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A Traders’ Playbook – Defence remains the best form of attack Equity continues to trade heavily, and while we are getting to a point of extreme fear, the price action, and the bearish momentum in EU, AUS200 and US equity indices, suggest this is still a sellers’ market. While we have some big catalysts due this week, I still think we must navigate a passage of darkness before we see light in this tunnel. The geopolitical backdrop in the Middle East remains a dominant market consideration and the market still sees an increasing risk the conflict will not be contained with other players stepping into the conflict. A near 3% rally in Brent crude on Friday testament to those worries, with the move above $90 seeing traders bid up gold to $2006, with gold's role as the preeminent portfolio hedge once again confirmed. A move into the April/May supply area of $2050 seems perfectly feasible, and the bullish momentum in the price, and the ease by which we’ve seen gold push through well-watched resistance levels, suggests the path of least resistance remains higher and pullbacks should be well supported. The BoJ meeting could be a real curveball and while the odds are we see it proving to be a low-volatility event, if the BoJ does tweak the YCC cap to 1.5% it could trigger a wave of selling through global long-end bonds (yields higher). This would likely see sizeable gyrations play through all markets, with the JPY – which has stolen the crown from the CHF as the no.1 geopolitical FX hedge – likely to rally hard. Gov Ueda has aimed to be more predictable than former gov Kuroda, so with recent press suggesting a tweak to YCC could be on the cards, the prospect of change to policy is 50:50. We also get the US Treasury Quarterly Refunding activity throughout the week. To those who aren’t fixed-income traders, this can be an event that isn’t too well-known. As we saw in August, when the Treasury Department detailed increased auction size in its financing plans, it proved to be a key driver behind US Treasury yields rising sharply from 4%. Once again, this event does have the potential to create some big vol in bonds, which could spill over into FX and equity markets. This time around, could we see lower increases in supply, which in turn supports USTs? Staying in the US, while the FOMC meeting can never be ignored, traders get a thorough read on the US labour market and wages/earnings. On the docket, we get ADP payrolls, the Employment Cost Index, JOLTS job openings, Unit Labour Costs, jobless claims, and nonfarm payrolls. US swap pricing has a 25bp hike in December priced at a 20% chance, so big numbers in this report could see that probability rise, which would likely see the USD break out of the current sideways consolidation. Corporate earnings get another run past traders, with 24% of the S&P500 market cap reporting. Apple is the marquee name to report, with the options market pricing a move on the day at 3.7% - the market focused on iPhone demand and consumer trends in China. Rallies have been sold of late, with price now below the 200-day MA for the first time since 2 March 2022. It promises to be another lively week – good luck to all. The marquee event risks for the week ahead: Month-end flows – talk is pension funds and other asset managers rebalancing in favour of selling of USDs. China manufacturing and services PMI (31 Oct 12:30 AEDT) – the market sees the manufacturing index at 50.2 (unchanged) and services index at 51.8. EU CPI (31 Oct 21:00 AEDT) – while EU growth data seems the more important factor, we could see some volatility in the EUR on this data point. The market consensus is for headline CPI to come in at 3.1% and core CPI at 4.2%. EURCAD is trending higher, and I like it into 1.4750. BoJ meeting (31 Oct – no set time) – the BoJ should increase their inflation estimates, but the focus will fall on whether there is an adjustment or even full removal of Yield Curve Control (YCC). This is where the BoJ currently cap 10-yr JGB yields (Japan Govt bonds) at 1%. The consensus sees no change to YCC at this meeting, but there is a 50:50 chance we see the cap lifted to 1.5% - an action which could see JGBs sell off (higher yields) and see global bond yields higher in symphony. It could also see the JPY rally strongly. US consumer confidence (1 Nov 01:00 AEDT) – The market expects the index to pull back to 100.0 (from 103.0) – unlikely to cause to much of a reaction across markets unless it’s a big miss. US Treasury November Refunding (30 Nov at 06:00 & 1 Nov 12:30 AEDT) – the US Treasury Department (UST) will offer its gross financing estimates for Q42023 (currently $850b) and end-of-quarter targets for its cash balances. It is likely that the gross borrowing estimate will be lowered to $800b, perhaps even lower. The lower the outcome the more USTs should rally and vice versa. On 1 Nov we will see the UST announce the size of upcoming bond auctions across the 2-, 3-, 5-, 7-, 10- and 30-year bond maturities. The market expects auction sizes to increase across ‘the curve’ by around $1-2b for each maturity. As we saw in August, the higher we see these taken the greater the likely reaction in US Treasuries and subsequently the USD. FOMC meeting (2 Nov 05:00 AEDT) – The market ascribes no chance of a hike, so guidance from the statement and Powell’s press conference is key. One can never overlook a Fed meeting, but in theory, we shouldn’t learn too much new information and this should be a low-drama event. BoE meeting (2 Nov 23:00 AEDT) – UK swaps price a 4% chance of a 25bp hike at this meeting, and around a 1 in 3 chance of a 25bp hike by Feb 24. The split in the voting could also be important, with most economists leaning on a 6:3 split. The market feels like the BoE are done hiking, with cuts starting to be priced by June. US ISM manufacturing (2 Nov 01:00) – The consensus is for the index to come in at 49.0 (unchanged). Consider that the diffusion index has been below 50 since October 2022, so a reading above 50.0 could be modestly USD positive. US JOLTS job openings (2 Nov 01:00) – Last month we saw a big increase in job openings and further evidence the US labour market is tight. The consensus this time around is for 9.265m job openings (from 9.61m) – risky assets will want to see this turn lower again with reduced job openings. US nonfarm payrolls (3 Nov 23:30 AEDT) – With so many labour market and wage/earnings data point due out this week, the US NFP report is the highlight. After last month’s blowout 336k jobs print, the current consensus is for 190k jobs, the U/E rate at 3.8% and average hourly earnings at 4%. Brazil Central Bank meeting (2 Nov 08:30 AEDT) – The BCB should cut by 50bp. Earnings – This week we see earnings from UK, EU and US listed names coming in thick and fast - 24% of the S&P500 market cap report this week. Numbers from HSBC (Monday), Caterpillar (Tuesday) AMD (Tuesday), Qualcomm (Wednesday), Apple (Thursday) should get the attention.
PEPPERSTONE:XAUUSD
by Pepperstone
22
That time of year again! | SeptemberIf you look at the stock market as a game, each month has different odds for success, the best odds are in December when you have a 77% chance of making money and having a positive return. The odds are in your favor in most of the other months, except September when there’s only a 50/50 chance of profiting in the stock market. It’s September again so any number of articles will remind us that September has been the worst month for US stock markets. September leaps off the page as being the only month with an average negative return, and the magnitude of average loss is serious at -0.8%. September has been the worst performing month because first It has the lowest average return. The average loss in September has been -0,8%, due in part to the fact that the worst month ever happened in a September. A 29.7% loss in September 1931 is the worst monthly loss ever. All of the other 11 months have positive average returns and second 49 of the past 97 Septembers – 51% have suffered losses, contrasted to the other months that have had positive returns 64% of the time. Gold and International Stocks are the best performing asset classes in September with a .48% average return, which is half the average monthly return on the S&P500. Gold has delivered positive returns in September 84% of the time. The best month for gold is January, and the worst is March. International Stocks have delivered positive returns 69% of the time. December is the best month for this asset class and April is the worst month. Preferred stocks have the worst September performance, losing -0.91% on average. These stocks win only 48% of the time, so not a good bet plus September is the worst month in history of bitcoin and crypto market as well Remember trend is your friend so if you got 100X degen long leverage you should be ready for some margin call which stock or crypto you shorting now?
SP:SPXShort
by moonypto
2
#US10Y Yields perhaps a little extended here short term?Got to be brave trying to run infront of this steamroller, but we are starting to see signs of bearish divergence where price(yield) is making higher highs, not confirmed by the RSI and MACD which are currently making lower highs. This could be warning of a short term reprieve in yields which could be bullish risk assets. However, given the current environment with conflict in the middle east, one has to becareful
TVC:US10YShort
by MarcoOlevano
How the Fed affects long Bond YieldsInverse chart of US10Y Yield to show changes in Bond prices. Overlayed with the following: Fed Funds Rate US Treasury Deposits to Federal Reserve Banks Increase/Decrease Rate of change to Fed Balance Sheet Balance Sheet Total in separate pane below The USCBBS Percentage Change shows the money raining down :-D It's clear to see the relationship between the Fed buying Treasuries, i.e. Quantitative Easing (QE) and the increase in US10Y prices. Quantitative Tightening (QT) is the name of the game now. There is A LOT of QT left to do, we're at most 25% into QT since the Fed has only rolled off roughly 1Trillion. They likely have 3+ Trillion to go. Expect US10Y to be under continued pressure as long as QT is in effect. Even when Fed Funds rates are lowered it will have little effect on US10Y while the biggest buyer of Treasuries is on hiatus.
TVC:US10Y
by RobBiddle
Inflation SupercycleOn the afternoon of October 3rd, 2023 something unprecedented happened in the U.S. Treasury market. For the first time ever, bear steepening caused the 20-year U.S. Treasury yield and the 2-year U.S. Treasury yield to uninvert. Bear steepening refers to a scenario in which long-duration bond yields rise faster than short-duration bond yields, as bond yields rise across the term structure. In all past instances, inverted yield curves have normalized due to bull steepening . The probability that bear steepening would cause an inverted yield curve to normalize is so low that, until now, most term structure models excluded the possibility of it ever happening. In this post, I'll explain why this anomalous event is a major stagflation warning. The chart above shows that the 10-year Treasury yield has been rising much faster than the 3-month Treasury yield throughout 2023, narrowing the once-deep yield curve inversion. Since a yield curve inversion indicates that a recession is coming, and bear steepening indicates that the market is pricing in higher inflation for the short term, and even more so, for the long term, then bear steepening during a yield curve inversion indicates that high inflation may persist even during the recessionary phase. High inflation during the recessionary period is what defines stagflation . Since very strong bear steepening is normalizing a deeply inverted yield curve, the combination of these events is a warning that severe stagflation is likely coming. High inflation has caused Treasury yields to surge at an astronomical rate of change. Bond prices, which move in the opposite direction as yields, have sharply declined causing destabilizing losses. The effects of these massive bond losses are not even close to being fully realized by the broad economy. The image above shows a bond ETF heatmap with year-to-date returns. Large losses have been mounting across numerous bond ETFs. Long-duration Treasury ETF NASDAQ:TLT has declined by more than 18% this year. Click here to interact with the bond ETF heatmap Despite the extreme pace of monetary tightening, many central banks are still struggling to contain inflation. Inflationary fiscal spending and ballooning debt-to-GDP levels are confounding central bank monetary policy efforts. In Argentina, for example, inflation continues to spiral higher despite the central bank raising interest rates to 133%. The chart above shows that the central bank of Argentina has hiked interest rates to 133%. Despite this extreme interest rate, the country's inflation rate continues to spiral higher. In an inflationary spiral, there is no upper limit to how high interest rates can go. As the Federal Reserve tightens the supply of the U.S. dollar -- the predominant global reserve currency -- all other countries (with less demanded fiat currency) generally must tighten their monetary supply by a greater degree in order to contain inflation. If a country fails to maintain tighter monetary conditions than the Federal Reserve, then the supply of that country's (lesser demanded) fiat currency will grow against the supply of the (greater demanded, and scarcer) U.S. dollar, causing devaluation of the former against the latter. In effect, by controlling the global reserve currency, the Federal Reserve is able to export inflation to other countries. This phenomenon is explained by the Dollar Milkshake Theory . The forex chart above shows FX:USDJPY pushing up against 150 yen to the dollar. The longer the Bank of Japan continues to maintain significantly looser monetary conditions than the Fed, the longer the yen will continue to devalue against the U.S. dollar. The meteoric rise in bond yields is particularly concerning because it has broken the long-term downtrend, signaling the start of a new supercycle. After hitting the zero lower bound in 2020, yields have rebounded and pierced through long-term resistance levels. The chart above shows that the 10-year U.S. Treasury yield broke above long-term resistance, ending the period of declining interest rates that characterized the monetary easing supercycle. We've entered into a new supercycle, one in which lower interest rates over time are a thing of the past. The new supercycle will be characterized by persistently high inflation. It will start off insidiously, with brief periods of disinflation, but over the long term it will accelerate higher and higher, ultimately causing today's fiat currencies to meet the same fate that every fiat currency in history has met: hyperinflation. * * * Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
FRED:M2SL
by SpyMasterTrades
46
US10Y Bearish Divergence tells us it may be time for correctionLast time we looked at the U.S. Government Bonds 10YR Yield (US10Y), it gave us a technical bounce and profitable buy signal (see chart below) as the Higher Lows trend-line held: This time we get an opposite signal as the 1D RSI formed Lower Highs, while the price is on Higher Highs, which is a technical Bearish Divergence. The asset is still supported both by the 1D MA50 (blue trend-line) and the Higher Lows 3 trend-line since the May 04 Low. Our strategy is to sell and target a price slightly above each Higher Lows trend-line, then re-sell if a 1D candle closes below that Higher Lows trend-line. Target 1 is 4.745, if a 1D candle closes below Higher Lows 1, we will re-sell and target 4.645 (expected contact with the 1D MA50). If Higher Lows 2 break, then re-sell and target 4.465 on Higher Lows 3 and a projected contact with the 1D MA100 (green trend-line). ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10YShort
by TradingShot
1
Trader Thoughts – when realised vol rises that’s when we worrySentiment in markets continues to sour, with the market heading towards the safety of gold, the CHF and equity index volatility. We see the VIX index above 20%, showing a pickup in market players hedging equity drawdown, and paying up for downside puts in the S&P500. The VIX index at 21.4% equates to implied daily moves in the US500 of 1.34%, and 3% over the week. The market's key concern, and a critical mover of risk, remain concerns surrounding an escalation in the countries involved in the geopolitical tensions, with the US unable to contain the conflict. It is becoming one largely correlated trade – new headlines emerge, Brent crude, and to a lesser extent (currently) EU Nat gas rallies, and we subsequently see buyers in the CHF and gold. Equity vol also rises, and funds rotate into defensive areas of the market and offset risk through energy names. It would be when we see S&P500 realised volatility moving higher that should see things move even more aggressively. This is where we see a lot of the hedge funds that target a specific level of volatility start to reduce equity holdings, while CTA’s (systematic trend following funds) would also reduce exposures. With reduced buyers in the market and higher vols, this is the time when short sellers will see their ideal conditions to deploy strategies. As we see S&P500 10-day realised vol remains subdued, but any lift could have big implications. The other aspect of the market cross-current is the ever-higher yields in 10- and 30-year US Treasuries. This has in part been driven by a rise in US real rates (bonds adjusted for expected inflation over that period). But also, ‘term premium’, or the additional compensation bond investors require to hold longer-dated debt rather than simply holding and rolling over 2-year Treasuries upon maturity. A resilient US economy is partly behind that, and so is the Fed’s current commitment to higher for longer. The deteriorating US fiscal position is likely playing a role in higher long-end yields too and the notion of increasing supply from the US Treasury department, a factor even Jay Powell mentioned last night was “unsustainable”. As we head to the next US Treasury Quarterly Refunding date in November, the fact President Biden is requesting a $100b aid package for Israel and Ukraine to a leaderless House will only exacerbate concerns around Increasing bond supply and the potential demand from private investors. While fixed-income investors see the conviction in trading Treasury curve steepeners, many others ask, “Will something in the system break”? Well, we look for the signal in the price action in credit, volatility, and bank equity. For now, what may be more prevalent, in the shorter term, would be a sharp rise in energy that moves concurrently with even higher long-end yields – that would be a toxic mix for risk. As we close out the week, traders will be paying attention to the tape today as we roll into European and US trade – Will traders de-risk going into the weekend and put further safe-haven bets on, seeing the potential for another gapping risk in Monday's cash and futures open?
PEPPERSTONE:US500Short
by Pepperstone
US 10 Year Treasury Bonds - TOP Call Coming! (For now) $TNXWhat Major Event will occur to force thirst for US and G20 Treasury Bonds? It's happening soon. I wish I had a crystal ball to say what will cause it, but it'll happen. We're almost there IMO 5.19-5.25% topline target - then I hope in whatever this Market or world event will force yields to go back down to 3.19-3.25% Before eventually continuing back up in the next major World event to create Inflation AKA Wave 2 Inflation
TVC:US10YLong
by acemoneypicks
$TBT Double Top AMEX:TBT Double Top, A "double top" is a popular term used in technical analysis to describe a chart pattern that suggests a potential bearish reversal of an uptrend. Here's a breakdown of the double top pattern: 1. **Formation**: The double top pattern forms after a strong upward move or trend. It consists of two consecutive peaks that are roughly equal, with a moderate trough in-between, which is called the "neckline". 2. **First Peak**: The first top is formed when the upward trend reaches a resistance level and sees a reversal, leading to a price decline. 3. **Trough**: After the first peak, the price undergoes a correction, which leads to the formation of the trough. This decline is a sign of short-term profit-taking but isn't strong enough to signal a trend reversal yet. 4. **Second Peak**: Following the trough, the price will attempt to rally again, moving back towards the level of the first peak. However, it will once again meet resistance and fail to break through, leading to the formation of the second peak. 5. **Breakdown**: After the formation of the second top, if the price breaks below the neckline or the lowest point of the trough, it's a confirmation of the double top pattern and signals a trend reversal. The expected downward move can be approximately the same vertical distance as that between the peaks and the neckline. 6. **Volume**: Typically, volume tends to be higher on the left peak than on the right one. A noticeable increase in volume on the breakdown through the neckline can serve as additional confirmation. 7. **Significance**: The double top pattern is considered a powerful signal, especially when spotted on longer timeframes like daily, weekly, or monthly charts. However, as with all technical analysis patterns, it's essential to use additional indicators and methods to confirm a potential trade. Remember, while the double top can be a reliable indicator of a trend reversal, no single method is foolproof, and it's essential always to use risk management techniques.
AMEX:TBTShort
by AlgoTradeAlert
2
US10Y Bullish as long as the 1day MA50 holds.The 10year Bond Yields / US10Y is trading inside a Channel Up since May 1st. The last two weeks the price is pulling back after a Higher High rejection and Double Top on Resistance A (4.888), aiming at the bottom of the Channel Up. That is a buy opportunity to target 4.888 again. If on the other hand the 1day MA50 breaks (is untouched since July 20th), sell and target 4.222 (Support A). Keep an eye on the Rising Support of the 1day RSI also for early bearish signals. Follow us, like the idea and leave a comment below!!
TVC:US10Y
by TheCryptagon
5
$DXY & $TNX & Rates show signs of exhaustionThe US #Dollar has pulled back a bit: At MAJOR SUPPORT At Green Moving Avg = Support RSI is at 50 (neutral bullish unless crosses lower) Weekly TVC:DXY is 50-50 The RSI is curling over but the MACD is now above 0 = down trend over Hmmm, interesting scenario Not sure what to make of it Monthly #currency ------------------------------- The 2Yr #Yield broke the recent up trend. While it has performed better than shorter term #interestrates it's gotten weaker recently. The RSI & MACD have been trending lower for some time and it's much easier to see on a weekly! Look @ that Severe Negative Divergence! Could rates be DONE? ------------------------------- The 10 Yr #Yield on the other hand has built good deal of steam lately. Weekly it is overbought. Monthly it's overbought as well. But what is interesting is that the MACD has only been higher 1x than current scenario. MACD histogram lower (arrow) = future MACD neg crossover? However, it's nowhere near as weak as short term #interestrates TVC:TNX
TVC:US10Y
by ROYAL_OAK_INC
🔥 Bonds Are Predicting A MASSIVE Crash 🚨The Bond Yield Curve, which can be calculated by substracting the US 2 Year bond yield from the US 10 Year bond yield, has been inversed for quite some time. An inversion of the bond yield basically means that bond traders require higher returns on short-term bonds than on long-term bonds, which translates to short-term bonds being more risky than long-term ones. This only occurs when bond traders anticipate an upcoming crisis. The inversion on itself is not necessarily bearish, but the "un-inversion" is very bearish. As seen on the white chart, once the line crosses the zero line from below, it has always predicted an upcoming crash. With the Bond Yield Curve recently seeing a strong "bullish" move, it's likely that we're going to hit 0% in the near future. Consequently, this signals that a market crash is on the horizon. Whether history will repeat remains to be seen. However, we had one of the strongest yield inversions in history, which doesn't bode well. Do you think that a crash is coming? Share your thoughts and charts.
TVC:US10YShort
by FieryTrading
15
US10Y: Soaring Bond Yields as Federal Reserve Maintains Hawkish The Fed Hawkish Stance During Wednesday's address, Federal Reserve Chair Jerome Powell reinforced his stance on tackling inflation with a more cautious approach. He emphasized that the central bank is not yet finished with its efforts to curb inflation and hinted at the possibility of implementing multiple interest rate increases during future monetary policy meetings. Powell's statement comes as a response to the ongoing challenge of bringing down inflation, which has consistently remained above the central bank's target of 2%. Notably, some Fed officials have emphasized in recent speeches that inflationary pressures persist. They specifically highlight core inflation, which excludes the volatile prices of food and gas, as not decelerating as rapidly as overall inflation. The aforementioned statement supports the potential scenario of higher Government Bond Yields in the future, as an increase in interest rates typically correlates with elevated yields. Technical Analsyis The U.S. government's 10-Year Bond Yield has undergone a retracement, precisely at the 0.5 Fibonacci ratio, establishing a support area. Notably, the yield currently exhibits a bullish trend as it remains above the EMA 200 line, indicating positive market sentiment. Furthermore, the Falling wedge pattern suggests a continuation of the prevailing trend. Complementing this observation, the stochastic line crosses within the neutral area, further bolstering the case for a possible upward movement toward the target area. It is important to keep in mind that once the target/support area is reached, the roadmap provided may no longer be valid. If you find this analysis helpful, I encourage you to show your support by clicking the rocket button and sharing your opinions in the comments section below. "Disclaimer: This analysis is intended solely for educational purposes and should not be considered as a recommendation to take a long or short position on the TVC:US10Y ."
TVC:US10YLong
by financialfreedomgoals101
9
XAUUSD – finding few friends with the USD in beast modGold has found few friends of late as both US nominal and real Treasury yields rocket higher, and the USD has been on a one-way bull trend. If funds want to play defence in the portfolio, they increase their USD exposures, given the strong inverse correlation vs. the S&P500 and NAS100. Funds can also get a 5.58% yield holding risk-free US 6-month T-Bills and when gold has no yield this is an opportunity cost. Technically, we see strong support at the channel base, and the Feb/March lows, and combined with the RSI at an extreme 19, there is some scope to bounce, or at least consolidate here. However, that will again require buyers in US Treasuries, which could compel traders to take profits on USD longs. Catalysts this week for traders to navigate and could affect price action in XAUUSD - ADP payrolls, ISM services and nonfarm payrolls.
PEPPERSTONE:XAUUSD
by Pepperstone