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Jobless Claims Rise on Thursday, Markets on EdgeGlobal futures are mixed on Wednesday morning, while the US majors are extending losses, after an ugly session yesterday, which saw the Nasdaq (QQQ) lose the critical neckline, after losing the 50 day MA earlier on in the week. The SPY is poised to open at the 50 day MA around 380.70, which has acted as strong support as recently as Jan 29th. If we see a break below the 50 day MA today, we could be looking at massive downside to the Jan 29th low of around 368, which is sitting just above the 100 day MA (367.24). If we see a strong bounce off of, I don't know, more jawboning by Powell today maybe, we may see another test of the 21 day EMA at 385.77. In volatility, we saw the Vix catch a nice bid off of yesterday's weakness to a 27 handle, and as I mentioned in our live analysis, the Vix is on course for another spike in the immediate term, potentially to the 37 level, or higher. We'll have to closely monitor the remarks by Powell, and the media narratives around the stimulus as well. On the data front, Jobless Claims came in hot with 745k claims vs the 725k expected. But, continuing claims fell to 4.29 Million from 4.42 Million last week. No notable response by markets as yet, but wait for the open, and we should get a better sense of sentiment. I wish the Put/Call would give an indication of a shift in sentiment, but it appears to be skewed perpetually. With the 10Y yield at 1.47% and holding firm, we really shouldn't be seeing a sharp risk on move like the one we saw on Monday, but rather a cautious tone in anticipation of a disappointment from Powell's speech. If we get talk of YCC, and Powell says he's going to start buying long dated treasuries to keep rates low (changing the rules on bears again), I'll hit the fucking roof. Best of luck out there today guys, and trade safe. Our live analysis begins at 9:30AM. Cheers, Michael. *I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
12
Global Futures Tank on Yield SpookUS Markets traded relatively flat in the overnight session, with European and Asian markets getting clobbered. The FTSE 100 was down 1.75%, with CAC 40 seeing a 1% sell-off. The Hang Seng was down by as much as 4%, while Japan's Nikkei 225 saw a 2.7% drop. I think it goes without saying that yields across the globe are rising, particularly on the long end of the curve, and after yesterday's insane rally in the US 10Y yield to 1.563%. The US 10Y yield saw some light selling this morning back to a 1.46% handle, but is looking poised to rally higher. YCC is being tested specifically in Australia and Japan, as key benchmark yields cross YCC thresholds. YCC not working? Although, I would say, many investment banks are talking about buy the dippers coming out to take advantage of the anticipated interim short covering. I don't see that happening, as I think yields are now getting started, and US Treasuries are still overvalued. In volatility, after a slow start to the day yesterday, Vix caught a massive bid as we approached the afternoon session, and again at the close of trade. We spiked as high as a 31 handle, before cooling back to 29. We're currently sitting around 28 in premarket trade, and looking poised to go higher, particularly if global sentiment is any indication of today's price action. I'm holding my UVXY, and HUV until I see a major correction in risk assets. Absent a spike to 40's, I'll remain long Vix (barring a material improvement in the outlook for risk). The Dollar (DXY) is extending gains today after a strong performance yesterday. We opened down at an 89 handle, but were quickly bid as yields spiked and risk got sold heavily. The neckline (90.75) acted as resistance this morning, with the 50 day MA (90.37), now acting as support. If we get a continuation of yesterday's selling, we may see a dollar breakout back near the early February highs around 91.50. On SPY, we have heavy resistance overhead with the lower band of the green ascending channel standing in the way of the bulls, as well as the 21 day EMA at 386.38. Major support sitting at the 50 day MA (379.50), which we've yet to retest this month. On the hourly, we have resistance at the 200MA just overhead, around 384.90. As we speak, we're seeing bullish price action and appear poised to test resistance levels on the open. Finally, on the data front, we saw Personal Income rise 10% vs 9.7% expected, and Personal Spending coming in at 2.4% vs 2.3% expected. PCE and core PCE both came in at 0.3%, vs prior prints of 0.4% and 0.3% respectvely. The trade balance stayed consistent at -$83.7B vs the previous print of -$83.2B. Retail Inventories fell slightly by -0.6% vs the prior print of 1.9%, with wholesale Inventories rising by 1.3% vs 0.5% prior. Chicago PMI is out at 9:45AM, with consumer sentiment out at 10AM. Best of luck out there today, my friends! You guys know where to find our live daily analysis. Cheers, Michael. *I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
6
Are we Finally About to See a (Real) Correction?Well, well, well. The 10Y yield clipped 1.466% on Thursday morning, after spiking yesterday to 1.39%. As a reminder, according to Nomura, the 1.50% level is a CTA short trigger level, and could have a major negative impact on equity prices if breached. On top of that, we have several investment banks watching the 2% level, where, Morgan Stanley in particular, sees upwards of a 22% correction possible on the Nasdaq. We're seeing strong flows into Financials off the back of the recent bond market weakness, as well as notable strength in Energy, off the back of higher crude prices. We just saw initial claims come in at 730k vs the 820k estimate. Continuing claims hit 4.41 million, vs the prior print of 4.52 million. Durable Goods came in at 3.4% vs the 1.2% expected, with ex-transportation at 1.4% vs the expected 0.6%. Finally, Q4 GDP came in at 4.1% as expected. Pending home sales figures are out at 10AM. For those of you who missed the GME, and other "most shorted stocks" explosion of up to 300%+ yesterday, like me, just remember that what goes up, must come down, and there are many ways to profit from this type of volatility. One thing I wouldn't want to be, at any point, is long GME, or AMC. Futures are trading in the red this morning, with the S&P down around 0.40%, the Russell flat, and the Nasdaq down around 1%. No real surprises to write home about after yesterday's garbage rhetoric from Powell, who mentioned as many times as possible (in my words), that the Fed's favorite game to play is to spoon feed Wall Street, while Main Street learns to wipe their asses with the US Dollar. With Vix back at nose bleed levels this morning (22.50), and stocks back near ATH's, it's time to reassess the outlook for the next 12 months, minimum. Imagine subscribing to the current level of implied equity risk, with next to no return as the likely reward. What's the best reason to be long equities right now? Inflation? Economic recovery? Vaccines? Hope? It sure isn't for the potential upside, or attractive risk/reward. Maybe notwithstanding the rise in yields, most traders still think NIRP is on the way. We'll find out soon enough, I guess. Re my positions: Although my UVXY position is down around 25% at the moment, I'd still rather hold Vix, than be long equities or cash. With the upside in Vix near infinity, and the downside limited with lingering uncertainty, Vix is by far my favorite play right now. Call me crazy... *I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
40
Stunning! 1.34% is the Next StopBack on Dec 1 when we initially discussed the possibility that the bond market was poised for a correction/crash, we didnt anticipate this as a stairs up move with the 10Y on the verge of breaking .90% and approaching the 1% mark. However, the rise since August has been persistent, and we're now approaching the 100MA (w) around 1.34%. When credit markets do break, the move to 1.5% is going to be a quick one. Equity markets aren't going to be happy...
TVC:US10YLong
by Hedge_Of_The_World
4
12 Days of Gains, It's Like Christmas!Global markets are simply unstoppable at the moment. According to Zero Hedge, the MSCI World index just saw it's longest winning streak in 17 years, having risen for the past 12 days in a row. Jerry must be dancing naked in front of the mirror every morning without fail. What a clown. The US majors were up around half a percent on Tuesday morning, with the scent of optimism in the air, and with the hint of more free money on the horizon, retail investors are straight up sativa high. The 10Y yield continues to march higher, and the FED now has a serious problem on it's hands. Will we see YCC as soon as this month? We kissed a 1.26% handle earlier in the session, and the long end of the curve is now clearly on the run. The 30Y yield hit a new 12 month high of 2.078%, and has broken through the 100MA (w) at 1.94%. If the 30 runs to the 200MA (w), we'll be looking at a yield of just under 2.5%. That's a game changer imo. The US dollar (DXY) is seeing some notable action, we're up from 90.13 and now sitting around 90.55. The neckline is sitting just above us around 90.75. The Vix is catching some much needed support around the post March crash low's. We're poised to open around 21.50, after hitting a low of 20 on Friday. When this beast really wakes up, we'll be looking at a 40 handle before we can blink. I'm definitely sticking around for the show. On another note, in crypto, Bitcoin hit a new ATH above 50k. Wowzers. Crypto anyone? On SPY, we're set to open around 394, with the upper band of the channel acting as resistance (even though we may gap above on the open). We have the 21EMA (h) just below the channel band at 390.50, then the 21EMA (d) at 383.67. We're looking at a daily RSI of 66, and an hourly RSI of 67. There's definitely room to run if the bulls so choose, but the reality is we're in the stratosphere, where next to no one is participating. The oxygen levels are low, and the bulls are high as a kite. The name of the game right now is patience. Thanks for your time today guys, and I hope you enjoyed the analysis. Stick around for our live analysis to begin shortly. Cheers! Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
5
11 Days of Gains? What Planet...Global markets continue to march higher, as every last short position in the world of trading is squeezed to death in seemingly coordinated fashion. While large HF's continue to frontrun retail orderflow, they'll continue to know exactly what retail traders are doing at every moment, and how to take full advantage on the way up, and on the way down with their close proximity to the exchanges, and their HFT algos. Where are the regulators you ask? We'll have to see how much of what's really going on is even discussed in the financial media, or in congress over the next couple weeks. I imagine they'll all act like it had nothing to do with market makers, or frontrunning at all. Maybe they'll even blame the retail traders to protect Wall Street. It's amazing what politicians will do to protect their wealthy donors. As the US majors hit new ATH's, yields continue to rise. The 10Y yield hit a new 11 month high at 1.218% today, and we're looking poised to test the 100MA (w), sitting at 1.355%, as early as this week. As the risk free rate approaches the 2% level, we'll begin to see notable pressure on equity prices according to Morgan Stanley, with the Nasdaq at risk of a 22% correction, and the S&P at risk of an 18% correction. This report was a couple months ago, so I imagine the downside has increased since then, as we're now at new ATH's. It seems like markets will never crash, but that's simply not the case. Markets will correct, and maybe even crash. When it happens I won't say I told you so, but I also won't be remotely surprised. What I'll be doing is holding a fat cheque. The Vix is testing the post March low again, and we're looking at a sub 20's open for the first time since November, when we had that relentless short squeeze bonanza/gap parade. I recently read that long positioning in the Vix is currently in the 95th percentile, while short positioning is back to pre-march crash levels. It's no secret that HF's and the Fed themselves are short Vix. Jerome Powell himself said in 2012, that the Fed has a short position in Vix. So when we feel like we're directly fighting the Fed and market makers when we go long Vix, it's because we are. I'm still holding all of my positions, and have no intention of closing them anytime soon for those who might be wondering. If we see further weakness in the Vix, my strategy is to day trade leveraged longs with tight stops, to cushion my premiums. You guys will be the first to know how and when I begin to work my position. It's Family Day up here in Ontario, so I'll be running some errands, and continuing the weekend festivities with my wife and cats. I'll be back tomorrow with my usual live analysis. Good luck out there today, my friends! Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
TVC:US10YShort
by Hedge_Of_The_World
5
Referee!After a choppy day yesterday, which looked nothing like efficient price action to me, US Futures melted up from around 1AM. We saw some weakness earlier on in the session, but the losses were quickly reversed, just as they were in the cash market. We're currently trading near all-time high's once agian, as a busy earnings week continues with Microsoft and AMD reporting after the closing bell. European markets were notably higher this morning as well, after a rough day yesterday, with Asian markets trading mixed. What changed, why the reversal in sentiment today? Central Banks. After rallying hard yesterday, and hitting a 26 handle, Vix is back in the dumps with a 22 handle this morning. The name of the game is crush volatility at all costs, and whatever happens to price action, and price discovery as a result, is nobody's problem. The dollar caught a bid yesterday and briefly broke above the longterm descending trendline, but we saw another solid rejection with conviction. We also saw the 10Y Treasury yield tank back to the 21 day EMA level (1.05%), after a strong 2Y auction saw $60 Billion in paper trade at a low yield of 0.125%. Gold remains relatively flat at $1,855/oz, and crypto is taking a beating with Bitcoin back at a $31k handle, and Ether down 10% to $1,275. We'll see Consumer Confidence roll in around 10AM, which should give us a better sense of how Main Street is feeling after what I expect was a busy and expensive Christmas shopping season. SPY is set to open at the top of the recent range, and has yet again, blown out all of the resistance levels sitting overhead. These overnight gap ups, while everyone is asleep, seem so one sided to me. If this was a game, and everytime the other team scored, the referee sent them to the bench to sleep, so the other team could score, we simply wouldn't watch that game. Well, welcome to the markets, and let's all hope this insane ponzi ends soon so we can go back to the game we all love so much. Having said that, we are at the top of the range again, and at the ATH, so I expect to see further selling today, off the back of yesterday's negative sentiment, and volatility. Let's see how the cookie crumbles today. As I've said before, the only way to prepare for trading this market, is to expect the unexpected. Thanks for your time today guys, I hope you enjoyed the analysis. Stay tuned for our live play-by-play to begin shortly! Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
12
Global Futures Point to an Ugly Friday SessionGlobal Futures traded lower on Friday morning, as Biden's "rescue" proposal disappointed investors, as it fell short of infinity at $1.9 Trillion. When that $1,400 is spent in a month, what next? Chair Powell mentioned yesterday that there was a possibility of rate hikes in the future and a tightening of monetary policy (room for a change in policy), but that it might not happen for a few years. Regardless, yields spiked on the remarks, and continued to rally into yesterday's close, with the 10Y yield now sitting around 1.09%, after testing a session high of around 1.135%. The dollar continues it's march higher, with the Inverse HS pattern, looking like a real possibility in the near term. We'll be keeping a close eye on the dollar and the 10Y yield. SPY is off the overnight lows, but is poised to open below the key 21EMA on the hourly, and also the 50MA (h). Our first target, should we see further downside today, is the 100MA (h) around 374.72, then the 21 day EMA at 373.37. If we lose the 21 day EMA, the lower band of the white ascending channel is in play (368), with the top of the Megaphone sitting just below, around 361. Vix is back at a 24 handle, and refuses to break below it's ascending trendline, now sitting around 21.60. We tested these levels yesterday, before a notable spike in vol into the close. Retail sales came in weaker than expected this morning, with a -0.7% print, and Retail Sales ex-auto, coming in at -1.4%. This is off the back of weak restaurant spending due to lockdowns, and a drop in online spending. Capacity utilization is still high at 74.5%, which is shocking to me. The government/FED must be picking up half the productivity tab. Gold is tanking as crypto becomes the new favorite hedge against inflation, and continued whacky monetary policy. However, Bitcoin is still notably off it's high's, and is now sitting around 37K. In other news, JP Morgan saw an approx. 40% increase in profit in the last quarter. No big surprise there, as Wall Street has been the primary beneficiary from this entire spending, and printing binge. I suspect we'll continue to see bank earnings roll in, surprising to the upside. Thanks for your time today guys! If you enjoyed the analysis, please check out the Hedge of the World website for our live daily play-by-play of markets. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
34
Will More Stimulus Save the Economy?Futures traded sideways again in the overnight session, and have been stuck in a tight range since last week Friday, when we saw a nasty payrolls print. This morning's jobless claims came in ugly with 965K new claims, the highest level since August, and 5.271MM continuing claims, a rare rise from last weeks 5.072MM. Import and Export prices came in higher than expected at 0.9% vs 0.2% prior, and 1.1% vs. 0.7% prior, respectively. The Biden Administration will be releasing it's economic plan today, along with a new stimulus proposal, which is rumoured to be "in the Trillions." The "leaked" number is apparently $2 Trillion, which as far as I'm concerned may have a positive impact on sentiment, but is a drop in the GDP bucket. I have no doubt in my mind that unless inflation takes off like a rocket, we're going to see a massive disappointment in GDP. Perhaps the ultra-leveraged robinhood crowd will use this new money to take the S&P to 4000, where they'll have their hand out again for another round of stimulus. I've never seen institutionalized ponzi schemes like this before. But, hey, if the FED does it, why can't everyone, right? What a farce. SPY is sitting just above the 21EMA on the hourly, which has provided strong support over the past week or so, but it would appear that if the 378 level breaks, we may retest the lower band of the white channel, which is sitting around 368. That's my target for the end of the week, and I'll be watching Vix for signs of continued support at the lower ascending trendline, just as we saw yesterday after we fell to a 21 handle. Having said that, the all-time high is an arms length away, and with Biden about to drop a bombshell proposal with Trillions in free money, markets may very well make new high's before we see any notable correction. Risk protection has never been cheaper imo, so trade accordingly. Thanks for your time today guys! If you enjoyed the analysis, join us over at the Hedge of the World website (link in profile), for our live daily play-by-play of markets.
AMEX:SPYShort
by Hedge_Of_The_World
33
10Y Yield Under Pressure From Strong Auction DemandThe risk free rate took a breather yesterday, and then again today, as (yesterday) the 10Y auction was a smash success, followed by a near record 30Y auction today. We saw $38 Billion in demand in the 10Y auction, driving yields lower, toward the 1.11% level. Then after the 30Y auction today, the 10Y yield was hammered back to 1.08%. Members of the FED made their rounds in the MSM, convincing market participants that the FED had no intention of tapering asset purchases, nor did they see the need to hike rates in the near term. Let's see how things progress as the YCC (yield curve control) conversation becomes the focus on trading desks everywhere. When will the FED institutionalize YCC? Could be as early as the next meeting on Jan 26th. But, I highly doubt they'll admit, yet again, to the world, that everything they've done, hasn't worked. Then again, I've been wrong before. who knew you could just simply change every rule in the book. I digress. Thanks for your time today guys! If you enjoyed the analysis, please like and subscribe our profile, and also visit us at the Hedge of the World website (link in profile), where we do, in-depth, live daily analysis of markets.
TVC:US10YLong
by Hedge_Of_The_World
7
Futures Flat, Rates up to BatUS futures traded sideways in the overnight session, as investors took in the view, and breathed in the thin air from the top of Mount Everest. We saw a light sell off yesterday, which was relentlessly bought into, and the moral of the story was this: bulls were able to successfully defend the 21EMA on the hourly at the open, throughout the day, and again at the close. The status quo projection by market participants, is that the Biden Administration is about to release a colossal stimulus proposal, which could potentially make the recent one seem like a weekly allowance. The truth is, Biden previously said he plans to raise taxes, and may even implement a wealth tax to fund much of his incredibly expensive plans. But, how does that make any sense if he plans to also cheer on the FED as they continue to debase the dollar, while growing the fiscal deficit even further? Why tax anyone, ever again, if you can just print new money constantly, and borrow even more if need be? European markets traded down in the overnight session, as many european nations continue to struggle with COVID-19, and the effects of lockdowns on the economy. Bitcoin bounced back immensely from a 32K handle back to 36k, no surprise there. The 10Y yield is skyrocketing (seemingly unnoticed), and hit a high of 1.175% overnight. We've discussed what the implications of this move might be, and where rates may be heading next. For those of you who haven't been following, the 10Y yield is now up 130% since the beginning of August. Having said that, there's a possibiliy the FED may continue to change the rules of the game, and institute yield curve control (YCC) in the near future, to continue to artificially suppress rates. The mere fact that everything they've done to this point, hasn't worked, is no surprise to me. How could they have solved any (real) economic problems, when they're implementing solutions that simply aren't effective for main street? According to Nomura, CTA's could turn short US Treasuries at any moment, due to the fact that we've now breached the key 1.10% level. This would result in a market correction of about 20% according to analyst projections at Morgan Stanley. We've been seeing downward pressure in the bond market in recent months, as the mere mention of tapering asset purchases by members of the FED, spooked bond investors. The dollar has held onto a 90 handle overnight, but is seeing some pressure here as the base case remains to be further dollar debasement. Oil is rallying hard, and is back to 10 month high's as of this morning, and we're now back at a 53 handle. We may see some pressure in oil markets as the week progresses, due to the anticipation of shrinking demand, and Exxon apparently finding a new massive reserve in Guyana. Gold is looking awfully toppy, and we're seeing a clear reversal on the monthly candle, with both the MACD, and RSI rolling over. SPY is back at the 21EMA on the hourly, and looking weak as we approach the open. The weakness could be attributed to the circulation of a new report by Goldman discussing the rise in real rates, and it's potential impact on equity prices. Trade accordingly!
AMEX:SPYShort
by Hedge_Of_The_World
12
Next Stop on the 10Y Yield Train: 1.41%I've been hearing from many of my colleagues, most of whom are experienced traders, that rates are not going to rise anytime soon. 2023, 2024, 2025, all common projections for when rates will rise. Yet, we've observed the 10Y yield rising a whopping 120% since the beginning of August, to 1.13% today. Morgan Stanley said in a recent report, which I've mentioned in some of my other analysis, that the Nasdaq could be in for a 22% correction if the 10Y hits 2%. If the prospect of rising rates doesn't have traders and investors hedging their risk, nothing will. Trade accordingly.
TVC:US10YLong
by Hedge_Of_The_World
24
Airplane ModeStocks are irrationally exuberant again this morning after soaring in the overnight session as tensions at the Capitol subside, and Biden is (finally) declared the victor of the election. Is anyone surprised to see another gap up this morning? I'm certainly not, but I do suspect that as we approach the top of the white channel around 378, which is an arms length away from the ATH, we'll see some heavy selling from smart money, who have not participated in the market rally since November. Don't forget that much of the rally coincided with a stark rise in M1, which rolled over into December's price action. Now that the very last few dollars of American's savings have been invested/spent, the only buyers left are corporations and the central banks. I'm not sure if you guys follow the global bond market, but approx. $13 Trillion is about to mature, which could lead to a cascade of defaults across bond markets. We're already seeing a spike in the risk free rate above 1% for the first time since March, which is only going to exacerbate the issue as CTA's begin to sell, and they may even potentially go short if yields continue to rise. According to a recent report by Morgan Stanley, if the 10Y yield rises another 1%, (from 1% to 2%), this could have a direct impact on market valuations (up to a 22% drop in multiples {PE} on the Nasdaq in particular). In other words, the 10Y yield could be signaling to investors, that an imminent market crash is coming. Having said that, we all have to be prepared for the fact that the FED might step in, like they always do, and change the rules of the game. In the jobs market, we saw another 790k American's file for unemployment benefits for the first time last week, while continuing claims remain above 5MM. The moral of this story will be that misallocated capital does not fuel productivity in the real economy. It debases the currency, and hence the purchasing power of the working class, while only the asset owning class benefits from the induced inflation-like consequences. Interestingly, the velocity of money is little affected by the current monetary debasement regime. If we were to focus on debt levels, for example, we'll immediately free up productive capital, and increase the velocity of money, leading to (actual) inflation, by the FED's metrics. But hey, what do I know, I'm just a trader. Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
56
A "surge" in yieldsWord on the street is that real rates are surging. SURGING, I tell you!! The financial press gets caught up in the moment, swept along in the excitement, elation, and fear of any directional market move. During such times, it is especially valuable to step back, look at the bigger picture, and ascertain if the long-term prevailing trend is at risk of a breakout or reversal. Take the US 10-year yield: Looking at a monthly chart, we see 40 years of a very clear downward trend. That "surge"? Well, look for yourself. Barring something as extreme as China throwing a firesale on US paper, I expect this trend to continue for quite a while longer. There is a lower bound to yields, but that bound is continually being pushed lower as rates are cut, other central banks foray into negative rates, and investors/funds begin seeking the 'least-worst' store of value. This demand shift pushing the lower bound lower is what has formed the lower bound of the downward trend channel on the chart. I'm dubious about this 'reflation trade' story: The search for yield, and even simply 'least-worst' store of value is the prevailing force in this market. US treasury yields can only outperform so far in the broader market of debt instruments before they attract more buyers. Negative rates in other nations have intensified this effect. This behavior forms the upper bound of our downward trend channel. Perhaps we'll see by the end of December if this "surge" is an actual SURGE. For myself, I will be respecting the strength of this 40 year trend, and expecting any strong upward move in yields to only tag the upper bound of the channel, (if even that far), before reversing to the downside.
TVC:US10Y
by iamroot
3
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!
TVC:US10YLong
by ridethepig
3
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!
TVC:US10YLong
by ridethepig
3