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Rising rates: Why is the 30 year yield so low? The 30 year treasury yield has traded under 3.25% for almost 4 years now. The Fed continues to hike rates on a quarterly basis and Trump is unhappy about rising rates. Every day we hear how the economy is 'in great shape', and jobs data is 'as good as it gets'. More significantly what is pushing up rates are increased treasury issuance and the Fed's accelerating Quantitative Tightening. So all in all why isn't the 30 year yield closer to 4% like it was only four years ago? For several years the market has priced in low expectations for the long term. The yield curve continues to flatten towards the lowest spreads since leading up to the great recession. (28 basis points on the 30-5 spread and 30 points on the 10-2 spread). At this rate the curve could flatten or invert in 6 to 12 months. An inverted yield curve historically is followed by economic recession. What's your thoughts?
TVC:US30Y
by dime
2
What LIBOR is Warning InvestorsLIBOR, the rate banks charge to borrow from each other, is a key measure of short-term borrowing costs that often serves as a gauge of financial distress. It's estimated that 50 trillion of assets are pegged to the LIBOR rate and lately it's been rising fast. Certainly a rise in LIBOR can be attributed to increases in the Fed Funds rate. But is that all, or is a perfect storm of financial conditions forming ahead? Subtract the difference between LIBOR and the 3 mo T-Bill rate and we find the notorious TED spread. When the 2008 financial crisis unfolded, one of the key signals was a soaring TED. Lately the TED has suddenly exploded above the 20 year median range to 58 points, almost as high as was reached during the 2016 earnings recession. In the chart we can see the increase in LIBOR beyond that of the rise in the Fed funds rate. This rapid widening in the TED spread implies stress in the short term credit markets, liquidation of speculative positioning, and a tightening of financial conditions. Consider that Floating Rate Junk debt totals almost 2.5 trillion alone, and you get a sense of why the impact can be significant. Over-leveraged entities could be in for some trouble because the LIBOR surge may run higher for some time yet. So whats going on? Certainly the cost of borrowing money has climbed, and may be forcing some marginal trade positions to be closed. We know that currently markets are facing a triple threat of : 1) Repatriation of overseas cash. Companies that were holding their offshore earnings in short term corp credit are no longer doing so because of 'repatriation'. The new tax law has made for tighter credit conditions and less available capital in the short term credit markets. 2) Federal Reserve tightening through rate hikes and unwinding its balance sheet. In addition to the expected 3 or 4 rate hikes this year, the Fed plans to unload 600 billion in Treasury securities, eventually selling $50 billion a month later this year. 3) Treasury issuance is expected to reach 1 Trillion this year and in subsequent years. Perhaps there may be other reasons for the surge in LIBOR? Feel free to contribute to the discussion...
F
by dime
The not so secret fate of goldLots of different future paths but if you are a long term investor it looks hard to go wrong if you just keep buying gold regularly each year. That's what the Chinese and Russians are doing (and they are no strategic or tactical slouches). Get the feeling we might get to the neckline and fall back - so will be playing that as initial set up in next few months if we drop and bounce on the rising support around 1300. Reasons being expected short term main market weakness this year (= dollar strength) will likely hold gold in check for now...though with Trump et al also wanting a weak dollar it is only a matter of time before gold has its day. I would go long for short term around 1300 if there is a bounce but take some risk off the table at the neckline and then only go back in above or if it drops and bounces hard on the rising trendline going back to Dec 2015. In the most bearish scenario Gold might have to revisit 1040 or even 800s in next few years (before it has its time to shine in the sun) but that is not my main set-up at the moment.
TVC:GOLDLong
by airswimmingape
1
HSI / 2008 vs 2018 : Feels like "Oops I did it again" !!!The comparison is easy, the debt level is even crazier than during the last credit bubble that bursted 10years ago.. Real economies just started to get over it but it seems like traders haven't learnt anything for the previous crisis !! As I always say... trading is about cycles and no matter how ofter I hear "This is different now..." or things like that... the thing is that cycles repeat through time.. credit bubbles or speculative bubbles have always burned the markets even though the economy was looking good and strong... Will we repeat the cycle again... I tend to say yes ! But it's too early.. Sure thing is that I'll have a close look at what could happen on the same fibonnacci extension than the one that triggered the previous krash ! Just in case ;) Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) You can check my indicators via my TradingView's Profile : @PRO_Indicators Kindly, Phil
TVC:HSI
by PRO_Indicators
8
MSFT Cutting Credit Spread Losses ShortThe name of the game in trading is knowing when to cut your losses short.  Goldman Sachs upgraded MSFT in premarket trading today, which caused a gap up in the opening price.  We're in the red about $105 from an originally $252 max credit trade.  We're going to wait for market close before cutting our losses on the position. If the close looks to be as if it's going to be above our moving averages (highly likely), we're going to take the loss. If not, we'll hold the position through Monday to determine whether to continue playing the game and even potentially open another credit spread on the Bull Put side for some time premium
NASDAQ:MSFTShort
by EdgeAnalytics
Gold Miners Could Pullback Before Resumption of Trend.Gold prices have been volatile, flucuating between $1,275 and $1,220 as markets remain indecisive on what stance to take: is the Federal Reserve going to continue hiking assuming the economy will "gradually improve," or with traders continue to look for safer locations to place there cash? According to recent capital flow data, the GLD has seen redemption as market participants choose to overlook the weakening global economy and its implications. Nevertheless, with inflows into risk ETFs like SPY and HYG, gold miners could see their shares pull back from this historic gold run. Technically, after GDX broke out of a longer-term downtrend, price action began to oscillate within a narrow ascending channel. Prices are likely to pullback to channel and price action support of $19.80, while a confirmed break (or daily close below support), miners could fall to $18.85 and, potentially, $17.85 - also nearing the 50-day EMA. However, if the popular mining ETFs can remain above support, price action could challenge $21.88 and $23.03. Overall price action and trend momentum still remain rather supportive to the upside. Please feel free to comment and share charts! And follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
AMEX:GDX
by CommoditiesTrader
Spy Weeklys In the Money,At the Money or Out of the Money?Spy Weeklys In the Money,At the Money or Out of the Money? What strike price is the best to trade for max bang for the buck? First you have to get the direction right and assuming you did that next you have to decide which strike price is the best to play for max profit in a short time period. Attached is a chart that shows the SPY trades we followed over 2 weeks that we were mostly out of the money with one trade at the start the SPY 191.50 CALL bought at $2.00 then sold at $3.85 for a 90% profit. We noticed that the out of the money option were up around 200% in one day. So the at the money was profitable but the out of the money options were noticeably more profitable. During the following 2 weeks we followed mostly out of the money options with remarkable profits. On Thursday March 3 2016 we followed 2 options bought on Thursday when we got a bottom signal. They were out of the money options, one option was SPY Mar 11 201 CALL bought at $.90 that had a high for the day of $1.74 on Friday for a 90% profit. We usually follow options with at least 2 full trading days to expiration to allow time for the option time to play out. But on Thursday we decided to also followed an out of the money option with less than 2 days to expiration which we called The Gambler it was a SPY Mar 04 200 CALL bought at $.40. We decided on the 200 strike because we wanted something that was out of the money but had a chance of getting in the money. It got to $1.36 for a high and a 240% profit. The bottom line is the out of the money options apparently have the greatest profit potential but you have to be aware of the risk involve especially as you approach expiration and the accelerated time decay on Thursday and Friday the week of expiration RISK DISCLAIMER Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital. topandbottomtradesignals.net
AMEX:SPY
by GIFTEC
How to Profit Regularly with SPY Weeklys Playing the SwingsThere are numerous opportunities every month to profit from the swings in the minute charts if you can find those trading entry and exit points. If you know if you are looking at a top or bottom of a swing you greatly increase the odds you are trading in the right direction and knowing when you at the other end of your trade can help you maximize you profit. Whatever you are trading knowing when the conditions technically ripe for a change can be monumental to your success. the attached charts show how the charts show entry and exit points and what kind of success you can have. I have numerous example of signals and trades on website for you to checkout. topandbottomtradesignals.net
AMEX:SPY
by GIFTEC
High - Low Bollinger Bands These work better than the standard Bollinger Bands for setting extreme ranges. What I use these for is to use an oscillator to find an buy / sell signal then take that to the H L Bollinger bands and mark the spot. Most of the time, you will find that the price does not exceed this spot for the duration (length) of the H L Bollinger bands. This makes them good for doing Credit Spreads such as Put Vertical Spreads and Call Vertical Spreads. Since the price will normally not exceed the bands at the extreme point, the trader can profit from the time decay and other factors.
AMEX:SPY
by SpreadEagle71