When does the recession become official?Fed funds rate crossing above the 2 and 10 year yield(s) can give us a pretty good idea...
US02Y trade ideas
Is oil price about to collaps ?The history of US. Oil/$ chart vs US02Y-US10Y chart (inverted) : show that the cude price is lagging the move of the US. spread between 2s/10s. "Is oil price is about to collaps ? or this time is diffrent because of OPEC+ cutts ?"
US 2yr Yield Turning OverThe 2yr yield appears to be rolling over which is bullish for stocks. Have to see if there is a weekly reversal
US02Y is the key for stocks and it has started to drop!This is a 1W time-frame chart, showing the correlation between the U.S. Government Bonds 2 YR Yield and the S&P500 (blue trend-line). Some may perceive the recent 2-month rally on stocks as a coincidence but the US02Y price action shows that it is not and has a direct correlation with it.
The 1W RSI on the US02Y has been falling within a Channel Down since the start of February 2022, while at the same time the actual price has been rising within a Channel Up. That is a technical Bearish Divergence. The same Bearish Divergence was last seen from late January 2018 up until the week of November 05 2018. As shown on the chart this lasted 41 weeks (287 days).
The start of this Bearish Divergence happened when the stock market(S&P500) had an initial pull-back event entering into a year long period of volatility, followed buy an even stronger correction. Once the US02Y started to drop, the stock market bottomed and started rising sustainably (until of course the non-technical black Swan event of COVID).
Right now, we are two weeks past the 41 week (287 days) mark and the US02Y has been dropping for 4 weeks. As mentioned, the stock market has been (aggressively) rising since the October 10 2022 1W candle. The fractals are identical and this could be a repeat of the 2019 rally. Whether we see it extending or not, the US20Y certainly holds the key.
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30min tf shows a C wave sell off on 2yr treasury yieldshort term bullish on the 20yr ETF, based on the 2yr/20yr yields temporary falling...
Treasuries After CPIToday’s cooler readings on inflation and jobless claims were welcome news for stock-market bulls. They could be even more important for the Treasury market.
Today we’re considering the yields of the of two-year (US02Y) and 10-year (TNX) notes.
The two-year shot to a 16-year high above 4.8 percent on November 4 after non-farm payrolls but failed to hold: a shooting star. It’s also noteworthy that the data had a touch of “Goldilocks,” with total jobs and unemployment both higher than forecast. Those headlines, and subsequent lows, potentially confirm the shooting star as a reversal pattern.
There’s also a rising trendline along the lows of August and September that was broken on Thursday. Both events may suggest two-year Treasury yields have peaked.
Next is the weekly chart of 10-year Treasury yields. They touched 4.33 percent in mid-October, the highest level since June 2008. Two inside weekly candles followed, potentially indicating a halt to the uptrend.
These patterns together, combined with the Euro solidly back above parity, could mark a change from the kind of price action that’s characterized most of 2022. It could have a positive impact on broader sentiment if it continues.
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Price Expectations On Point - But Few Expected ThisTraders,
This week we'll have a look at recent price action, current sentiment, and what might be driving these huge pops in the altcoin space.
Stew
75 basis points predicted movepeople are predicting a 75 basis points move yet we need something like 150 lol
Waiting for a 2 -year -old treasury increaseTreasury returns are also expected to increase as the Federal Reserve aggressive rates continue and we are close to a 16 -year peak.
US02Y : The bond market agreesNow this is something interesting. The BOND market seems to accept the slowing down in Fed Rate Hikes by 25bps.
What was previously accepted as per 09/2022 dot plot was 75bps in 11/2022 + 50bps in 12/2022 for a total of 125bps to bring the FRR to 4.50% is now cut SHORT by 25bps. Instead of 4.50%, we may now expect 4.25% by end 2022, which is where it is now hovering.
If the dot plot can get superseded within a month, anything can happen.
Even the FFR Futures seems to be expecting LOWER FFR by the day.
www.investing.com
So the question that remain is ONE, which takes precedent, INFLATION or GDP?
By the way, yesterday, the 10y/03m just got inverted. It seems that a PIVOT may be near. Lets also see if US02Y will FALL below 50MA. This is also another indication a PIVOT may happen.
Yesterday's GDP =2.60% was good news for Dollar but just that it was made up of EXPORT which is clearly not sustainable/real.
Trading the EURUSD just hot harder!!!
Good luck.
P/S : As always, do not just believe what I say. Use your common sense.
2YR Bond Yield Reversal It looks like the 2YR yield is looking to do a reversal. If so that would sustain the rally in stocks. Have to see if it is confirmed on the daily. It looked like a reversal before and then blasted higher.
What happened and what will happen NEXTOK, as you can see, I got to minimize my screen size so that I can fit in the INFLATION line which is way up there ........... lol.
If you have been following the MOVE index, you can see that it was above 150 and notwithstanding the 'leak' by the Fed of 'slowing down the pace' of future rate hikes. Above 150 means the Fed had lost control, hence the need to come out with a statement to calm things down. In the words of its creator, The MOVE at 150 infers interest rate changes of about 9.5bps per day, a volatility that is unsustainable if only because human beings cannot tolerate such stress for long periods of time.
In short, THE BOND MARKET IS IN TROUBLE.
And would you believe that if the Fed were to slow down the pace of rate hikes or even cutting rates will drive down bond yield??? Do not forget there is HIGH INFLATION. If inflation stays high at 8%, who would want to buy FIXED INCOME INVESTMENT aka BONDS. Unless of course the yield is HIGH. If the market perceive that the Fed can't bring down inflation fast enough, would they want to hold on to their bonds? I think the answer is simple.
At the moment, US02Y is sitting around 4.50%. This means the market is still anticipating 75bps and 50bps respectively in 11/2022 and 12/2022.
It was actually above 4.60% just before the news from the Fed got out. It seems that the market is actually looking beyond 4.60%. Also critical was US10Y went above 4.25%.
I would say that US02Y would now be largely driven by INFLATION rather than the FFR. If inflation can't be controlled, it will only go UP.
But I would keep an eye on it in case it falls below 4.40%. This will impact EURUSD. Taking a break from trading is wise until things get clearer.
Good luck.
P/S : As always, do not just believe what I say. Use your common sense.
WOULD WANT TO BUY THE SP500 OR SLEEP AT NIGHT I know most do not like to talk about the 800 lb Gorilla in the room > I said 8% inflation - 6 % tbill on 2 year paper = 2 % inflation . know you see why I said that see 2 yr paper 1980 1982 of what the market and the bond market did . For a clear view see professor WILE E COYOTE and the housing bubble paper
Will 2 yr Yields run to the 1.618?4.791% looks like may be the target of this impulse.
Typically when yields are bullish, Nasdaq/Tech has been bearish.
I am monitoring this level for reversal.
Good Luck
US02Y - DMI & DPO Analysis - Possible bear divergenceThis chart is shareable. This is purely a technical analysis perspective.
Seems the bulls are throttling back their buys. Worth watching.
So I'm neutral here
Use alerts on trend lines and let tradingview work for you!
No need to stare at the charts this way.
2 year yield 5% HANDLE EASYSo we have not had that moment I like to call OMG PUKE please make it stop . But I think the 5 handle would do it
Bearish Divergence on 2 year yieldsBoy do we ever need the 2 year to chill for a bit. MAYBE this is a signal that we are in for a little bit of a rest. US02Y
Where we are now and how much more to goFolks,
It has been a hectic week and I hope a profitable one for those who follow VP + Demand Supply instead of #$%^&**(())!@.
Next Thursday is going to see some BIG moves when the 09/2022 CPI is release.
Let us take a step back and have a look at the overall picture.
Just look at the inflation number and appreciate how HIGH it is. The EFFR is not even halfway there. Looks like there will still be a lot of rate hikes to go before the EFFR meet up with the CPI, probably somewhere around 5.50%. Perhaps then, can inflation be beaten. In the meantime, DJI/SPX/NDX are still clinging on to the SUPPORT zone, hoping things would turn around. But I guess they would be disappointed. There is a BIG chance the US02Y would punch through 4.40 - 4.60% next week. That would be a confirmation that rates will move higher.
Have a wonderful weekend.
P/S : As always, do not just believe what I say. Use your common sense.
2Yr Yield Set to Break HigherUS2yr yield looks like it was just having a temporary retrace before blasting higher. Looks set to break out which will be bearish for stonks.
What happened and what will happen NEXTFolks,
It has been a busy time. It seems FEAR had taken hold and GREED had to take a back seat for the time being. Russia announcement of mobilization moments before FOMC seems to have caused great anxiety. I failed to anticipate the speed of the fall in EURUSD.
As we all know now, the 'increase' in the 09/2022 dot plot is 'smaller' at 1.00%. Market is anticipating another 75bps in 11/2022 and a final 50bps in 12/2022. Probably another 25bps early in 2023. As you can see, we are actually there NOW, near 4.40%. Whatever it is, it seems the US02Y movement UP is taking a breather now. At least some sanity remains. We are now at the crossroad. Now all eyes is on whether it moves UP beyond 4.40%. It if does, we can expect EVERYTHING ELSE to continue FALLING - Stocks, Crypto, FX, Gold etc. The only thing to rise is $$$$$.
There is a REAL risk of a GLOBAL RECESSION coming. Dollar would do well until the Fed Pivot. So we continue to look at US02Y to see if it dips below 50MA.
Good Luck.
P/S : As always, do not just believe what I say. Use your common sense.
