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Bonds

10Yr Note - When the Levy BreaksThe important Context of "Pristine Collateral" as we have addressed repeatedly is the Salient Issue - The Return of Capital. The availability of T-Bills remains in an extremely short supply. The Federal Reserve - $230 Billion at last disclosure. The United States Treasury - $0. T-Bill terms of 4, 8, 13, 26, and 52 weeks for issuance have seen the highest percentage of issuance @ present — 91-day, 182-day and 364-day. UST's schedule: www.treasury.gov UST Direct, place your offer - www.treasurydirect.gov * Please let us know how you fared, we did not. Powell, by nature - points the finger and blame @ Sec. Of Treasury - Janet Yellen. Yellen is suppressing "Pristine Collateral" according to Jerome Powell. Is She though... If Banks are not lending... They need to be paid to hold the abundance of CASH. But, wait a minute... Money Center Banks / Primary Broker Dealers do not want CASH. They prefer you place your CASH in Money Market Funds. Say what, Banks don't want CASH? Yes, it is serious LIABILITY on their balance sheets at this point in time as their balance sheets are DEBT Laden. WTF Mate, what are you talkin bout? J.Dude, seriously - you are delusional... This is simply a series compounding errors by ALGOs trading in the Treasury market. IF you believe this - please consider the following: We pointed out this is or LTCM / Lehman moment on an exponential Scale more than a few times. So let's clear the decks with respect as to why Mate. When the lowest yielding Treasury is in Demand - exponential Demand. WE have a problem, one in which everyone loses a Hand. Credit simply gives way to Crisis - Crisis is all that results. And we are all seeing this presently - Inflation is at the highest rate in REAL TERMS while Yields on the Treasury Curve in Real Terms are at the Lowest on Record. Convergence, it a nasty Bitch.
TVC:US10YShort
by HK_L61
1
Credit - US10Y to DeclineIdea for US10Y: - US10Y will decline - institutional fear > buy safe bonds. - Positive correlation in yields/equities right now (extreme periods) - Markets are topped, this will cause a decline in equities. - UST signaling deflationary shock. Yes, you will have inflation win out in the end, but you can have deflationary shock to get Fed to enact more extreme monetary policies. You can have negative growth during price inflation. Reminder that major crashes are preceded by capitulation in yields: GLHF - DPT
TVC:US10YShort
by UnknownUnicorn1043646
4
US10Y Medium-term sellThe US10Y has confirmed the shift from bullish to long-term bearish as last week it broke below the Higher Lows Zone that has been holding since the August 07, 2020 bottom. The bounce however on the 1D MA200 (orange trend-line on the left chart) is something to keep an eye on, but for the moment that is viewed as a Lower Lows rebound within a Channel Down (right chart). The last Lower Highs were made at or close to the 4H MA200 (orange trend-line on the right chart). Since the 4H RSI has just entered its Resistance Zone, it may be a good time to start selling the US10Y. The target is 1.1600, above the 0.5 Fibonacci retracement level (as seen on the left chart). Most recent US10Y idea: ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** -------------------------------------------------------------------------------------------------------- !! Donations via TradingView coins also help me a great deal at posting more free trading content and signals here !! 🎉 👍 Shout-out to TradingShot's 💰 top TradingView Coin donor 💰 this week ==> Ether2020 --------------------------------------------------------------------------------------------------------
TVC:US10YShort
by TradingShot
5
Lookout! The Wealthy Are Shorting The Economy20 year yields appear to be breaking out of a long downtrend which has witnessed a boom in the stock market since this asset's crash back in March of last year. But now the winds seem to be shifting possibly again as now the TLT has started July with fireworks and yields appear to be flipping bullish. This would be very bad for stocks.. however please keep in mind that this is a lagging indicator. Sometimes it plays out in perfect sync, sometimes it takes months to come into effect. Which means, the remainder of the year should be safe for equities. 2022 however, if 20 year yields confirm bullish, would be fair game to see the real crash in the stock market that many have been waiting for. A play on bonds could be the potential bet/hedge in the distant future. If you enjoyed this post please leave a like :)
NASDAQ:TLTLong
by TradeVibez
Bitcoin & Traditional marketsBitcoin is in a weird situation which looks like strong accumulation, while Bitcoin is cheap based on various models and indicators... However across all timeframes it is bearish. It hasn't managed to close above the Monthly + Weekly pivot, it is still below the main Volume Profile PoC (if we include the January area too) and it is below the all major daily moving averages (50-200-300), except the 350 DMA. Some reasons why Bitcoin and Crypto took such a hit, was that everything got really high really fast, excess leverage & speculations, too many coins, too many new entrants, institutions and most importantly global liquidity was shrinking. The inflation story was overstretched and the reflation/inflation trade was peaking, at least in the short term and the inflation story was driven by speculation and supply shortages, not by monetary expansion and real growth. Those exhaustion signs have been around since early 2021 and in Q2 things started getting more serious. Here I will examine where we are at the moment with tons of graphs. Will try to make it as simple and short as possible, but also describe all major asset classes as I do think that having a clear macro picture will help everyone make better decisions both in crypto and outside crypto. Stocks as a whole grew substantially over the last year, and we did see several indices go up 10-20% from the beginning of the year. The Nasdaq has been the best performer lately, while smaller stocks and stocks outside the US have been suffering. Asian stocks have performed very poorly although up until a few months ago their performance was incredible. Small caps in the US also a very similar story, but ones yields peaked, they peaked too and as the deflation/disinflation story was slowly taking over US behemoths started rising again as they are acting as 50+ year bonds. Currently the trend is benefiting US tech giants which however have grown quite a bit over the last few months and might eventually get a significant correction. If they correct hard, I can't see how small caps won't be affected, as the Russell 2000 has also been showing signs of exhaustion. Hasn't broken down yet and still looking ok for the long term, but until we get a clear breakout being a little more cautious isn't bad. In my opinion stocks will really go parabolic at some point, but I also can't ignore the fact that as a whole they are up 30% from their Feb 2020 peak and the financial system is very fragile. So for stocks the best thing is to be bullish but potentially reduce risk. As the VIX is at such low levels during a pandemic, preparing for higher volatility is the right thing to do. We haven't had a big move on the VIX since the Covid crash and before that we'd get one every 12-24 months. Now that the VIX is down 84% from its peak, completed a full cycle and is sitting at support... It is prudent to have less risk on. The major Meme stocks have had major corrections, but they might not be done yet. At least GME has found perfect support at 180 (talked about it recently). As long as it stays above 160 in my opinion there is hope. Above 220 it could really moon once again. For AMC things looked way more rough but the bounce yesterday really took me by surprise. It was really strong and managed to bounce hard after sweeping a key low. The 50-55$ area is an area of strong resistance, but if it manages to close above it we could see another major squeeze up. The last squeeze was a fomo rally + gamma squeeze + short squeeze and for now I don't know what this one could be like. I have a feeling that the one that will really squeeze this time around while AMC chops around 30-70$ is GME. Why? Double tops usually break and the one at 340 really looks ready to be broken. GME has consolidated for much longer than AMC too. One of the most important markets to look at, are US treasuries. Long dated bonds have been going up (yields down) and that's a deflationary move. What we have seen with the Reverse Repo from the Fed, is that the demand for these assets has been quite high and that the bond market isn't buying the strong reflation story. Just to be clear, both bonds and stocks can go higher, but as bonds fall or rise, certain types of stocks benefit from that. For example the 30Y bond goes down in price, small caps benefit, when it goes up, large caps benefit. The rate of change is also very important as big moves in bonds in either direction can create some short term panic in stocks. From their ATHs bonds fell about 28% which over the last 12 years has been a pretty good place for a long term bottom. However right now bonds have found some resistance and haven't broken out to the upside yet which means their downtrend might resume, which would benefit the inflation/reflation assets (people selling safe assets to get into risk assets). Next most important is the US Dollar. When the USD and Bonds go up together, it's a sign of trouble. Something isn't right... Of course both got significantly oversold and hit key support levels, so this might just be a technical bounce. Neither the USD or bonds have broken out yet. Will show several pairs here like EURUSD, GBPUSD, USDCAD, USDCNH, USDZAR. EURUSD hasn't broken down yet, but below 1.17 I easily see it go to 1.14-1.15 where it could potentially bottom. Until then EURUSD is in choppy waters as it is flirting with the 300 DMA. It's long term trend is up, medium term sideways and short term down... but the bounce of support so far is quite promising. GBPUSD has broken a key diagonal, however the long term structure is quite bullish. It has formed a massive base and could eventually break higher, but until I see a close above 1.46 I'd play this level by level. Why? Because the 1.35-1.45 was multi decade support, so I'd like to see it fully reclaimed. On the USD pairs I do believe the USD has shown some extra strength, but nothing is clear there either. For USDCAD looks like a real strong reversal rally but it could just be a dead cat bounce. For USDCNH we have a similar situation, but with a higher chance that this is a real reversal. USDZAR fell so much that it finally bounced, but has so far found resistance on some previous key support levels. Both that and USDMXN have been getting slammed every single time and for now we haven't had a full confirmation of a reversal for those either. Looking just at EURUSD or DXY isn't the right way to evaluate dollar strength. Finally let's get into the most important commodities. Oil after sweeping its 2018 high by a little bit had an 8% correction and hit some really important support levels. It was a very healthy correction after a very huge rally and it might be over. Oil breaking above 77 again would be very bullish and its current structure is already quite bullish. Getting down to 64-66 would be a very nice buying opportunity. There are huge supply issues for oil and this could take the price much higher over the next few months or years. Copper failed to sustain above its 2011 ATH and the R3 Yearly, which is quite bearish. In the short term it has formed a bearish trend, but the long term trend is up and Copper has both high demand and supply issues. It's sitting above support and looking more and more bullish by the minute, so going long here isn't a bad idea, with a stop below the current lows. Otherwise wait for a break of the ATHs and buy any dips after that. Gold had a similar situation with Copper, but at different times. The truth is that the current macro situation is more bullish for Copper if governments start spending on building/creating stuff, especially for technological stuff or regarding renewable energy. We might have a disinflationary backdrop, but the demand for Copper might be much larger than its supply.
by BitcoinMacro
1
Gold BreakoutLike the seasons, the markets appears to be attempting a shift. I made a recent post about long term treasury yields flipping bullish this month so far and now Gold appears to be doing the exact same thing as it has seen a beautiful breakout of a descending broadening wedge. This is one of the more bullish patterns that exists, which means if this monthly candle shown on the chart confirms, big things could be in store for the precious metal. Keep a close eye on this and the stock market as a whole as the year goes on. If big money starts aggressively piling their cash into hedges such as gold and bonds, that could mean bad things for many of the overvalued stocks out there. This would especially mean bearish things for speculative tech stocks and cryptocurrencies.
FOREXCOM:XAUUSDLong
by TradeVibez
Are the bond bulls in control or is it time for a break?Bonds have reached a very important level. For now this seems like a *logical* place for the *anti-reflation* / deflation trade to end, and for the risk on trade to be back. I am more on the disinflationary (very low inflation) camp, however bonds have risen substantially and it might be time to take some profits before the resume lower. I don't think we will have extremely high inflation yet and I don't think we will have the good type of inflation because things are going well. I do expect Oil to go higher and that to cause all sorts of issues and higher prices, but other than that I don't think bonds will get crushed. At least no yet. The key question for the whole reflation trade is... WIll bonds and USD keep going higher, with only US behemoths rallying or and the rest bleeding or struggling, or could we get a larger shock? Because to me if the USD really breaks out and heads for 96 on the DXY, while bonds also rally... we will eventually see something break. I think we'll soon have a better idea of where things could be heading next so it is better to be patient and take a few select trades that go well with this environment and look technically sound.
NASDAQ:TLT
by BitcoinMacro
1
Deflation, NOT Inflation, the Real Threat to the Stock Market?I am a contrarian. Many successful investors and traders tend to be. Following the crowd isn’t the best financial advice. Recently my contrarian spidey senses have been going off. If you have been following the Stock Markets, and particularly, the fundamentals, you have heard the word inflation be mentioned once or twice. Who am I kidding! That’s all everyone talks about!. The Fed is talking about it, the financial media is talking about it. And for good reason. When I worry about recent inflation, and future inflation I look at it two ways. Firstly, inflation is about a weaker currency. If a currency is weak, it takes more of that weaker currency to buy something. Hence the rising price. Regular readers may recall my worry about the currency war. Nations want a weaker currency to keep assets inflated and to boost exports for economic recovery (mainly the Euro and the Yen on the export front). The second worry regarding inflation is the current situation. With government checks and such, we are in a situation where there are people with more money competing for the same number of goods and services. Productivity is the key, and what we have to increase in order to warrant that extra money supply. Productivity will be a talking about in the near future, especially if we see more supply chain issues. I have heard that there are many young people on golf courses talking about how they will never go back to work. They have made more money trading stocks and crypto’s! This macro look is a bit different than the Federal Reserve. The Fed is telling us that this inflation is temporary. “Transitory” is the word they use. This type of inflation is only occurring due to economies re-opening and people beginning to spend money. Money velocity is increasing. The Fed is NOT raising interest rates, even with inflation data coming above 5% and hitting decade highs, because they believe once consumers begin shifting purchases from goods to services, the inflation will come back below the 2% level. Billionaire hedge fund managers (some still active) such as Ray Dalio, Stanley Druckenmiller, and Paul Tudor Jones have come out sounding the alarm bells on Fed policy and the inflation trade. The Fed will need to raise rates sooner rather than later to avoid major inflation. But, the markets seem to be calling the Feds bluff. Everyone knows the current market environment is all about speculation. Cheap money from the Fed helps. The party keeps going. If the Fed was going to raise rates, many expect the stock markets would tank. They would take a big hit on the taper tantrum. This could be the reason the Fed does not want to raise rates, because of the potential financial crisis that could snowball. Leveraged trades, pension funds, major banks could be affected on a large stock market decline which would trigger a larger crisis. Some say the Fed is trapped, and transitory inflation is a way for them to delay rate hikes for as long as possible. Let’s not forget that there is more debt out there, so a rate hike would make payments more expensive for consumers and for government. But now I want to turn all of this on its head. Pull a 180 turn. What if Deflation is the real threat and NOT Inflation? Inflation signals are: 1.Rising Interest Rates (A Fall in Bond Prices) 2.Rise in Foreign Currencies (Euro, Loonie etc) or another way to put it, a fall in the US Dollar 3.Rising Gold Prices Deflation signals are the opposite: 1.Lower Interest Rates (A Rise in Bond Prices) 2.Rise in the US Dollar 3.Falling Gold Prices Let's see what the chart's tell us: Above are the daily charts of the US 10 year yield, and bonds. I have chosen TLT, but you can see the same on BND. Just remember: there is an inverse correlation. When bond prices rise, yields drop and vice versa. Looking at the 10 year first, do you all remember when the rising 10 year yield was spooking financial markets? Interest Rates were rising, fueling perma bear doomsday market crash scenario’s. Now, we hardly hear about that. And for a good reason. The 10 year yield had to hold above 1.50% for further upside momentum. This did not happen. We have not closed below 1.50%, and it looks like yields are heading LOWER. In today’s trading, yields are puking. A 5% decline at time of writing. TLT might be the important macro chart for the next few months. We have triggered an Uncharted Market Structure pattern. We would be going long, and expect more upside as long as TLT remains above 140. This means higher bond prices, which is big for two reasons. First, it ticks a deflation criteria box. Secondly, it will test the asset allocation model. Money tends to run into bonds when there is a risk off environment. Meaning money will LEAVE stocks for bonds. Perhaps this is signaling an event in the near future which will cause money to run into bonds. Deflation anyone? DXY chart is the chart for this idea. Currently, we are in some Dollar long trades based on the daily chart meeting Uncharted Market Structure criteria. But the weekly chart is hinting at further US Dollar strength. The 89 zone is major support. The Dollar found support there and ranged for weeks, before shooting higher. It seems like a double bottom pattern is in the works. Once again a bit worrying as Dollar strength generally means something is coming down the pipeline. Money flows into the Dollar when things are uncertain. It is a safe haven currency. OR, the Dollar can finally be playing out as I have said months ago. In this currency war, the Dollar is the best fiat out of the bunch. The other way to look at this is through the lens of interest rate differential. If the Fed is going to raise rates sooner than other central banks, money would flow into the greenback. This week and month will be big for the US Dollar. If we close below 90.50 on the DXY, then the deflation criteria for the Dollar becomes challenged. But as of now, the new uptrend is still in play meaning another tick in a deflation criteria box. Last but not least, Gold. This is where things get a bit murky. As a trade, I think there is some upside for Gold that could occur this week. But we want to focus on the longer term. If interest rates drop, this is positive for Gold. But conversely, the prevailing thought is that a stronger dollar is negative for Gold. I still believe money can run into both the Dollar and Gold if there is a confidence crisis (people begin losing trust in government, central banks and fiat currency). Everything macro is pointing to higher Gold prices even with a rising Dollar. Gold is a bit tough to analyze. It looked great with us breaking a flag/pennant pattern, but we have closed below on the retest, so the pattern is now invalid. You can see I have a major flip zone where Gold is currently. This 1775 zone is key. I will be watching this weeks close closely to determine whether Gold continues to move higher. In summary the deflation idea has some technical support. When I see bonds and the US Dollar rising, I automatically think a run into safety. Fear. Perhaps this fear has to do with the pandemic and future variants (the Lambda variant which is deadlier than Delta was recently announced), or maybe big money is pricing in deflation.
TVC:DXY
by Uncharted-FX
2
🎓 EDU 7 of 20: Use the Power of Intermarket Analysis 🔀Intermarket analysis is an often neglected and overlooked type of analysis among traders. However, it's a powerful tool that can help you anticipate future price movements by following the performance of other, closely-related markets. Intermarket analysis refers to the analysis of other asset classes that can provide valuable and actionable insights into related markets, such as forex. In this part of our Intermarket analysis lesson, we'll be focusing on a specific asset class that has a very close connection with currencies: the sovereign bond market and yields. As you already know from my previous educational posts, currencies tend to follow interest rates. With the fall of the Bretton Woods agreement, currencies became freely-floating and capital started to move to places with the highest yields, which meant higher returns for investors. For example, if Australia has a 3% interest rate and Japan a 1% interest rate, investors could buy AUD to collect a 3% rate and short JPY by paying a 1% rate, leaving them with a net profit of 2%. This is how carry trade work, and the long AUD/JPY was one of the most popular carry trades given the large yield differential between Australia and Japan. That's why you need to follow yield differentials in your trading. The chart above shows the EUR/USD pair, and the 2-year yield differentials between 2-year German bonds and 2-year US bonds. Notice that we're using German bonds (also known as "bunds"), since Germany is the largest European economy. To add yield differentials to your chart, simply hit the "+" (compare) above your chart and type in "DE02Y - US02Y" with a space between the symbols. This also works for other currencies. Here is a list of symbols for the major currencies and their respective bond yields: US02Y, CA02Y, GB02Y, DE02Y, JP02Y, AU02Y, and NZ02Y. The currency should be self-explanatory from the symbols (note, we also the German 2-year yield when analyzing CHF.) Notice how the exchange rate closely followed the differentials in yields. When German yields rose compared to US yields, capital inflows to the euro area increased demand for EUR, which lifted the exchange rate. Similarly, when US yields rose compared to German yields, capital inflows to the US increased demand for USD, and the EUR/USD pair fell (meaning a stronger USD.) The dots you see on the chart are the individual bond yields (DE02Y and US02Y), because I like to have a picture of why the yield differential line is rising or falling (i.e., did the line fall because US yields are higher, or because German yields are lower?) We are using the 2-year yields, because they tend to closely follow the monetary policy stance of the respective central bank. In other words, when the ECB turns hawkish, the DE02Y tends to rise (signaling higher interest rate expectations), which in turn would push the yield differential line higher (and most likely the EUR/USD pair as well.) In the next part of Intermarket Analysis, we'll take a look at how other markets can impact currencies, like metals, commodities, and energy. Please hit the "Like" button and follow, so you won't miss future trade ideas and educational posts!
Education
by MujkanovicFX
Predicting the Time-window for Turns, in all MarketsInexplicably, upon publishing this post, the Title Chart becomes distorted beyond recognition thus, all references are to this Original Chart - below Do markets trend on the medium term (months) and mean-revert on the long run (years)? Does Black's intuition bear out that prices tend to be off approximately by a factor of 2? (Taking years to equilibrate.) How does Technical Analysis , as a whole, act as a trend following system while Fundamental Analysis matters only once prices get way out of line? Is mean-reversion a sufficient self-correcting mechanism to temper irrational exuberance in financial markets? We examine these questions in the proceeding; In his 1986 piece Fisher Black wrote: "An efficient market is one in which price is within a factor 2 of value, i.e. the price is more than half of value and less than twice value. He went on saying: The factor of 2 is arbitrary, of course. Intuitively, though, it seems reasonable to me, in the light of sources of uncertainty about value and the strength of the forces tending to cause price to return to value. By this definition, I think almost all markets are efficient almost all of the time." The myth that “informed traders" step in and arbitrage away any small discrepancies between value and prices never made much sense. If for no other reason but the wisdom of crowds is too easily distracted by trends and panic. Humans are pretty much clueless about the “fundamental value" of anything traded in markets, save perhaps a few instruments in terms of some relative value. Prices regularly evolve pretty much unbridled in response to uninformed supply and demand flows, until the difference with value becomes so strong that some mean-reversion forces prices back to more reasonable levels. Black imagined, Efficient Market Theory would only make sense on time scales longer than the mean-reversion time (TMR), the order of magnitude of which is set by S√TMR∼d. For stock indices wit hS∼20%/year, makes TMR = ∼6 years. The dynamics of prices within Black’s uncertainty band is in fact not random but exhibits trends: in the absence of strong fundamental anchoring forces, investors tend to under-react to news or take cues from past price changes themselves. In fact, the notorious and unbridled reliance and un-anchored, speculative extrapolation is the mainstay of most investors, as well as Wall Street's itself, as it is the regular course of everyday "investing" across most asset classes. In the following a picture emerges (and we test it), whether market returns are positively correlated on time scales TMR and negatively correlated on long time scales ∼TMR, before eventually following the (very) long term fate of fundamental value - in what looks like a biased geometric random walk with a non-stationary drift. We have looked at a very large set of financial instruments, drawing on data sets from 1800 - 2020 (i.e. 220 years). We applied the same method to all available data in Stocks, Bonds, FX, Commodity Futures and Spot Prices, the shortest data set going back 1955. As it turns out that, in particular, mean-reversion forces start cancelling trend following forces after a period of around 2 years, and mean-reversion seems to peak for channel widths on the order of 50-100%, which corresponds to Black’s “factor 2”. Mean-reversion appears as a mitigating force against trend following that allows markets to become efficient on the very long run, as anticipated previously by many authors. Regarding the data we used for this study; Commodity Data sets - Starting date Natural Gas 1986 Corn 1858 Wheat 1841 Sugar 1784 Live Cattle 1858 Copper 1800 Equity Price data sets - Starting date USA 1791 Australia 1875 Canada 1914 Germany 1870 Switzerlan 1914 Japan 1914 United Kingdom 1693 From trends to mean-reversion The relation between past de-trended returns on scale t'< and future de-trended returns on scale t'>. Defining p(t) as the price level of any asset (stock index, bond,commodity, etc.) at time t. The long term trend over some ti scale T is defined as: mt:=1Tlog . For each contract and time t, we associate a point(x,y) where x is the de-trended past return on scale t'< and y the de-trended future return on scale t>:x:= logp(t)−logp(t−t'<)−mtt'<;y:= logp(t+t'>)−logp(t)−mtm't'. Note that the future return is de-trended in a causal way, i.e. no future information is used here (otherwise mean-reversion would be trivial). For convenience, both x and y are normalized such that their variance is unity. Remarkably, all data,including futures and spot data lead to the same overall conclusions. See in chart; As the function of the past (time) horizon t'< (log scale) for Red & White Bars, the futures daily data and spot monthly data. To compare the behaviour of the regression slope shown in the chart with a simple model, assume that the de-trended log-price pi(t) evolves as a mean-reverting Ornstein-Uhlenbeck process driven by a positively correlated trending noise m. It is immediately apparent from the dashed line in the chart that the prediction of such a model with g= 0.22, k−1= 16 years and y'−1= 33 days, chosen to fit the futures data and g= 0.33, k'−1= 8 years and gh'−1= 200 days, chosen to fit the spot data. In the short term volatility of prices is simply given by S'2k's'. Non-linear effects A closer look at the plot(x,y )however reveals significant departure from a simple linear behaviour. One expects trend effects to weaken as the absolute value of past returns increases, as indeed reported previously. We have therefore attempted a cubic polynomial regression, devised to capture both potential asymmetries between positive and negative returns, and saturation or even inversion effects for large returns. The conclusion on the change of sign of the slope around yt'<= 2 years is therefore robust. The quadratic term, on the other hand, is positive for short lags but becomes negative at longer lags, for both data sets. The cubic term appears to be negative for all time scales in the case of futures, but this conclusion is less clear-cut for spot data. The behaviour of the quadratic term is interesting, as it indicates that positive trends are stronger than negative trends on short time scales, while negative trends are stronger than positive trends on long time scales. A negative cubic term, on the other hand, suggests that large moves (in absolute value) tend to mean-revert, as expected, even on short time scales where trend is dominant for small moves. Taking these non-linearities into account however does not affect much the time scale for which the linear coefficient vanishes, i.e. roughly 2 years Conclusion Here we have provided some further evidence that markets trend on the medium term (months) and mean-revert on the long term (several years). This coincides with Black’s intuition that prices tend to be off by a factor of 2. It takes roughly 6 years for the price of an asset with 20 % annual volatility to vary by 50 %. We further postulate the presence of two types of agents in financial markets: Technical Analysts , who act as trend followers, and Fundamental Analysts , whose effects set in when the price is clearly out of whack. Mean-reversion is a self-correcting mechanism, tempering (albeit only weakly) the exuberance in financial markets. From a practical point of view, these results suggest that universal trend following strategies should be supplemented by universal price-based “value strategies" that mean-revert on long term returns. As it's been observed before, trend-following strategies offer a hedge against market draw-downs while value strategies offer a hedge against over-exploited trends.
TVC:DJIEducation
by Nemo_Confidat
8
TLT - Confirmed bottom - More upsideThoughts and ideas are my own view. Now, I've been in a trade on TLT for a little while now. About 2 weeks. It's quite obvious there's a couple things going on here: 1. A reduction of downward momentum that ended in mid-March. 2. A move up followed by a corrective move to the downside which did not make a new low 3. Our indicators indicated we were about to make a move to the upside 4. There's also a visible inverted head and shoulders that broke out on June 8 Mix all these things and there's a squeeze that is expanding to the upside as well. Although we may see a pullback to retest the breakout area, I'm interested in seeing TLT make a move up to approximately $149 in the coming month.
NASDAQ:TLTLong
by bitdoctor
Is TLT saying we are about to have a Vix explosion? I have been following many charts and patterns for quite some time. and The set up for an entire market melt down is almost too perfect right now. and I will go through the list of events that have taken place: First lets start with Gold. Gold had rallied on the back of lower yields for the better part of 2 months all to just get shot down during the FOMC meeting just a few weeks ago when the dollar shot up. (gold tends to lead the market sells offs by about 2-3 weeks) Mind you all of this has happened as yields have gone lower and lower. (totally not what you would expect from an "inflationary environment") gold respects real rates however if deflation was about to start happening, then this is the exact precursor you would expect. This is why I believe that if I am wrong about the vix explosion gold is going to be the best buy of the quarter. Then lets move to the DJT (dow jones transports) I explained this in my prior IYT analysis which can be found here: The transports just like gold and precious metals are generally the first assets to take a hit give or take about 2-3 weeks before general market correction. and that leads me to my last point. TLT, oh tlt you dirty whore you. (I am currently long tlt fyi) The set up in the line chart of tlt is identical to the pre-covid crash as you can see in this chart. But wait there's more.. Why has DXY been rallying along with TLT that does not happen very often. Some times it happens here and there But it does not happen for stretch of 2 weeks. All I am saying is stay hedged people. this is a very very risky set up.
NASDAQ:TLT
by crakehair
3
What is Olympus?Olympus is an algorithmic currency protocol based on the OHM token. It introduces unique economic and game-theoretic dynamics into the market through asset backing and protocol controlled value. How can I benefit from Olympus? The main benefit for stakers comes from supply growth. The protocol mints new OHM tokens from the treasury, the majority of which are distributed to the stakers. Thus, the gain for stakers will come from their auto-compounding balances, though price exposure remains an important consideration. That is, if the increase in token balance outpaces the potential drop in price (due to inflation), stakers would make a profit. The main benefit for bonders comes from price consistency. Bonders commit a capital upfront and are promised a fixed return at a set point in time; that return is in OHM and thus the bonder's profit would depend on OHM price when the bond matures. Bonders benefit from a rising or static OHM price. Want more info? here! ...brutal.
OLong
by harribatu
Bonds and the vitality of the market and overarching economy.In this chart, I find it important to (as an economist) monitor treasuries and bonds, luckily Tradingview has us covered there. The next few charts will be some economic correlations so we can better understand the economy before I get into the meat and potatoes of this system . As you can see, bonds and treasuries are dropping which indicates selling. Big name bond investors are spooked, and looking at it from this perspective I can see why. Take a second to think back to the start of 2020 and the 'thing that wont be named'. Think of ALL the BS that has happened in this timeframe, If I had big money in bonds right now, I would be spooked myself. I will be getting into detail in a later economic chart about just some of the crap that must be on big investors minds.
FRED:DGS30
by Joshuakm