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T-bonds

US10Y About to drop strongly after the 0.75% hike?The US10Y recently broke below the August Higher Lows trendline and remains below the 4H MA50 since October 25. The bearish divergence that RSI's Lower Lows suggested is identical to the one in April, May. The price patterns are very similar and this was a sell signal that dropped to the 1D MA50 and the Support of the previous Higher Low. We have drawn these levels on the current pattern and that Support is at 3.567 while the 1D MA50 at 3.667. With the 1D RSI still on Lower Highs and Lower Lows and the 1W STOCH RSI on a Sell Cross, we expect the US10Y to hit at least the 1D MA50. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ## ## Also DONATIONS through TradingView coins help our cause of increasing the daily ideas put here for free and reach out more traders like you. ##
TVC:US10YShort
by InvestingScope
2
The US midterm elections - assessing the prospect for volatilityAs we look ahead to the US midterms on 9 November, the question traders ask is whether it has the potential to be a risk event and promote increased cross-market volatility – as part of the risks assessment, the election has implications on whether to reduce trading exposures over the event. Anecdotally it feels like traders aren’t giving the elections too much importance and are looking far more intently at this week’s FOMC meeting and US CPI (11 Oct) – it’s hard to disagree with that stance as trading ‘peak rates’ is the dominant trading thematic - where bad news is good for risky assets, and good news (especially labour market data) is bad for risky assets. However, the makeup of Congress does matter for US economics, even more so given the US is increasingly headed towards a recession and could require fiscal support. As we move ever closer to the 2024 Presidential elections, there is little doubt a split Congress will increase the brinkmanship between the two parties. However, whether this leads to significant market volatility is debatable. When will we get a result? An important aspect of the midterms is timings and when exactly we will have a clear understanding of who will control the Senate and the House – the market naturally wants certainty and an immediate outcome – this is unlikely and trading the midterms means reacting to news as it comes in state by state. With so many choosing to vote by mail, we know that in some states it's only when the polls close on election night that the mail votes are counted. It may be too close to call in some states, and we must wait for the full mail vote to be counted – this suggests we may not actually get a firm result for the Senate and House on election night. The playbook We explain the dynamics of the US midterms in our recent piece - “Trading the midterm elections – what’s important for traders: - pepperstone.com - we can assess what seats are contestable and how many seats each party needs to obtain to win each chamber. The betting markets have Republicans winning both the House and Senate As it stands, PredicIt have the House and Senate going to the Republicans (REP) comfortably – betting markets have a 90% probability the REP claims the House and a 73% chance of controlling the Senate. In the eyes of the market, it’s not even a debate that the REPs claim the House, it’s a lock. The battle for the Senate is where we could see some uncertainty, and while the REPs are expected to be victorious it's not a done deal. So, the strong base case in the market’s eyes, is that we have Biden in the White House and REPs controlling both chambers of Congress. This outcome has implications that can affect markets, so let’s consider the following: Fiscal policy • In a world where inflation is very high governments are already constrained on future stimulus, especially if it leads to increased bond issuance. However, as the probability of a recession increases the need for government assistance also rises, so President Biden may propose a stimulus package, but the REPs would likely reject it in either the House or Senate. In theory, from a fiscal perspective, this scenario is a modest USD negative. • In the far less probable scenario where the DEMs maintain control of Congress and the White House - should the economy need it, then they would be able to pass a sizeable fiscal package – in a recessionary backdrop with rising unemployment, supporting deteriorating economics would soon take priority over inflation – this outcome would therefore be USD positive as it could lift US Treasury yields. Borrowing constraints • With REP potentially controlling Congress, we consider the possibility of another debt ceiling and govt shutdown debacle – in recent times the market has become quietly comfortable with both issues and a re-run of the volatility seen in 2011 seems highly unlikely. However, if the REPs tow a fiscal prudence line and push for reduced govt spending then we could easily be facing a brinkmanship event and a game of who blinks first. While most of the volatility will be centred on ultra-short-term US debt instruments (T-bills), a standoff on the debt ceiling would be USD positive, although the clearer trade would be shorting equities – and as we push close to the debt ceiling deadline the equity market would become ever more nervous and de-risk. Geopolitics • It's hard to draw a clear conclusion on this from a market perspective and while we can look at the US’s relationship with China and Russia, there doesn’t seem to be a clear market catalyst here. In theory, a REP-controlled Congress and Biden in the WH is a modest USD negative, while conversely, the debt ceiling debate is bullish for the USD. So with no dominant directional catalyst, traders will continue to trade the ‘peak rates’ theme but will keep a close eye on the midterms for voting trends and in case it does surprise and proves to be a volatility event. However, with a recession a rising probability and the government unlikely able to support through fiscal channels, it puts all the emphasis back on the Fed – that means their reaction function will need to be sharper and they will need to be ready to shift policy more aggressively if the economy is to rapidly go downhill. In some ways this politicises the Fed, with the economy shaping up to be the key agenda for the 2024 Presidential election.
PEPPERSTONE:USDX
by Pepperstone
US 10-Year Treasury Yield Bullish Engulfing in Focus Before FedThe US 10-year Treasury yield left behind a Bullish Engulfing candlestick pattern on the daily chart this Friday. This is as the bond tested a rising range of support from August. A turn higher from here could open the door to revisiting the October high of 4.33. Otherwise, breaking lower exposes the 50-day Simple Moving Average, which could reinstate the upside focus. All eyes next week turn to the Fed, which is expected to deliver a 75-basis point rate hike. The focus will rather be on their language going forward as markets increasingly expect moderation. TVC:US10Y
TVC:US10Y
by QM_Dubrovsky
InvestMate|DAX time for a correction?🇩🇪 DAX time for a correction? 🇩🇪 During last week's trading sessions, we could see an attempt to stem the declines on Germany's main index, which comprises the 40 largest German companies. The correction from the bottom was already 9%. 🇩🇪 The bottom fell on 28 September and from then on we began to slowly form breakout formations on the chart. We have been making higher and higher highs and lows. 🇩🇪 Looking from a fundamental point of view, the dax index is in the best position relative to other indices. 🇩🇪 Low interest rates at 1.25 per cent are unable to suppress demand for investment loans. tradingeconomics.com 🇩🇪 At the same time, during Friday's session we also saw a strong correction in US and German bonds, which could signal a change in sentiment towards equities and in the medium term could generate an upward impulse on this stock. 🇩🇪 Turning to the chart, we are at a strong support line from which the price has repeatedly been pulled upwards. During Friday's session we tried to go lower but the level was defended. 🇩🇪 If the positive sentiment is maintained, we can expect the price to continue to rise towards 13400 points where I find a strong line of resistance. 🇩🇪 In this situation, it would be appropriate to take a defensive order below Friday's lows and target the 13400 points zone where the range of the last upward correction is also located. This gives us a very good risk/reward ratio of 3.19 🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
XETR:DAXLong
by InvestMate
2
DRV - Short Real Estate NowMortgage rates are penciling-in to be around 10% on a first mortgage note by Jan/Feb - so everyone with a couple of brain cells to rub together knows what that will do to real estate prices. Some good things will come out of this - like the Gen Z's in the market will get a chance to become homeowners, but in trading terms, this is a very good opportunity. DRV is an easy ETF symbol to broadly short the real estate market with - I recommend sitting on the thing for several months. Shorting bonds directly works, but will vary by your broker for availability. AMEX:DRV
AMEX:DRVShort
by NordicVetMBA
How low can bonds go?Months ago, when 10 year bond futures were still 175, this weekly head and shoulders pattern jumped out at me. It looked so big and so bad I almost didn't want to believe it could play out. Now, as we approach 135, this massive, fully triggered pattern may be the best indication of where bonds are headed: 125. Sure, they could bounce a few times as they have done on the way down, but ultimately June 2011 lows are the likely stopping point on this decline. BONUS: As you can see, I didn't count the massive March 2020 wick or include it in the measured move. Better to be prepared for the UB to overshoot the 125 target by a little or a lot before staging any meaningful comeback.
CBOT:UB1!Short
by gr8fultrading
Actual end of an era. And it is happening fast.Western interest rates starting going back up in the end. Looks like the whole "new paradigm" is over. Money is not free anymore. To sum up: - Boomers got 110% of the wealth (other generations are in debt), they are aging and getting more conservative, covid got them even more scared and conservative (risk averse); - Generally investor outlook on the economy which was not even positive for the last 20 years (buybacks and money printing were the bulls) is now rather negative; - Average people are starting to notice the money printing. Memes and permabears are doing their jobs. And those that do not notice want to go far right or far socialist even thought they have no clue why they want to. So central bankers cannot continue to print to infinity; - All the indicators clearly show people are not spending or lending their money since early 2020, they are hodling, no arguing is possible (unless the data is somehow incorrect), it is necessary to somehow entice them (with higher rates) to get that money; - And boy does the west need the money Bonus (technical): - Well just look at it go I'm going to go straight to the point and not go into a lenghty explanation about every point. i doubt many beginners are reading about the bund anyway. A shame, might be easy money... The TA/chart reminds me of the typical textbook stairs up elevator down chart. Reminds me of AUDJPY when the "housewives" were mass buying the AUD because of high rates, and then all ran for the exits in just months. In the case of bonds people are not running for the exits but it's the same idea mirrored. People with $$$ are not as eager to lend it anymore, and euro governments need as much magical ponzi beans as they can get to bounce back from the whole covid thing, and maintain fake prosperity and power for a few more years... or months. Well french president Emmanuel Macron said "abundance is over" and warned we should get ready, so at least he is honest. Germany has been teaching its population to warm itself without electricity last year. France relies on nuclear power but hey guess what french nuclear worker are on strike, french favorite national passtime. People have been spending less as you can see in this chart. So it takes a bigger carrot on a stick to get them to lend it. Reminder: velocity of money is the frequency at which it is spent. Lower value on the chart means people are holding tight on their liquidities more. Hey, people thought the USD not going to zero with all the printing and government spending and usstock bubble getting inflated would have no downside. Ye investors were buying us dollars because they were optimistic and just super bullish on this awesome not-a-scam currency and us economy right. I am also short on oil price will go down but for all the bad reasons, I'm feeling like the barrel price will be low low low but price at the pump will be high high high which won't even matter since the gaz station probably won't even have gaz. Boomers got all the money and boomers are aging, and scared to die soon, they are starting to not care about progress. Average humans stay in denial so long, but once panic starts to hit does it go fast. Any herd thing goes fast. I mean ask anyone that studies crowds. Mindless reptilian brains (85% of the population) at a concert watch a dozen people dancing like they are martians, they think they are so weird, then a few zombies start to dance and it's like a nuclear chain reaction all the zombie-sheep dance in seconds, only a dozen people are not dancing and the zombies stare at them and think they are weird stuck-up psychopaths. One could potentially take at least 5R, even 10-15 if it accelerates down (/up). Does it get harder and harder to find people to lend money (especially as high IR makes people/boomers scaaaared we are becoming Argentina)? Or will the increasing rates convince more and more people to lend? No one actually holds cash do they? Apart from boomers people have between $0 and 50k in debt and I am not making that up (most experienced traders know this). A handful of people we call traders have cash and they definitely are going long the interest rate (short the bund contract) - a few hundred retail traders going countertrend is like a few hundred mosquitoes trying to stop a herd of thousands of raging elephants, ye good luck guys just #HODL. They could continue to monetize the debt and rob poor people, but poor people even thought they have no idea what is going on are starting to get pissed, want to destroy everything and go socialist or far right. When I say poor people I really mean middle class, from low middle class to upper middle class. So every one except hobos collecting food stamps and Bezos & friends. Plus with the democratization of trading in part because of crypto and Robinhood, as well as permabears Peter Schiff and Mike Maloney reaching millions of people on social media, people are starting to figure out what is going on. Even the US socialists have mentionned taxing unrealized gains, I am scared, why do they know about this? Guess what happens when old people hold all the money? Guess what happens when those were promised they would live forever with magical futuristic cyber hearts? Guess what happens when hospitals are getting more and more expensive and they might (immediately) need all the money they have to afford lifesaving intervention (or they could just stop overeating but we all know this is not going to happen). I wonder if covid reminded them of their mortality and they are done investing for the long term, or at all. I wonder if some lost trust in the west capacity to pay back, but I do not have the answer to that it is not part of the analysis. I know "10/10 AAAA++++" France got downgraded years ago. They should all get downgraded really but will they? In 2008 junk bonds did not get downgraded... Well anyway... I don't want to predict the future or be a lifetime permabear I just want to make some money. We are traders we do not care if everything implodes do we?
OANDA:DE10YBEURShort
by MrRenev
DJI and Bonds: Get your popcorn ready. In this short video I focus on the UK and US 10 year bond markets in comparison to the DJI. All these markets are linked up in the background - at the speed of light. There are no predictions here - only probabilities and speculation. High volatility is expected at the opening of the markets tonight, 16th Oct 2022. Some are predicting a 'Black Monday' type event next week, which doesn't have to happen on a Monday. I take no sides. I'm only protecting my losses in short positions and happy to let winners run. Stay safe, wash your hands, protect your positions, don't burn your accounts. 😁😂 Disclaimer : This is not advice or encouragement to trade securities or any asset class. Chart positions shown are not suggestions intended to assure you of an advantage. No predictions and no guarantees are supplied or implied. The author trades mostly trend following set ups which have a low win rate of approximately 40%. Heavy losses can be expected if trading live accounts or investing in any asset class. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on speculative opinion expressed here or on my profile and you lose your money, kindly sue yourself.
FOREXCOM:US30
by Captain_Walker
1