How Joe Rekt the EconomyOverview of the yield curve indications on potential liquidity crisis occurring in the near future and leading to downturn in equities.
Interest-rates
EuroDollar Futures CurveThe EuroDollar futures market is pricing in rate hikes as seen by the upward slope on the left, but the peak of the curve (contracts which expire in June and September of 2023) suggests that investors believe rates will reach their high and then go down after that and keep going down well into the foreseeable future.
This is an ominous sign that the Federal Reserve, and likely central banks all over the world, will be forced to abandon their current monetary policy tightening cycles and go back to near zero or zero rates once again (and likely quantitative easing of an unprecedented magnitude as well. $200B per month in treasuries?).
Bottom line, the downward slope in yield marks the approximate time of the next recession, according to the bets that are currently on the table. As always, anything can happen and opinions can change.
Buy the dip < Sell the rip
The #1 Chart to WatchLadies and Gentlemen, please take your seats.
(...the music stops)
Okay, thanks for playing. Good luck to all of you!
The investment strategies that have worked for the last 40 years will no longer work. The true bear market is here. This will absolutely 100% NOT be a recession that will be forgotten easily.
It most likely will be a depression via stagflation which we have never really experienced long-term.
Our leaders won't admit it but *News Flash* the Supply Chains are NOT getting fixed like they were before. China has no incentive or interest to fix them and we are the world's biggest debtor. We got 20% of all our imports from them in 2021. That doesn't sound like a lot but that 20% is involved in the supply chains of 70-80% of our goods. The Chinese gov has already warned its people of the incoming food shortage and have been far more honest with their people than our Western leaders have been.
Good luck in the New World Order!
Courtesy of the World Gov. Summit 2022, the IMF, World Bank, etc.
(Not Financial Advice, Just what I see.)
TLT BreakThe iShares 20+ Year Treasury Bond ETF (TLT) tracks an index composed of U.S. Treasury bonds with maturities greater than twenty years. The price of TLT goes down as interest on 20+ year U.S. treasuries goes up. High inflation is driving interest rates ever higher . If inflation does not slow soon, a decades-long trend could end, as this chart is warning.
The monthly exponential moving average (EMA) ribbons have experienced their worse violation in the fund's 20 year history. Typically the monthly EMA ribbons act as very strong long term support. The lower 55 month EMA band can act as a low risk to reward long entry. The price at which the monthly candle closes is determinative.
Fortunately, there is roughly an 80% chance that the 20-year bull trend in the price of TLT will hold in March 2022. (This probability comes from the standard deviation from the monthly mean). So for now, at least, the trend is likely to continue. However, the chart suggests that the decades-long trend is dangerously close to breaking.
Bear structure still in play #Bitcoin #FOMCAggressive rate projection for 2023 by the #FED was the main highlight from the meeting
in an effort to curb #inflation expectations
2.5% is the target of it expectations for 2023
(which is unsustainable due to the high levels of debt in the system)
$DXY needs to hodl the line 👁🗨*This is not financial advice, so trade at your own risks*
*My team digs deep and finds stocks that are expected to perform well based off multiple confluences*
*Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management*
FOMC meeting next week, February 16, 2022. Here are our expectations for $DXY.
!! This chart analysis is for reference purposes only !!
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Mortgage Rates Back In An Uptrend Trend On 30 Year-Fixed Historically in America the interest rate for a 30 year fixed has been in a multi-decade down trend. As of January 2021 the rate for a 30 year fixed dropped to a historical low of around 2.65% and has since reversed in trend. This year we can potentially see rates continue to rise up to 3.75% as we're in secondary uptrend on the line chart. Currently we're at around 3.45% up 30% from 2.65% we seen last year.
Stocks To Watch This WeekThe Market's longer term uptrend still intact. Interest rates are driving the market.. These names have shown good relative strength and accumulation volume and most are in the growth sector. This may give good risk/reward entries on some of the best names. Some of these charts still need to confirm their price action. This video is my watchlist. Most of these names are at or near all time highs or multi year highs. There are 21 total stocks on this list Many of these have IPO'd in the last few years and still have a growth story ahead of them. Know your time frame and risk tolerance. Know your earnings dates! I go through these quickly so grab a pencil and paper and jot down the names that look interesting to you and then make the trade your own. Good Luck!
ECPG a good play on the financials sector. Great risk/reward.With growth and inflation rising, leading to a steeper yield curve, financials should continue to perform. One name that sold off meaningfully last week was ECPG. The debt collector should continue to do well in the immediate term given the macro tailwinds to the sector. I'd be a small buyer here, playing for a return to the recent range.
Inflation hints at potential moves for Gold and USDRising inflation has been the question many analysts, investors, and traders want answers to. Fortunately, these answers may come soon as Federal Reserve Chairman Jerome Powell is set to take the stage (virtually, of course) to address the future of US Monetary Policy post Coronavirus and, hopefully, answer the myriad of questions regarding the Fed’s stance on inflation.
It is the Federal Reserve’s mandate to have inflation hover around 2%. However, with low inflation rates before the pandemic, Jerome Powell runs the deflation risk due to US citizens not being employed.
Analysts predict that the Fed will release a new tool to increase inflation for a more extended period, increasing growth and pricing power. Rick Rieder, BlackRock’s Global Chief Investment Officer of Fixed Income, stated that “the rate markets are anticipating the Fed is going to be dovish and willing to withstand inflation being higher for a more extended period.
Currently, the Dollar Index sits just under 93 alongside Gold sitting at $1,943 an ounce. Both are suspectable to change in policies regarding inflation, with both gearing up for a move that would see Gold strengthen and the US Dollar weaken even further if Jerome Powell hints at pumping up inflation.
What’s the link between Gold and inflation?
You always hear people say, “Gold is a safe haven” However, you may not know why, only that when stocks are selling off, Gold is picking up. What is one of the “haven” attributes that people state as a reason for buying gold?
As you can guess by the article – Gold and inflation go hand in hand. That is, as inflation increases, so do, theoretically, the price of Gold. We could go into the nitty-gritty side of things, take out our Econ 101 books, and talk about M1, M2, and M3 money supply, etc. However, what it boils down to is the supply and demand of money versus the supply and demand of Gold.
We all know that the Federal Reserve has been printing money as a drastic attempt to curve the Coronavirus’s economic effects on the financial markets. However, this increase in the supply of money risks the devaluation of the US currency. As supply and demand states, an increase in supply, Ceteris Paribus, decrease the price. In this case, an increase in supply implies an increase in spending and demand for goods and services, incentivizing businesses to increase their prices – inflation!
If the price of goods and services increases, one US dollar buys less, therefore losing its value.
Gold is historically resilient against inflation
However, the supply of Gold is relatively set year over year, alleviating the problem money has as there is no central bank increasing/decreasing the supply. Since inflation does not affect Gold’s value, the logic holds that people would instead hold Gold since it will not lose its value through periods of inflation, unlike the US dollar.
Inflation also affects many US dollar-denominated bonds. Bondholders get paid a set amount of interest. However, when inflation rises, the real yield the bondholders get paid gets diminished. Real yield is calculated by the nominal interest rate subtracting the inflation rate. In a 0% interest rate environment alongside rising inflation, sees real yields drop into the negatives. Negative real yields push investors away from the US dollar and into other positive or even neutral assets like you guessed it… Gold.
So why inflation?
With all these consequences regarding inflation – why is Jerome Powell insistent on maintaining their 2% guidance? Inflation is essentially a bi-product of stimulus that the Central bank and the government implement. Essentially, the government and central banks’ goal is to get the economy moving by increasing employment and increasing the number of money households have to spend throughout the economy. An increase in demand for goods and services incentives businesses to increase their prices, hence inflation.
However, there is a more critical reason why Jerome Powell wants to try and spur inflation – its that he does not want the opposite, deflation. Deflation is when prices of goods and services decrease. This is a destructive cycle for an economy to enter into as consumers get into the mindset – “Oh, prices are going to get cheaper in the future? I will just wait then.” – However, that is a whole other topic.
For now, all eyes on the head of the money printer, the US Dollar, and Gold.
German 10-Year Bond Yield - lower yields aheadGerman yields seem to be tracing intermediate wave 3 down of primary wave 5. Yields should decrease below -0.91. If the level at -0.14 is touched, this scenario should be void as primary wave 5 down may have already been completed. FOLLOW SKYLINEPRO TO GET UPDATES.
Interest rates are about to break LOWERwww.RefiwithJustin.com if you own a home in Colorado or Texas!
Monthly view of the 10 year yield here.
Yield touched current levels in 2012 in anticipation of QE3.
Again in June 2016 over Brexit.
3rd time in August/September of trade war.
4th - Coronavirus? I would bet this is this what initiates the break down.
10 yr around 1% or lower coming soon?
AUDUSD - gains on weaker US dollar.Inflation expectation is creeping higher in Australia.
Currently, Core CPI is at 1.60, CPI Housing Utilities is increasing, the inflation rate is currently 1.7 and up 0.1 from September.
With the US CPI coming out today better than expected but less than the previous reading traders have sold the US dollar.
The likelihood is that the Fed keeps interest rates as they are today at the FOMC meeting but narrow the gap between the US and Australian rates in the early part of 2020.
The AUDUSD has started to create higher highs and higher lows and this could continue if the trade war news and tariffs, in general, don't cause any further global economic damage.
EURUSD | Wait for Correction then SELLWait for correction to the weekly central Pivot of next week, then Sell between the 21/34 EMA and below the weekly M3 of next week .
Conservative target is M1 of future weekly Pivot and agressive target is at S2 future weekly Pivot .
Shorting Euro is generally a good idea these days because you also get money (Swap) from most brokers for holding the position over night.
Global Central Bank Interest RatesGlobal Central Bank Interest Rates of Major Central Banks
Made using Quandl
Long EurUsdcheck out my chart, i dont really have much of an insight other than a couple bounces in a downward channel coupled with the political economic atmosphere and the fed meeting in two week, i think there is ample opportunity for a huge up swing if fed cuts rates. Time to front run the trade my friends.
Silver is a Screaming BuyAll long-looking indicators point to silver being undervalued vs gold. Top chart shows silver candlesticks vs gold red line as percentage returns since 1998. Middle indicator is the Trader's Dynamic Index (TDI) which holds a combination of moving average, volatility and momentum trends. Bottom indicator is the infamous Gold:Silver ratio.
Silver is sitting on top of the .382 fib level support shown in the chart, which is where the current cost of production resides around $14.75/oz. Low risk, high reward - this is a perfect setup for those interested in making an inflation play going toward negative rates, QE4 and the end of the petrodollar.
% Returns Analysis: Silver below Gold -> Silver undervalued
Fibonacci Level: Strong support at cost of production near $14.75/oz
TDI: Bullish divergence in formation
Gold/Silver ratio: 83:1 -> Silver undervalued
Precious Metals, the historical safe haven.
What can be said about gold and precious metals? Gold has always started out as sound money, followed by monetary expansion, devaluation, and eventual collapse. Take the Roman Empire for example, money started as solid gold coins which eventually expanded with a mixture of base metal, than became worthless. Remember when a quarter was silver, penny was copper, and the rest was a mixture of silver, copper? Now? They are worthless base metals. This trend continued throughout history. Here we are again. This read will go through some of the current economic conditions with some commentary and suggestions. So, let's start with some recent economic news:
7 out of 9 recessions since 1950 came after rate hikes.
Auto-Loan Delinquencies are higher today than the peak of 2008 recession.
Corporate Debt has doubled since the 2008 recession.
National, student, personal, and credit card debt is higher now than 2008. At Record Levels*
Germany and Italy GDP Growth Rate is -0.2, Japan GDP Growth Rate is -0.6
New Home Sales fell 19% in 2018. Existing Home Sales have fallen.
Auto-Sales are down on average 3%, up to 6% by manufacturer report.
Credit Card delinquencies are up 17% since Q1 2016.
Derivatives up more than $100 trillion since 2009.
China posted two-consecutive contraction in manufacturing.
1 in 3 Americans have less than $5,000 saved for retirement.
69% Of Americans Have Less Than $1000 In Savings
So, what's going to happen?
- The ugly truth is economic and monetary pain. Global economic weakness and contraction is here. Once the markets finally react to the toxicity of the monetary system, the central banks will react like they have in the passed with slashing interest rates, debt purchasing, and bond buying programs. But this time, resulting in the weakening or even failure of a currency. Let's go back to that monetary trend. Gold, expansion, devaluation, and than collapse. It's obvious where in the trend the monetary system is. We should expect astronomical injection of liquidity, purchasing of debts, and QE.... as a start. There are a few nations which have foreseen this and have been buying gold like never before. So, if they can foresee the problem and offset their exposure to it.. why aren't you? Have you noticed that gold has made a dramatic comeback after the bear market started? Gold has broke $1300 barrier with ease, and continued upward even with the stock market gains. Regardless, the price of gold must keep up with inflation. This tells us that the smart investors are starting to pile into safe havens, regardless what the market or central banks do. The recent actions from the Fed have proven that the stock market is indeed a bubble. The 0% interest rates fueled the bubble, the interest rate hikes popped the bubble. We saw proof of this:
*Dec 21st, 2015 - (Dow 17,700) - Interest hiked, Dow fell 2,060 points until the Fed calmed markets by stopping rate hikes until after elections.
*Feb 2018 - Dow fell 2,244 points.
*Sept-Dec 2018 - Dow fell from 26,828 to 21,792 a drop of 5,036 points.
*Feb 2018 - Fed announces pause in rate hikes, Dow jumps 400-points.
As you can see, the Fed and interest rates have a direct impact on the stock market. Rising interest rates have put Emerging Markets in a tough spot, as 2018 saw EM Currencies drop anywhere from 20-50%. Recession is on the horizon, even in Europe. The fear is that the ECB will be powerless to calm any financial turmoil as ECB interest rates are already negative and QE is still being implemented. In the US, the Fed will slash rates to 0% immediately, followed by QE, but, this time the dollar will take a severe hit.
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What to do from here?
You see the storm far off and it's growing as well as coming towards you but where you stand, it's relatively calm. The problem is complacency in the calm or believing the storm is long away from hitting. But, storms are variable and can move any direction and gain speed. So, why not acknowledge the problem and prepare now? Now that gold is not $2,000+/oz. Why not look into gold mining stocks that are up 8-25% since November? Start putting more into precious metals and less into stocks, forex, and crypto. 15%-20% of your portfolio is not enough. Stocks, currencies, crypto can drop 90% in less than a year, but precious metals will always have value. Ask yourself how long it took for the Dow to reach 26,600 points and then ask yourself how long it took to drop 4,000 points? Take a moment to think about that. 10-years to grow to 26,000 vs 4-months to fall 5,036, where is the stability in that? This isn't a case of "eventually it will happen", it's already begun. The gains and drops are volatility that has set in.
Gold Price Targets: North of $2,000 / OZ. Realistic, 3-5
Is Cryptocurrency a good investment?
No. It is now commonly known as digital fools gold. Without internet, you can't access or spend it. It has no value, its another form of fiat. As long as the people believe crypto is worth something, it has "value" but based on its current price, investors and traders are realizing its true worth. Worthless. Nothing. Nada.
What are some good mining stocks?
BTG - WRN - ASM - AUY - GLD, most of these stocks are up anywhere from 10%-20% (1-Week to 3-Month). Compare that to stock market, which are down on average 20%.
What stage are we at and when could this happen?
We're Q1 of 2007, heading into Q2. Remember, Q2 is where all the trouble began when rates adjusted.
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In conclusion.
The numbers are out there, you can see it all for yourself. It doesn't take an expert to see the numbers are bad and the financials are toxic. It just takes effort and interest. If we take all of our financial news from major financial news organizations (stars with C and the other with B), then we're not going to see it until after it hits. Just remember, their "experts" said there was no recession coming and this were great. A recession isn't official acknowledged until its already here. What stage are we at and when could this happen? We're Q1 of 2007, heading into Q2. Remember, Q2 is where all the trouble began.
EURUSD Currency Pair Falling Faster Than a MeteoriteThe EUR/USD Currency pair will continue to fall. Why will t his happen? There are several factors directly responsible for the rapid decline of the Euro. The first one is interest rates. Bond investors invest their money in countries that have rising interest rates, such as the U.S.(2.25%). On the other hand, bond investors withdraw their money and investments from countries with low interest rates, such as the Euro Zone (0%).
Another reason for the rapid decline in value of the Euro is GDP. Euro Zone second quarter GDP growth edged down to 2.1% from first quarter GDP readings of 2.4%. More technical factors explaining the recent decline of the EUR-USD currency pair are discussed here .
GBP/USD is falling hard and I do not see it stopping!!!Here I see the GBP has been having an economic battle within its financial systems. Here I see the final decline for the year of 2018 and even beyond I'm set for a LONGTERM SELL and my stop loss is above the monthly high but i dont have a target the floor is a long way a way, and may even look to create new ALL TIME LOWS!!!
SPY following giant descending triangleAMEX:SPY
S&P 500 is following a giant descending triangle, even though on 04.18.18 it has not touched the triangle.
Overall the market is bearish short term , despite being in the earnings season. In a bullish market some neutral and positive earnings report would have been interpreted as bullish .
Increasing treasury yields may be partly to blame. As investors are buying more bonds for safety the yield increases and we passed the 3.0% yield today which carries a psychological importance as well (e.g 8 years ago it was 3.9%).
Adding political and global uncertainties to this created a market that is much more easily spooked compared to Jan'18. See CBOE:VIX
The critical resistance for the S&P 500 index is at 2580. If we break lower the chances are that mutual fund managers technical analysts are going to advice :
"sell, sell, sell".
NASDAQ:TLT NASDAQ:IGOV AMEX:TLH CBOE:TNX
If we do break the 2580
