T-bonds
Rising Korean 10 Year Yields Getting StartedThe Korean long end broke the downtrend since 2001. Rising inflationary pressure and inflation outlook are forcing long-end liquidation that seems just getting started. a 50% retracement to 3.65% is what seems achievable and put pressure on the rest of the Asia Bond markets
Double Bottom in German Bunds, Expected Rally to 171.2Trend Analysis
The main view of this trade idea is on the 15-Min Chart. German Bunds (FGBL1!) formed a double bottom or W chart pattern setup after testing 169.60 support and break above 170.3 resistance. Expectations are for the uptrend to continue, with the completion of the setup being around the 171.20 price level. Failure of the setup will be observed if FGBL1! were to decline below the long term moving average, taking the price to 169.80.
Technical Indicators
During the course of the double bottom setup, the respective short (50-MA), medium (100-MA) and long (200-MA) fractal moving averages had positive crossovers. Currently the price is trading above the respective MAs. Other technical indicators are also displaying bullish signs. The RSI is trading above 50 while the KST recently had a positive crossover.
Recommendation
The recommendation will be to go long at market, with a stop loss at 169.80 and a target of 171.2. This produces a risk/reward ratio of 1.37.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. Currently I have a position in FGBL1!.
Rotation Back into Junk Bonds & Large Caps Q4The JNK/TLT ratio chart visualizes investors' position in greed and safe bonds. An increase means more greed in the market, corresponding with an increase in equities. Based on where we are, I am expecting one last run in the stock market, reaching the top of our resistance trend-line. I have added a fractal to support this thesis.
Barn Bridge ($BOND) is getting ready for move past $100 soonWhen in doubt, zoom out. On the weekly (BONDUSD Uniswap), tightened bands with MACD throwing a buy signal. Has coiled up for months for a parabolic move on breakout.
First target is $130, second target is $186.
In Q1-Q2 of 2022 I can see this going past $500 mark, but for the short term, a $100-$200 move looks imminent.
I added as soon as MACD turned bullish (at around $20), My first profit taking region will be between $130-$160.
10 Year Note Yield - 2%+ AheadPCE Data Friday rose to a 30 Year High for August 2021.
Record levels at a year over year scale - with the FED
remarking "Inflation remains frustratingly high".
The Prior peak in 10 Year Note Yields provided the bottom
for the ES (SPY, SPX, S&P500) @ 1.765.
Yields have formed a Bull Flag in which Price should begin
to Chop and complete for the Breakout of the pattern.
Price objectives above are the prior highs @ 1.765 followed
by an extension to 2.12 - 2.25%.
This level should provide the lows for the Indices, they may
well reach their Objective lows on the Break of 2% with the
final push lower between 200 & 400SMAs.
Patience will provide entry for the Final Long - 5/5 on the
larger Daily TF.
Bonds are simply pricing in - "Inflation" as we indicated would
arrive in September/October.
US Debt is seeing a broadening of concerns among Market Participants
while Inflation begins to wreak havoc on Consumers.
Supply shortages will continue for the foreseeable future, ultimately
the shortages will create a large waterfall decline in 2022 of 50-70%
as a complete loss of confidence in Arrangements concludes.
Wall Street will seek entry for the next SELL as the 10Yr Note Yield
pullback and ranges within the Bull Flag for Yields.
* The Equity Markets remain a "Funding Mechanism" until they are not.
5/5 will be a large move for 2022 off the approaching Lows.
Will the markets meltdown and hammer the bulls as yields rallyThe action has been very heavy this week and major indexes have been pressured lower. There is a lot for bulls to think about and many will be getting nervous. Will the FED come to the rescue again??....and will the Dip Buyers provide support again. In the video I take a look at my key markets and how I am approaching the current market action. I look at US 10-year bonds, the USD, SP500, DOW, Nasdaq and the ASX200.
US10Y hit the 0.618 Fib. Pull-back to 1W MA50?The US10Y has been trading within a Channel Up until it marginally broke its Higher Highs trend-line yesterday. This happens to be exactly on the 0.618 Fibonacci retracement level and today we we seeing a rejection.
Technically the 1W MA50 (red trend-line) has been supporting for months, with the most recent bounce provided on the September 15th low. We are expecting a pull-back towards the 1W MA50 again.
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US Dollar and the macro landscapeThe USD is currently looking pretty strong, with 96 looking very likely the first key target and resistance zone. It looks like it has formed a major based and has potentially bottomed for real... The US compared to other countries can raise rates a lot more and therefore the dollar could strengthen more, but the key is that raising rates will create all sorts of issues. There is too much US denominated debt and as rates go higher people struggle to pay debts and therefore sell real assets to buy USD. As inflation is going higher, people are already struggling to pay certain things and this is just the cherry on top. I seriously don't understand how raising rates will stop energy prices going higher, especially when the way the system is currently set and in its current state raising rates even to 3% would blow up the entire US junk bond market. There is too much leverage and malinvestment at this stage that can only be washed out violently.
However I am not as bearish for now, especially on US stocks. I believe we will get a dip, and a strong dip but it is a great opportunity. I truly believe stocks have much higher to go and this is just an ordinary correction. We haven't had a 10% correction in the S&P 500 for about a year and in the meantime stock prices have risen tremendously. Yes there is more upside, but corrections are part of the game regardless of whether there is a narrative behind them or not. That could be high inflation, Fed raising rates, Evergrande or whatever... but the truth is that it was time.
Based on my analysis stocks could fall another 5-10% before they bottom, but this doesn't mean it is going to happen in one candle. Expect chop for some time and a potential bottom when we get really high volatility with the VIX around 40. In the short term US rates could go up (bonds going down) and that move was building up for quite some time, but I don't think it will be a moonshot for rates and it won't be a long lasting move. At some point growth will slow down and many of the structural issues will be solved, so inflation will come down and we will be stuck in the same disinflationary environment... Lots of things will start breaking, lots of people will be trapped on the inflationary trade and rates will go negative next time around. So what do I see? Rates up to 1.5-2% and then back down again.
What I find most interesting here is how the Russell 2000 looks like distribution, but as rates go up it could be the biggest beneficiary as people exit large caps to enter into small caps. Maybe that's a key rotation to pay attention to as it has shown quite a lot of strength recently. Not only that, but the lows on RUT could be broken violently and then we could see an even more violent come back with new highs shortly after (essentially that range being re-accumulation). Personally I really don't like the way the VIX has bottomed and I feel a big move is coming and that we will have a very volatile environment for quite some time. Things aren't going well globally and nothing has been done to fix all the issues going on. What worries me the most is how relentless Oil and Natural gas look like, which could do a lot of damage on huge parts of the economy as inequality keeps growing. We are stuck in a trap and we can't escape... a vicious loop that only makes things worse.
So who knows... maybe my expectation for a small correction is small and a much larger one will come. It is clear that the main trend has broken and I have spoken about it quite a bit over the last few weeks. I have no idea how bad things could get, but for now being patient and waiting to buy the dip is what I think is best. Buy dips on Oil and Stocks. Forget metals and bonds for sure.
USD/JPY Signal - USD 7 Year Note Auction - 28 Sep 2021USDJPY has bearish divergence prior to the USD 7 Year note auction, which shows the yields on the US Government backed security. Technically the pair has been in a bull market, however the RSI is showing strong bearish divergence and the ADX has dropped showing the trend has lost steam. We anticipate a retracement into support.
Inverse correlation between Gold/copper VS. YieldWe have a very nice inverse correlation between Gold/Copper (XAUUSD/CPRUSD) VS. TNX ( 10 year yield).
in the red zone we see TNX going down while The Gold/copper chart resist to go up...
Maybe ( and just maybe ) TNX was making a bull flag and according to this inflation we may see more upside from TNX and then Gold/Copper will go down.
My goal range for TNX is about 1.92 while we are approaching to the end of the year and we may see Gold again in 1600$ range.
Going up in TNX will hit the bond market and a lot of money will flow into stock market ( positive for #SPX #SPY), and the result will be drastic uspide move into stock market.
How long will this continue, is the question.
What s your IDEA ? put it in comments.
tlt \\ wave 5 swingmorning,
tlt looks to have been in a prolonged triple 3 correction for this complex wave 4
triple 3's can be described as an area of re-accumulation by smart money, before the next mark up phase begins.
after hitting the downside wave 4 algo target perfectly today, i do think the triple 3 has been completed.
possible it hangs out around this range for a few more days to meet the fib-time ratio for this w4.
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my upside target sits at $157, but there's a good posibility it goes higher than what i am current projecting here.
stop loss below the 0.382
ps. the debt ceiling vote later today might play a big influence on where tlt goes next - so def make sure to keep a tight stop, just in case that vote ends up flopping.
US10YZoom out and it's a multi-year IH&S
BUt...
Locally... crunchtime.
Serious resistance. AND... the RSI is low enough to stab south.... bearflag in a bullflag. BUT enough RSI ther to get north and backtest if things went to sh1tcoin already.
What would see people flock to bonds?? A little stonk tail off.... too much though and a debt-crisis and she pumps; add inflation to themix...
let's see next few days are pivotal.
TNX Heading Higher?Not really sure what to make of this just yet, but the 10Y yield definitely appears to be heading higher. Ironically enough, this is happening amid a #fed that is committed (at least in the near term) to maintaining low interest rates.
My guess is the Fed knows rates will rise on their own, thereby creating a competitive environment among lenders.
We will continue to watch this one; for now it looks like we are heading to test 1.75 - 1.77. Neither long, nor short for now. Let's just observe.
Fed announces Taper and what this means for stocks and crypto. The federal reserve just announced a potential taper of the asset purchase and start reducing the growth of their balance sheet going into 2022. This taper could potentially end in mid 2022 and Jerome Powell announced they would consider raising rates depending on the economic situation then. This clearly reflects that inflation is running wild in the United States and their fingers are on that button to prevent it from running wild. Both the US 10y treasury as well as the SPX are seen rising together which is another sign there is too much money chasing too little goods and services. The price action of the bond market looks to mimic that of October 2017 if the taper really starts in November 2021. Q4 2017 was the year when the federal reserve starts to unwind their balance sheet and unload the assets that they purchased into the markets. The risk on assets like stock and Bitcoin fell heavily right after....
Rates Breakout - Be Cautious on the ramifications24/Sep/2021 08:22 AM AUTHOR: Brandon Gum
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10 yr yield is breaking out.
This is after they were down 5% on Monday of this week on Evergrande default contagion fears.
Fed met this week. They indicated tampering(?)
Sentiment trader suggested that lots of money managers are not positioned for a move higher in rates and to be careful of your positioning and know what you own.
IWM should outperform (as they do with rising rates - though I dont understand the text book theory behind this.
Regional banks should do well in rising rate environment.
Growth names that leverage cheap capital will be hit.
No comments on other sectors. Im not there in my development yet.
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Ominous signs from the Leading Indicators panelLooking across the panel of leading indicators, it is starting to look as if something ominous is almost completed in building up and about to pop...
The JNK High Yield bond ETF is hitting a resistance;
The IWM iShares Russell 2000 ETF is in a bind, unable to break out as MACD is crossing into bearish region;
The TIPS Bond ETF is falling over;
The VIX is about to burst in break out, MACD bullish divergence supporting;
The DJ Trans had already brokedn down closing at a 6 month low, and MACD is already bearish;
The Value Geometric line is following suit soon;
The TLT bond ETF just attempted to break out, and should see another move upwards in the weeks coming; and
The Copper futures prices is not sustaining any bullishness and about to breka down, MACD leading the way.
Overall, the next two weeks will be volatile, and decisively down at some point.
Heads up!
10Yr ZN - Wandering Bishop - ROCsEnraged Evergrande Investors weild Laterns and Pitchforks.
The carnage for hostages provides a demonstration to our thesis for Banking and Bonds.
Perhaps a soft default in October when the Government runs its tap dry temporarily.
Further evidence, things are not well at all.
The chart illustrates the First Accident 2020 Covid Event. The second, required YCC to
brings circumstance out of control with 10 yr ROCs spiking at the fastest rate in History.
Perhaps the 3rd time pushes on through into the Bond Kingdom Revolution.
We shall see, we continue to build the Big Lick for Bonds.