Where is 10Year Going? Supply and Demand ZonesWe have couple of supply zones above current price but also big strong Daily Demand zone below so...
after drop to demand there is a big chance to rally up to supply zone and even further
keep these number is your mind ;))
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10year
The correlation: Bond yields indicate SPX CORRECTIONUS treasury yields and the S&P 500 have a positive correlation. The two usually move lockstep to a certain degree and when they diverge, they don't stay divergent for too long.
This time, however, at the beginning of 2019, the divergence occurred and has continued for nearly 12 months now.
The idea behind the correlation is that bond prices are typically inverse to the equity prices, due to the yield of bonds being related to the SPX.
From darkest blue to lightest: 30-year yield, 10-year, 5-year.
The area at which the divergence began, the S&P 500 gained over 25% while bonds fell about 35%. This leaves us with three alternatives.
1. The S&P 500 corrects 50% to catch down with the bond yields (least likely)
2. Bond Yields for the 30, 10 & 5Year all rally 50% (not likely)
3. The two meet somewhere in the middle. Meaning bond yields rally 15-25% or so, while the S&P 500 drops 10-15%. (a most likely scenario)
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
Macro Bond/Index RelationshipCouple things to note:
1. When the yield curve hits the bottom trend line, stocks have performed poorly in the following years.
2. When the yield curve is low and near the bottom trend line, the moving average crossover has been a good signal of an impending stock market peak within 5-8 months.
United States Headed Towards A Recession? The ten year yield peaks about 6 months to 14 months before two consecutive quarters of negative growth (a technical recession). Right now, from our peak in this current cycle we are 6 months divorced from a peak in the yield. Moreover, 3 year over 10 year yields inverted recently a signal that a recession is in the not too distant future. However, massive stimulus in the form of quantitative easing has significantly pushed down the 10 year yield distorting this market. Moreover, the 3 year over 10 year only inverted for around five trading days and is no longer inverted whereas the same ratio inverted for several months in 2000 and 2007. Overall, we are probably not going to see recession from Q2 into Q3 of 2019, but it is in our future whether its later this year or 2021.
DE10Y / D1 : already showing signs of upward trending to come.We may show some short term demand on bonds because of equities volatility that I already expect. But I think anyway the EU bond market will remain under the bigger catalyst that this market will have to forecast new prices to settle to after ECB will pull out in december.
My trading plan here is to remain bullish on the december future expiration and buying all interesting pullbacks.
Hope this idea will inspire some of you !
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Phil
TNX: 10 Year Treasury Note: Longer Term Outlook10 Year T Note TNX
'Nothing trends like long term rates' is perhaps one of the oldest stock market adages there is, along with 'buy the rumor, sell the event'...
Things don't change much because people don't change much at the core, beneath the veneer.
Fear and greed affect us just the same way that they affected our fathers and grandfathers, pretty much. The patterns we make are pretty similar too. Just the time factor changes - making fractal patterns that we see repeating in almost all markets at different points in time.
The 10 year T Note is proably the daddy of all charts, beating even Google for power and ultimate dominance.
No trend is as powerful and long lasting as this one.
8 or 9 major waves down over 31 years took the 10Y from a high at 158 to a low at 13.95.
It then doubled in price and more to 30.75 before falling away again to make a good double bottom/loss of downside momentum 4 years later (mid 2016 low).
Since the double bottom it's rallied back to the same levels at 30.75 as it touched the upper parallel at the same point in time.
This is a key level as the chart shows.
The trend is turning back up. The President, no matter how much he dislikes the trend here, cannot stop it.
Eventually it's going to break the upper parellel and start its ascent to 39.15 initially and then 52.4.
The trend is unlikely to stop there for long though.
The next significant resistance lies at 69.20, and then 101.54 above here.
It may not look like it right now, just as talking of a 14 low when it was trading at 158 back in 1981 seemed crazy then - but given enough time this will eventually trade back at 101 once it breaks the upper parallel.
Once wage inflation starts to become the norm: people expect another wage increase the next year.
For 10 years and more this has never figured - commodity inflation post 2009 was easily absorbed. Wage inflation is not so easily absorbed.
It leads eventually to over-inflated wage expectations and starts to run out of control over time.
Last time around it led to interest rates at 16%.
Only time will tell how much or little we have learned and since forgotton.
TNX 10 Year Note
Elliott wave Analysis: 10 Year US NOTES Still BearishGood day traders!
Today, let's look at the 10 year US notes.
10 year US notes are surely bearish, and are falling quite nicely, away from 124'25 level of a former swing high, labeled as wave 2. This acceleration in potential five waves will be labeled as red wave 3, usually the strongest and sharpest wave. That said, if we observe closely, we can see that the whole price structure since 125'15 region is situated within the confines of two channel lines, also know as an Elliott wave channel. Well, as we can see price is now trading near the lower portion of the Elliott wave channel line, which can offer support for wave 3, and push price into a temporary correction of black wave 4. Wave 4 can later see limited upside, and possible resistance near the upper portion of the Elliott wave channel.
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Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All our work is for educational purposes only.
10 Year US Notes Reversing For A Temporary Correction10 year US notes fell in five waves from July highs so we can expect more weakness ahead which may drive stock market even higher. However, before continuation to the downside may continue on US treasuries we need a contra-trend reaction in three waves. Well, based on recent turn up we see price in wave a-circled of a three wave advance that may stop at former wave four, near 132'30.
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