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DGS10

THREE WORDS THAT YOU SHOULD KNOW — TNX GOES NUTS!Bank of America says the recession and credit crunch could lead to large corporate defaults. Credit strategists at Bank of America note that the fallout from the recession and credit crunch could see $1 trillion in corporate debt eventually become insolvent. This is largely due to the fact that banks have already begun to refuse lending conditions after the collapse of Silicon Valley Bank. US debt growth has also slowed in recent years, and a "full blown" recession has yet to be officially declared. If a full-blown recession does not occur in the next year or two, the restart of the credit cycle will be delayed. For now, analysts still predict that a moderate/short recession is more likely than a full blown recession. Markets are increasingly nervous about the prospect of a future downturn, with the New York Fed's Recession Probability Index projecting appr. 70 percent chance of a recession hitting by April 2024. The risk comes from the Fed's aggressive 21-fold increase in interest rates over the past 15 months to tame inflation. The US Federal Reserve, having fired a lot of "HIKE RATE" ammos over the past two years. And certainly has fulfilled its goals. In fact, in the second quarter of 2023, the rolling 12-month growth rate of the Consumer Price Index (April value = 4.9%) was below the Core CPI (April value = 5.5%). In human words that means prices of food and energy are deflating year-over-year. To some extent, the risk is also heightened by the recent banking turmoil, as lenders suffer losses on their "HELD-TO-MATURITY" (and in fact "READY-TO-SELL") portfolios of long-term corporate bonds and US Government bonds, as well as in due to a sharp outflow of deposits. The technical picture in TVC:TNX says the key trend is still strong, thanks to tailwinds from the first quarter of 2022 and support of Weekly SMA(52). The second half of 2023 is off to an interesting start. High quality "AAA" 10-year Bond' yield is back to pain levels corresponding to the collapse of the FTX cryptocurrency exchange last fall, as well as the collapse of regional and cryptocurrency banks as early as this spring, 2023 (like SVB, FRC and others). At the same time, real (that is, minus inflation) rates are now certainly much higher, against each of those two marks, as inflation is down.
TVC:US10Y
by Pandorra
2
SPX | Of Course I'm Lying (?)I am not lying. I am completely disproving my latest idea, on how to short SPX. That idea went on Editors' Picks. And I am now killing it. I am not kidding, April Fools is for fools. I don't consider me or you a fool. So I am being serious. Chart analysis is not always straightforward. Pinpointing tops and bottoms is the ultimate bet for a trader. As most of you know, this is very hard sometimes. In 99% of a chart's movement, the trend is continuing. A significant trend change is very rare. Significant evidence for a trend reversal are VERY RARE, and not apparent in all timeframes. This is a chart that shows clear evidence of reversals. On the weekly timeframe, SPX analysis has showed significant evidence of peaks and bottoms. Believe it or not, SPX and NDX are showing evidence of going long. But what about long-term? Now THAT is a hard conversation. KST (and many other indicators) can show us incredibly early signs of price stagnation. Signs of stagnation in long-term charts however, can take DECADES to play out. SPX/M2SL Technicals were peaking in 1957, but the peak in SPX prices came 6 years later. For the standard SPX chart, things took even longer to play out. It is as if we are in 1957. And there is more evidence towards such a realization. What I did here was basically compare the .com bubble with the Roaring '20s. The .com bubble was just a very-fast version of the Roaring '20s. If we slow down NDX a little, we end up with the following: The effect of bubbles is apparent in different periods, and in different scales. The same laws that shaped the 1950-1980 price movement, may be dictating the movement of today's stock market. The Roaring '20s still has an effect on our moves. We may be living inside the reality-distortion field of the .com bubble. KST Peaking is an EXTREMELY early sign of stagnation. Price continues upwards, albeit at a slower rate. Now as we speak, KST reaches this exact point of peaking. This has proved an extremely early sign of stagnation. Will this time be different, and instead KST is showing an immediate sign, an abrupt crash? Perhaps things are too simple after all. Long Live the US! P.S. Remember, the stock market is for the patient ones, those who plan for decades ahead. Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPXLong
by akikostas
13
SPX | Spaaace!!!Spaaaaaaaaaaace! Let's make a quick party, also bring a cake to celebrate! Make it quick, because it's late and I am tired and I should be sleeping by now. We have reached the top of the world. Well, equities have. It is time for them to lose value big time. Their successor is here, bonds. I have talked about it extensively in my last idea. This is an urgent idea I wanted to post. It seems that day-by-day we might be witnessing the peak in equity price. And this idea is dedicated to the person who gave me the crazy idea to analyze something like that. The idea is simple. We all know the immense yield inversion, it is definitely ugly... What if we found a way to analyze SPX based on the yield inversion itself? That is the idea of @CryptoTaoist and I am very thankful for it. All credit and all the likes this idea gets, are dedicated to this person! Yield curve is a way to calculate money creation (normal times) and money destruction (inverted times). Green is good for money, red is bad. No wonder dollars are green but flammable! We also know that yield inversion is strictly bound to recessions. I will naively try to add these two together, equities and inversions to get an idea of when the recession is actually beginning. Me and others have posted about how the US isn't in a recession yet. This can be seen if we multiply SPX by yields. In a sense, this year we had no recession for the US economy. Please bring a real cake, not this lie... The next part is analyzing whether SPX is performing good or bad considering the current rate of money creation / destruction. In a sense, dividing SPX by the yield curve. If you calculate the yield curve as US10Y-US02Y you will have trouble analyzing it compared with SPX. Captivity of Negativity. Zero values for the denominator make a mess of the chart. You could instead opt for a bodge, to fix the denominator by adding 1. While this works, it is not harmonic enough for my liking. I will create a new yield curve, but instead of standard yields I will calculate it using modified-yields. More about the modified-yields in this idea below. The new yield curve (in blue) is following the standard yield curve (in orange). So it can be considered a satisfactory replacement. Do note that on the numerator we have modified(US10Y). On the denominator we have modified(US02Y+1). I add this +1 so as to further normalize the chart. In normal times US10Y and US02Y have a difference of ~1%. To conclude, we divide SPX with the modified yield curve and we see the following: A surprisingly smooth chart shows us what we expected, that the US isn't in a recession yet. It is also incredibly straight, from 2010-2022 and today. This means that yield curve and SPX correlate very well, if we modify them appropriately. In a sense, dividing SPX by the yield curve calculates the following: How much SPX increases as money gets destroyed? If SPX can swim against the tide (money destruction) this means that it is very strong. A strong economy can hang on even when money is destroyed. US hanging on even with that immense of money destruction, means that it was (and perhaps still is) a very strong economy, which can withstand a heavy beating. Note: DGS2 is a good replacement for US02Y if you want to analyze old historical data. Feel free to notify me of indicators that calculate even older yields of the 2 year bond. But where is the ceiling in this chart? While the 2.0 Retracement proves a significant resistance point, it is inconclusive of whether it is the terminal ceiling. One answer may lie in the following chart: (I knew the cake is a lie!!!) We have divided by M2SL and multiplied by 10^12 to bring numbers to measurable scale. A normalized chart appears, and we also observe a curious ceiling appearing. Price obsessively tries to penetrate this ceiling, just like DJI/M2SL did in 2018-2020 Are we witnessing the very last weeks of the equity bubble? Tread lightly, for this is hallowed ground. -Father Grigori Captivity of Negativity is a reference to Bagwell of the Prison Break TV Series.
SP:SPX
by akikostas
11
Bonds Vs BTC and Equities What does everyone think about this? This is the conclusion forecast of all the previous ideas I've been working up to I don't see many people talking about the bigger picture of what is actually happening with Smart Money VS Retail TNX and BTC show the correlation TLT and the NDX show a similar but opposite correlation Bonds lead then Risk assets follow accordingly Wouldnt this make sense fundamentally? BTC Is a hedge against inflation so it copies the 10-year bond outpacing inflation Equities especially growth stocks are not a hedge to inflation so they have an opposite correlation to what interest rates are doing I think something big is going to happen and a lot of people will get shaken out. You can see the big fear narratives all stacking up before the new year! The whales have been trick or treating this holiday season and I think this X mas rally was a big trick for all the retail shrimp to get caught in the feasting season.
by AxeCapp
The Roadmap to Bitcoin and the NASDAQ 100 My observations: The 10-year Treasury bond is a leading indicator to show where smart money hedges its bets. The 10-year treasury bond is also perfectly correlated to Bitcoin. When this moves up, Bitcoin goes up. When this moves down, Bitcoin goes down. The NASDAQ 100 on the other hand has a lagging inverse correlation to the 10-year Treasury bond. The 10-year Treasury bond is currently taking the shape of an inverse head and shoulders and also is in an uptrend. We also have the Federal Reserve possibly tapering and hiking interest rates in the near term. The likely situation is that interest rates move higher from here. The prediction: What I am seeing in this scenario is that the 10-year bond moves up to the multi-year resistance zone which ultimately means that Bitcoin has 1 last leg up before a leveraged blow-off top scenario. This will also coincide with these events while they unravel, the stock market is currently in its A-B-C correction wave. After this point, it is likely that the 10-year Treasury bond will be rejected off the multi-year resistance and nose-dive south. This is when Bitcoin will start its massive correction and the Bitcoin dominance will fall off a cliff resulting in a massive Alt Season. During this time while interest rates go down, the stock market will then move to higher highs and there will be potentially some catalyst to bring it down to one synchronised dance. My points to support this theory: * Bitcoin is still in an uptrend. * The Fed is anticipating interest rates to rise and taper, which is a real possibility. * The 10-year bond is taking the shape of an inverse head and shoulders and is currently in an uptrend. In summary: There is currently a lot of fear in the markets and what I think is happening is that the big players are tax-loss harvesting risk-on assets, hence why the DXY has been gaining superior strength. This ultimately drives the risk on asset prices lower changing the sentiment of the market to bearish. In the New Year of 2022, smart money can re-buy back risk on assets at a cheaper price to give them a headstart to 2022.
NASDAQ:NDX
by AxeCapp
1