THE 40 YEAR BEAR MARKET IN 10 YEAR TREASURY NOTE INTEREST RATEThe attached chart shows 40 years of declining 10 year rates. As we all know, that rate is the basis for mortgage rates and just about everything else. During that half cycle the housing market boomed, the stock market boomed and generally speaking, corporations and individuals prospered.
But that trend has ended.
Thursday I would have said that rates would either remain low for an indefinite period while inflation soared or rates would be raised to quell inflation. But Friday Central Banks around the world announced tightening.
The party is over!
It is time to batten down the hatches, lock in long term profits on stocks, rentals and any other investments that correlate inversely with interest rates.
Obviously the major players saw this coming and started bailing at the first of2022.
Now us little fish must do what we can to avoid losing the wealth we have.
As an aside, it was announced last year that Bill Gates was diversifying into farm land. Obviously that anticipates food shortages and inflation.............
I will post more on this once the picture becomes clearer.
midnitepoet
Mortgage
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.
Cup & Handle Pattern Forming For RKT Cup and handles typically take 1-4 weeks to play out. 14% of the float is shorted but RKT has less than 1 days to cover. Making RKT a pretty weak short squeeze opportunity IMO . But I do like the value for RKT and the chart set up, I worry about what a rising rates environment would do to their business (higher irates less people looking for homes)
UWMC weekly looking to break some resistance UWMC weekly right now hitting the middle band around the $8.60 range
When we advance passed that we should move to about the $10.20 range before more resistance is hit with the upper wicks on previous candles. After that it could go back to all time highs. Let’s see how this one plays out in the coming days and weeks.
Black Swan - The Housing BubbleSpeculative Idea for MBB (Mortgage-Backed Securities ETF):
- Why is there a speculative housing bubble in the middle of a crisis?
- "A major catalyst of the general financial crisis of 2008 was the subprime mortgage crisis of 2007, when a rising wave of defaults on home mortgages sent the value of mortgage backed securities plunging."
- "They're in trouble right now," as Colleen Denzler, an investment manager at Smith Capital Investors, which has about $350 billion in assets under management (AUM), and who previously was the global head of fixed income at Janus Henderson, told BI. She is now underweight MBS. "Bubbles get popped when things turn around either through some sort of crisis or through a change in what caused them," she said. "This could be a while, and that's how we're positioned," she added.
- "Other complex debt securities whose plunging values were a catalyst for the 2008 financial crisis are rising in popularity today. The synthetic CDO, a pool of derivatives linked to various categories of debt, is among them. Pessimists fear that history may be set to repeat itself, and that cautious investors should take cover."
- NY Fed Report: Total household debt rose by $85 billion to $14.64 trillion.
GLHF
- DPT
UWM is turning around, have a good feelings about this!There has been a lot of drama lately in the SPAC market ( SPACK ATACK) as most of them have lost significantly.
However IMO this could be a long term profitable holding.
Here are the good news :
We see higher lows and the bottom has been set.
Macd has turned bullish on March 2nd and remained there. If Macd will cross above zero, bullish trend is confirmed.
We also will need to break above $10 and stay above it to confirm bullish move which may take another couple of weeks.
This is not a financial advice.
RKT Rocket readyRocket: Stage 6 launch, the 6th go at it here. Not quite ready yet, wait for some consolidation and be patient! Let the trade come to you. RSI needs to begin to heat up before I enter the Rocket launch.
Stocks: A good risk reward would be entering in the "area of value" along the trendline and set stops below support (draw your own or auto shown on TRND bot indicator.)
Calls: I am waiting on the breakout and buy signal confirmation.
Pay your mortgage with this trade but don't lose your mortgage! Good luck trade smart!
RKT - Prior Trades=Profit - Careful w/ Earning 2/25 AfterMarketRKT
Entry = 19.25 - 20
Cost Avg Down = 17.50 - 18
1st profit Target = 21.64
2nd Profit Target = 24
HODL Target = 618@28.00+
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This content is for informational, educational and entertainment purposes only. This is not in any way, shape or form financial or trading advice.
Good luck, happy trading and stay chill,
2degreez
Rocket Mortgage (RKT) Long SetupGood afternoon everyone,
This is my first post on this account but I have been spending the last four years or so analyzing technical analysis on equities, futures, and crypto currency. Almost all of my published ideas will be based on the following three principles/rules.
1. 1% Risk: This is the most important rule in my trading technique. No one should EVER risk more than 1% of their entire account on any single position.
2. Stop Loss: ALWAYS use a stop loss. This rule is extremely important and should be implemented with rule one.
3. Take Profits: Profit taking should always occur. Your first profit target for your position should cover your possible 1% stop loss, if not more.
As I continue to publish my ideas, I will explain the methods that I use in more detail!
Good luck and happy trading!
UWMC - Beat Down Buying Op - Earnings FEB 3 After MarketNYSE:UWMC
ENTRY = 9 - 10.50
1st target .5fib@11.81
2nd Target = .618fib@12.43
HODL Target = 14+
______________________________________________________________________________________________________________________
This content is for informational, educational and entertainment purposes only. This is not in any way, shape or form financial or trading advice.
Good luck, happy trading and stay chill,
2degreez
RKT - Buying to OpenBuying to Open 19FEB21 20 @1.35-1.50
Watching the 1hr for oversold entry in the 19.56 area.
Entry Target = 19.56
1st profit Target = 236fib @22.60
2nd Profit target = 382fib @24.14
HODL Target = 618fib @28.06+
______________________________________________________________________________________________________________________
This content is for informational and educational purposes only. This is not in any way, shape or form financial or trading advice.
Good luck, happy trading and stay chill,
2degreez
Why RKT not rocketing higher?Bull Case:
Technically:
1. AO divergence
2. Stoch oversold
3. Vol spike
4. Consolidation / Accumulation between 20-21
Fundamentally:
5. Forward P/E 11
6. 60% institutional ownership (croweded?)
Last Earnings results:
-Closed origination volume up 122% year-over-year to a record $89.0 billion
-Increased GAAP net income 506% year-over-year to $3.0 billion
-Announces $1 billion share repurchase authorization
-“Rocket Companies assisted more clients in the third quarter of 2020 than any quarter in our 35-year history,” said CEO Jay Farner.
Bear Case:
I cant find any. You tell me.
Housing is hot now
IPOs are hot too
Why isn't RKT much higher?
Dynex - where to next?Thanks for viewing,
Wow, some interesting keywords in their business description;
- LEVERAGED buyer of CMBS products (as you know, leverage works both ways. To juice gains or to ensure out-sized losses),
- ADJUSTABLE-RATE mortgages (I suppose not so bad - unless interest rates increase which to be fair seems unlikely right now),
- office buildings, retail, hospitality, and healthcare (all sectors hit super hard by the current health crisis. Healthcare because everyone is cancelling elective procedures - where all the money is made).
Default rates of CMBS products above 10% in June 2020 www.cpexecutive.com but have reduced somewhat in the 2 months following. I'm sure that is good news - unless the reduction was due to "forbearance" - when banks just allow a break in payments of overdue accounts (no chance of a debt default if you don't call in your debts). Around half of the increase from ~2 to over 10% delinquency was from mortgages over 90 days overdue and at least part of the decline was due to banks deciding not to require payments (for some undetermined amount of time).
Its like 2009 again - just replace CDO with CMBS and residential with commercial property. Asset backed securities are great - unless the value of the underlying asset declines significantly - which it has.
I don't know where it will go, up down or sideways All I know is it is in a down-trend and the return in no way reflects the massive risk. It seems tailor made to get flattened by the current environment..
AVOID AVOID AVOID. Or buy, its up to you. Maybe the Fed will bail it out.
So... What is next? Shortest recession in play?Stock market - Against all odds, S&P index has risen almost 32% since hitting a low for the year on March 23. The fact that it happened after a ferocious plunge of 35% between Feb. 20 and March 23, the most devastating sell-off since the great depression, made the feat even more remarkable.
As a matter of fact, the market posted its best quarter since 1998, with Nasdaq leading the way by soaring 30.6% for the quarter, the most since 1999.
Some speculated that the fast recovery was due to the big outflow of money from the fixed-income market into the stock market as emerging market fails to meet its debt obligation.
Others credited young investors (medium age of 31) on Robinhood (3 millions user added 2020, 13 millions total) with stock market's spectacular rally.
I personally doubt that the combined purchasing power of all Robinhood users is strong enough to sway the stock market.
Nonetheless, the stock market performance is not representative of the entire economy as there are more than 30 millions small & mid-sized company not listed on major U.S stock exchanges
GDP - What is even more incredible about the stock market's recovery is that it all happened after various sources estimated the GDP contraction to be around 30% to 50% in second quarter
Recently, Fed and policymakers projected the economy to shrink 6.5% (medium projection) in 2020 and the unemployment rate to be 9.3% at the end of the year
Corporate earning - According to data from S&P Capital IQ, 40 percent of the S&P 500, about 200 companies, have withdrawn their guidance and declined to make EPS estimate in 2020.
This lack of guidance has caused a lot of problem for the prediction of corporate earning.
A recent analysis by CNBC earnings editor Robert Hum showed enormous differences at historical level between the high and low estimates for the largest stocks in the S&P 500.
According to numbers compiled by the data provider FactSet, second-quarter profits will fall more than 40 percent.
Refinitiv is projecting about a 43% drop in second-quarter earnings.
Expect to get a more clear picture of corporate earnings around mid-July as banks release their corporate earnings.
Even though the stock market is reflecting more of future sentiment than current economic condition, the speed of its recovery seems to indicate that most investors believe that not only will the market erase all the losses in 2020, but also it will quickly resume the long-term growth trend equals that of 2019, which seems highly unlikely to me.
Again, it is hard not to notice the massive distortion between the stock market's performance and corporate earning.
Unemployment - Initially, the hope is that most temporary layoffs would not turn into permanent job loss. However, as lockdown extends, many furloughed employees are at the risk of becoming unemployed as more and more small businesses going out of the business.
Roughly 20 million Americans are currently receiving unemployment benefits and the insured unemployment rate is still high at 13.4%.
BLS said that discrepancy in unemployment # due to "misclassification" has been adjusted accordingly. An alternative measure of unemployment that includes discouraged workers and the underemployed fell to 18% from 21.2%.
Overall, better than expected unemployment # and steadily declining initial claim and continuous claim # have painted a much better picture for the labor market.
However, unemployment remains at historic levels. Output and employment remain far below their pre-pandemic levels, according to Federal Reserve Chair Jerome Powell
Pandemic - WHO reported around 180,000 new coronavirus cases last Sunday, the single-largest increase since the pandemic began, with two thirds of new cases coming from the Americas. Around half of the 50 U.S. states were also reporting a rise in new coronavirus cases, most notable in southern states that were previously spared from the Covid-19 ravage.
On Tuesday, United States recorded the biggest single-day rise in new cases since the pandemic began.
According to Bloomberg report, most experts believe a vaccine won’t be ready until next year.
Other factors -
Trade war with China and upcoming election...
#1. Median existing-home price last month was $284,600, up 2.3% from May 2019.
#2. The 30-year fixed-rate mortgage averaged 3.13% for the week ending June 18. Mortgage rates have drop to another record low.
#3. The number of Americans applying for home mortgages has hit an 11-year high.
#4. An index measuring homes in contract to sell, or pending sales, jumped by a record 44% in May.
#5. A record spike in U.S. retail sales, though the recovery happened after a huge dive of retail sales a month earlier.
#6. PMI has surged sharply after a huge plunge since the pandemic started. It is possible that the # is skewed by the lack of small business participation and the effect of China re-opened its economy ahead of other major economy.
I believe most current home buyers are not heavily impacted during this economic downturn and their purchase decisions are probably not indicative of the economic recovery.
Shortest recession is made possible because this economic crash was driven by the uncertainty of pandemic rather than economic fundamentals? I don't know. But if you only look at real estate and stock market, it surely seems so.
IVR- Retest phase before 12$ markAs I predicted in my published idea on the 5th of June, IVR broke the 5$ resistant strongly.
At the moment, IVR is going back to the 5$ to test the price again. However, I believe this price mark will act as a trampoline.
If you are familiar with Fibonacci Retracements tool, you will notice that the 12$ was around the 0.618 mark of Fibonacci tool. And in my experience, this is a very strong resistant zone.
Thus, I won't surprise to see IVR reaching the 12$ price before the end of this month before falling down.
Again, we never can tell exactly what future holds, so please do your due diligence.
But above all, good luck, enjoy and ride safe my friends!
Future price action pointI want to see where the price was going and where to sell it. The convergence of several intersections happen to be at the same time as the end of the free money from Cares act. For me, anytime this is at $4.11 might be a good exit point. This is also the consolidation convergence where it may spike or tank. I was hoping for north of $6 but it might not happen. If this breaks out, I will hold it and redo my chart. This is my own basic thoughts, there are way better charters out there.