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TLT: Mother of all short squeezeEvery hedge funds and their wife, dog, cats, kids are short bonds. Everyone is trapped in the narrative of the FED's rate hike. The bus of short 10 year treasury is full. Its time for a train derail. In a risk-off environment, do you think the FED will ever hike rates further? Adding another level of uncertainly is the cancellation of the Trump-Kim summit in Singapore. Including the recent crash of Italian bonds, EU drama yet again (potentially 5x bigger than Greece) The only place funds can reposition themselves are the US dollar, and US debt/treasury. Uncle Sam. The VIX is currently near lows once again. ~13 It is time to counter-trade that, and reap the rewards of the short covering along 117 support line. You have only 2% to risk. Just buy August 2018 - June 2019 call/ bull spread and close your chart. No stop loss. If it doesnt get there, you lose your investments. If it does, you get back 5x~20x your investments. All conditions are perfect.
NASDAQ:TLTLong
by LastBattle
8
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
AMEX:SPY
by Call_the_bottom
bond are down trending but possibly oversoldCBOT:ZN1! bonds are getting beat up and oversold. the world money system is based on these bonds as collateral, so unless the world will fall apart in turmoil, we must assume that investors will still be interested in lending to the US and buy bonds when oversold. I am specifically interested in the 10 year instead of the 5 year note or long term 20-30yr bond. The 10 year should be more attractive to all investors who seek yield, and the yield on the 10 is current very close to the 20-30 year bond, rewarding well for the time and also giving investors an exit if forced to hold the notes for the entire 10 year duration. In my opinion, the trade I would take is to buy 10 year notes and build a position, and then look for a rise retracement of 50% of the down move, so somewhere around 124 on the note contract. low 120 to 124 area is 3-4% potential return before leverage factor in a few weeks to month potentially, if trade idea worked. no guarantee of course, but I'd still be long bonds, not some penny stock.
CBOT:ZN1!
by optionfarmers
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
Bank of Canada Rate DecisionLater tonight, we have the Bank of Canada making a decision on the overnight rate. Expectation for rates to be held at 1.25%. However, will the BoC surprise the market? I’ll think that that is unlikely. In January, the BoC increased rates, highlighting that this decision was likely to have been brought forward from April. Furthermore, there isn’t a press conference accompanying this decision, with a press conference by the BoC only scheduled in April. However, the statement could have a more hawkish tone, taking the USDCAD lower, especially if price breaks below 1.2900.
Short
by JinDao_Tai
To Lock a Mortgage Rate or Not in The Short TermThe 10 YR Treasury Note Yield appears to have met strong resistance near the 3.0 mark and is starting to roll over on the weekly charts. Notice the RSI above 70 and starting to hook downward. Every other time the RSI rolled over at or above 70 for the last decade, the trend was down shortly afterwards. The next likely support is at the 2.5 area, which by then the rates should have come down by at least 1/8th percent on average across the different mortgage products. Do your own due diligence. This is not investment advice, but is only my observations and opinions.
TVC:TNXShort
by HoosierHODL
RBA DecisionI’ll still be cautious towards trading on sustained USD strength, especially seeing today’s price retracement. Take note of AUD retail and rate decision tomorrow. The AUDUSD came off the 0.8110 high, bouncing off 0.7900. While I do not expect any rate change, it’ll be important to pay attention to the RBA’s rate statement, and on their expectation and actions to deal with the appreciating AUD. This could give us a good hint on future movements of the AUDUSD.
Short
by JinDao_Tai
1
Analysis: last 20 years of fundamentalsI've been studying the markets since 2006. I always loved to collect data and trying to find patterns, fluxes, correlation, decorrelation, shifts in models... Well, with some of the data I found available at TV, this is a quick analysis for the last 20 years (almost). 1) Notice interest rates, price of gold and commodities are NOT CORRELATED at all, there is no correlation and is based on empirical data. So everytime you hear/read anybody repeating this FALLACY, respond accordingly. Actually, one could easily say that RATE HIKES use to cause rise in commodities as clearly visible in 1-2 and since 5. Also notice that until 3rd mark, monetary base was rising constantly but at a reasonable pace. 2) Rates starting to be lowered in reaction to the increasing delinquency in the housing market. Commodities rise. Monetary base, steady growth but contained. 3) Rates to lowest values in history, markets going down, risk OFF scenario, commodities tanking, later to rise on monetary base skyrocketing (QE1). 4) QE2 halted, commodities started ranging. 5) QE3 printing started, commodities and gold DECREASING. What happened? Where has all that money gone? Rate stood negative (adjusting by inflation) 6) After rumors, the new price fix magically started a new trend for gold, commodities and apparently forced FED to start increasing rates to avoid inflation to rise (egg vs chicken, who's first?). Apparently Shanghai Gold Exchange new benchmark denominated in yuan made it harder to manipulate gold and commodities prices overall. USA is now limited in abusive money printing and some variables start to adjust and normalize. Questions: Which data do you think brings some answers to question No 5 about where might have all that money gone to during the shift? What could happen to stock and bonds markets once rates rise resulting in an inverted yield curve? Where is gold price more likely to head after these variables adjust? Could we be entering a new high commodity prices cycle? How much could it last? What would happen to inflation? What about the world's benchmark currency (USD)?
TVC:GOLD
by cacus
10 Year Treasury rates to break resistance or one more dip firstThe 10 year appears to want to either break above the resistance or take on more small trip down to the e wave on this a,b,c,d,e triangle. If it hits the lower triangle boundary and then bounces, then probability is greater that it will then break the upper resistance. So if you are looking to lock a rate, or float watch both triangle boundaries to see what happens. If it breaks lower boundary, then rates could drop so you can float if the rate drifts down into the lower boundary as long as it does not break the upper boundary first. Not intended as investment advice. This is an opinion only. Make of it what you will after doing your own analysis first.
TVC:TNX
by HoosierHODL
1
Interest Rates Look Bullish: TBF is the ETF to BuyOn December 20th I posted an idea for a long position in AMEX:TBF based on the likelihood of the asset breaking out of its long-term downtrend and short-term wedge pattern. Here is the link to the original idea: Today this breakout is taking place and I am initiating a long position in TBF. Given the technical backdrop and the fundamental/economic drivers, I believe this represents a solid opportunity for alpha generation. Initial Target Price: $25.00 Stop Loss: $21.49
AMEX:TBFLong
by BTCBanker1