, and underpriced when compared against gold. Hence, to express our view on Silver, we can set up a long position on the Silver Futures at the current level of 22.67 with a stop at 21.8 and take profit at 25.10 . Silver prices are quoted in U.S. dollars and cents per troy ounce and each 0.005 move is equal to 25 Dollars. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. 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 Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.atlantafed.org www.clevelandfed.org
COMEX:SI1!Long
by inspirante
Yields Prepped to Spike Higher after a Confirmed TLT BreakdownThe TLT has broken down an Ascending Broadening Wedge and given us one Bearish Confirmation back test; now we are looking for a second lower high within the range of the breakdown to truly get convicted on the move. However, for the time being, I do think this chart should be watched, as I have a suspicion that a lot of the shorter- and midterm bond yields are going to spike higher along with the US Dollar for reasons I already explained in this post here:
NASDAQ:TLTShort
by RizeSenpai
2
The Overnight Reverse Repo Facility Looks to be Bottoming OutMoney that has been parked at the Fed's Reverse Repo Facility due to the attractively high interest rates the Fed has set for money parked there has been on a steady decline since late 2022, and recently, this year we confirmed a breakdown of a Bearish Dragon, which led to a BAMM move down to complete a Harmonic M-shape. This then represented an influx of liquidity exiting the facility and effectively hitting circulation, which led to that money chasing assets and commodities. This chasing of assets and commdoities effecctively backed the 2023 Stock Market Rally. The target I had set for this move was down to the 0.886 of a Bullish Bat and now months later we can see that we came very close to it, but it would seem that rather than getting a full 0.886 retrace we are instead getting a confirmation-styled RSI reaction as price Bounces from the 1.618 Extension, which just so happens to align with an AB=CD formation it's made on the way down. I see this as an indication that the liquidity will soon stop flowing out from the facility and that liquidity will now begin to flow back to the facility, effectively taking money out of circulation, which would likely result in a decline in asset prices and a decline in the trading of Short Term Debt on the open market, which could then lead to Short Term Yields rising overall along with the US Dollar as institutions once again begin to lock up their dollars in this facility and chase yield rather than assets. Recently, I have been seeing a lot of weakness in the banking sector. That weakness may act as a catalyst for these institutions to once again park their money with the Fed, just as it did before. As always, my target for an ABCD is back to the Level of C, so we should see this rising back up about 30% before we can start looking for signs of this topping out again.
FRED:RRPONTSYDLong
by RizeSenpai
2
Bonds rolling over but what's up with $TNX?#Bond #yield has been moving well lately, but today. SO FAR, they're rolling over, and some hurting more than others. We've mentioned that steam has been running out for some time. Look @ the RSI negative divergence on almost all of the #yields 6M weakening. 1Yr RSI CRATERING. 2YR hurting & RSI DECIMATED It is at major support. TVC:TNX is the lone wolf. Must keep👀on this one to see how it plays out. See data posted. Did the 10Yr peak already?
TVC:TNX
by ROYAL_OAK_INC
2
How to position for yield curve un-inversions!It has been some time since we delved into the intricate world of interest rates and their prospective trajectories. With the yield curve experiencing significant movement in recent weeks, it's high time we reassess our stance. Following a staggering 500 basis points increase, we now find ourselves potentially nearer to the end of the rate hike cycle than ever before. The recent hawkish pause announced in the last meeting has left market participants on tenterhooks, pondering the future course of action in the ongoing battle against inflation. Given the downward trend in inflation and the possibility of at least one more rate hike, 'real' yields have ascended beyond the 0% level, as depicted in the chart above. Since the 2010s, real yields have consistently struggled to surpass the 1.2% level. However, the recent lower inflation prints place the 'real' yield at a new decade high of 1.25%. So, how does the yield curve inversion behave during periods of real yields? Interestingly, in three of the past four instances, the curve 'un-inverted' once real yields exceeded 0. Of greater significance is the yield curve's response after the Fed cuts rates. Since 1989, this has been a key signal of the yield curve un-inversion. Given this event's proximity and the current 2Y-10Y yield curve, we contemplate the optimal strategy to capitalize on this likely un-inversion. One approach is to examine all possible inversion combinations between the 2, 5, 10, and 30-year yields. All these combinations present an inverted curve, except for the 10Y-30Y segment. Upon dissecting the analysis to focus solely on 2-year inversions, we observe the following: The 2-year inversion is generally the steepest, with the 2Y-10Y ranking as the most inverted segment of the yield curve. All inversions anchored with the 2Y are at their all-time highs, plunging us into uncharted waters. In contrast, the 5-year and 10-year yields exhibit more subdued movements. Their inversions have yet to reach all-time highs, and the overall range of movement is relatively restrained. Therefore, to maximize returns on the un-inversion move, one could position to short either the most inverted section of the curve, the 2Y-10Y, or the 2Y-30Y, which typically experiences the largest movement upon un-inversion. Handily, CME has the Micro Treasury Yield Futures, quoted in yield terms, which allows us to express this view in a straightforward manner allaying the complications with DV01 calculation. By creating a short yield spread position, we are not merely speculating on the direction of individual yields but rather on the relative movement between them. Trading the yield spread instead of just an outright position in a single part of the curve also protects us from parallel shifts in the yield curve, especially in volatile times like these. This strategy takes advantage of the yield curve dynamics, particularly the inversion trend we've been observing. We create the short yield spread position by taking a short position in the Micro 2-Yr Yield Futures and a long position in the Micro 10-Yr Yield Futures or Micro 30-Yr Yield Futures to express the curve un-inversion view, with 1 basis point move equal to 10 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. 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 Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com www.cmegroup.com
TVC:US02YShort
by inspirante
Bond Yield Inversion vs. SPXThis is nothing new, really. People who have been in markets long enough know that when short term bond yields (3 month and 2 year, for example) come up to meet and invert to a higher yield than longer term bonds (like the 10 year, 30 year etc) that it often precedes a large market sell off as well as a recession that affects most everyone, not just stock prices. On this graph, I maybe got a little carried away. I have the 1 month, 3 month, 1 year, 2 year, 10 year and 30 year as well as the actual Fed Funds rate with SPX in the background. This goes back to the mid 1990s, you can see the dotcom boom, you see the yields invert, SPX tops and then takes near 3 years to finally find bottom before reversing course. Unfortunately for long only stock holders, the treasury yields started to climb with stocks as well until they inverted in 2007 once more. Stocks started to come down, and, well, then 2008 happened... You can see that in general, the fed funds and the shorter term yields find a plateau at their top, tend to stay there for awhile (sometimes for a whole year), then as they start to come back down, the stock market tends to be near its highs, and then the stock market starts to come down. Big money tends to see higher treasury yields as a safer haven for their money than stocks at this point. If you have the ability to hold the treasury to expiration, you're guaranteed to get 100% of the money back plus whatever the yield % was at time of purchase as interest paid to you by the government. Furthermore, there is an inverse relationship between bond yield percentage going up, and the value of bonds on the open market. As yields go up, the value of bonds goes down. Vice versa, as yields start to retract, bond values go up. So, there is high incentive to start buying a lot of bonds as the rates plateau near the top. Maybe some of these large hedges start to sell some equities as a hedge and buy more bonds as we get to that point. Rebalance their portfolio to be more bond-heavy. Higher short term yields, higher fed funds rate also generally mean that the cost to borrow money for anyone is higher. Higher interest rates means more money out of the pocket of anyone borrowing to pay interest. Bonds themselves are just government debt. The stock market is generally forward looking, so it's often making moves in response to moves in the bond market before main street really starts to feel the effects of the tightening in a meaningful sense. As time has gone on, it seems the market is reacting earlier and earlier to rate hike cycles. Take 2018 for example, the yields didn't really invert until they all were already on their way back down. 2018 had volmeggedon to deal with to start the year, then came back, set a new high, then had a very rough second half of the year as bond yields plateaued. But, as the market saw that this small rate hike cycle didn't do any meaningful harm to the economy and started retracting, stocks took off again: Then COVID happened, yields plummet, cost to borrow was as cheap as it ever has been, the government pumped money everywhere to try and prevent a complete collapse of everything, stocks were off to the races harder than ever before after finding bottom just a few weeks into the pandemic. But, mentioning the market kind-of getting ahead of itself again, we had all of 2022, as it became apparent that inflation was now raging and bigger rate hikes than we've seen since the Great Financial Crisis would be necessary, the stock market sold off despite the economy still showing very solid recovery out of the pandemic. But now, treasury yields are still climbing, but so are stocks. Treasuries hit a little hiccup in March as a couple regional banks were found to be overlevered in treasuries that had too low of a yield, and as more people began withdrawing money and those banks needed liquidity, they had to sell those treasuries at a loss. If they didn't have to come up with that liquidity and were able to allow those treasuries to mature, they make that small percent of interest for holding them. But because they were forced to sell them as treasury values were at a low because they had inadequate liquidity to cover deposits being withdrawn. But, now maybe surprisingly, despite some of the troubles and the market sell off for most of 2022, we're now not all that far off of CBOE:SPX 's highs from the end of 2021, start of 2022. But, we still don't know what the full effect of the current high interest rates are going to be. It's possible the old mechanism where when we finally reach the top for interest rates, right as we get the precipice of rates starting to fall, equities top out and start to sell off shortly thereafter again. For how big and how long? Who knows. Despite the recent 'skip' from the federal reserve, opting to not hike at the June meeting, the 3 month yield, which typically is what most closely matches/leads what the fed is going to hike to, has in recent days made it look increasingly likely that we see at least a quarter point hike for July. The market probably won't like that news, maybe we get a few red days, but if economy data coming in still looks solid and inflation is showing a slow, steady reduction, it may not be long before the market decides to go back up again. We might even go past the 2021/early 2022 highs this year. But, eventually, we'll find the top for yields, and I have a feeling a bigger correction for stocks will loom at that point. For right now, seems like a bad idea to go against the bulls. But, keep an eye out for when we finally reach the top in treasury yields, look in particular for the 3 month, fed funds and the 2 year to go sideways. Once all 3 start to go down, pay closer attention to economic data coming in. Also take a look at www.tradingview.com for evidence of lower highs off the lowest point for the current cycle. You see the combination of the two, we may be in for a big correction. Again.
TVC:US03MY
by dieseldub