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TLT

Long Duration Bonds (TLT)We haven't had to manage cycle risk, on a sustained basis to the downside, since 2008-2009 and 2000-2002. The biggest problem in financial markets right now is there's no Event. This is just Cycle-Risk and we haven't had to manage cycle risk - on a sustained basis to the downside - since '08-'09, and 2000-2000 before then. The Fed is in QT. Financial conditions are still in accommodative territory, according to the Financial Conditions Index, and we have a long way to go. We will not see any dovish actions from the Fed until the economy deteriorates significantly. I'm convinced we're past the peak in terms of inflationary pressures. Looking at our portfolio, the #1 thing we aren't allocated to is duration. I think the long bond could rally 20-35% from here. I think when it moves, it's not going to let you back in the trade. The world is short-duration right now. Tons of cash on the sidelines. The dollar rising has been supporting U.S. equities. When it deflates, there will be a significant change in style factors. Expect a significant reversal in sector and style factors ahead. Simple rule on when to enter a long bond trade: It's compelling, given historical backtest, to go long the long bond when the year-over-year inflation rate peaks. (18-20% annualized) YoY Inflation data: fred.stlouisfed.org NFCI: fred.stlouisfed.org
NASDAQ:TLTLong
by RHTrading
How I Learned to Stop Worrying and Long the Treasury MarketHave you ever been told that stocks only go up? How about not trying to time the market? If you have, you might just be the exit liquidity the credit market needs. In this chart I will help you avoid losing money in the next two quarters by rolling your portfolio into cash and the treasury market. If you have followed the last few charts, you are already sitting in a cash portfolio as we head into a disinflationary period. That's right, inflation has already peaked even though the credit market is pricing in a potential 100 basis point hike this month. What isn't being priced in is the recession coming around q4 or q1. This is an opportunity for you to roll some cash into the treasury market and make some gains on top of not losing money. You may have heard something like "the treasury market is broken bro". This is from people that don't understand the dynamics of the treasury market. The treasury instruments do not perform well when interests rates are going up, but the up and coming recession will sharply slice inflation in a very short period of time. This will result in a fed pause. This isn't priced in yet because interest expectations are too high to account for a rapid recessionary disinflation. Look at how quickly TLT started to make gains after the fed stimulated the economy during the pandemic. This is the ideal time to start a DCA into the treasury market because the credit market is still struggling to come to terms with the fact that a soft landing isn't going to happen. When they do, the treasuries will pump in anticipation of a fed pause or even a pivot. I don't think a pivot will happen without a pause, but the credit market, being the pack of wild dogs they are, will conflate the two. This is a trade that might have a very small bit of downside to it at first because of a potential basis point increase, so if you can't handle that, a DCA over the next month or two is best.
NASDAQ:TLTLong
by coinhoIio
This is where the recession level is. #Gold #GC #TLT #TNGold once again in history will probably tell us if we are going in full recession mode (ala 2008) or not. 1670-1680 been defended fiercely four times in the last 30 months, markets are going to see how much fear is there one more time .. heading into FED September 20th FOMC meeting. A strong daily close under that level would be the open door to something bigger than what we have experienced in the last nine month. Gold here as the sum of overall 10Y Yields, TLT, TN futures market directions. EUR and Yen of course all dependent on them.
COMEX:GC1!
by Artes_
2
TLT nearing bottom Still in line with my previous analysis. I approach this from an Elliot Wave perspective with Fibonacci relationship. To me this looks like a macro ABC with final leg down reaching extremes. We are likely in a bullish divergence territory on a Weekly Chart. The chart above is Daily for easier wave count to pin point where C might end. The support box is in gray; this is an area where a price could react with a strong bounce or reversal. As you can see we are already there so support could be found very soon. Another fib support coming up in the 90-96 range where I feel there is a strong possibility for a bottom (not guaranteed, hunting bottoms is a dangerous game). If we take a trend line in wave C from ii to iv and measure the trajectory of where v should end, it also points at a region of 90-96. If the market presents this opportunity it has a number of supports coming together all in that particular area. This bottom could mark the top in US10Y and other treasury bonds since they move inverse to TLT. Also the dollar index is hinting at a top and pushing extremes so I expect a reversal or a top in Sep-Oct timeframe. The month of September / October (2022) might come with fire works! Not a financial advice. Cheers,
NASDAQ:TLT
by Elliot618
2
SPY Weekly review and forecast: August 22, 2022Last week brought the first sell side activity the markets have seen in nearly 6 weeks. The market digested comments within the FED minutes as being dovish, and was on track to extend the rally through most of the week. The tone changed on Thursday and Friday and the market was unable to hold the 4300 level. Most of the selling was precipitated by technology and the financials, while energy finished positive on the week. Volatility has also begun to expand as the VIX finished positive on the week. The weekly expected move in the SPY is also greater than last week's by almost a full point. SKEW closed flat-to-down week over week, but is still in an uptrend. SPY -1.16% (+/- 8.3) QQQ -2.28% (+/- 8.89) IWM -2.85 (+/- 4.97) ____________________ Technology -2.5% (+/- 4.09) Energy +1.26 (+/- 1.26) Financials -1.69% (+/- 0.83) ____________________ VIX: +12.19% (23.07; ~50% IV Percentile) _____________________ The rally we've seen since June has been impressive, so a pull back was going to come eventually. Its important to zoom out and look at the big picture perspective. The market may have re-entered the sideways channel I outlined at the beginning of the month. I'm looking for this week to have a mildly bearish bias, but most probably staying within the expected move in advance of the FED's Jackson Hole meeting (so think between 4150 - 4300 in SPX). I'm going to be keeping a close eye on the Bonds as well as Energy. If the Bonds continue to fall, it will be more fuel on the inflation fire. With regards to energy, stocks like XOM are at key inflection points on their Volume Profiles; selling in energy now would weigh heavily on the indices.
AMEX:SPY
by InnerMotionTrading
TLT Bond ETF Setup for Reversal to LONGNASDAQ:TLT On the 4H Chart, TLT is sitting on minor support with major support below that. It is near to the bottom of open Bollinger Bands and is inclined to move through the basis line closer to the upper band. Significant resistance is 5 and 15% upside. I see a swing long trade with the stop loss below the major support and targets before the major resistances, yielding a very good reward for risk. Call options are another possibility to consider.
NASDAQ:TLTLong
by AwesomeAvani
Update on long duration bondsHello everybody! I wanted to make a quick update on where I think the 10y and 30y bonds will be headed in the next few months, as in the past, I've been talking quite a bit about deflation and a recession being close. We have seen TLT rise significantly, yet I think there is more upside. In the short term, I can see a further pullback, but in my honest opinion, the drop over the last two days was caused mainly by Pelosi visiting Taiwan and bonds getting overbought on lower timeframes. The 30y yields were rejected at the monthly pivot, while the 10y yields bounced at support and were denied at resistance. Yields are still in a short-term bearish trend, and there is no confirmation of a reversal yet, although the trend might have changed. It all depends on the situation between China and the US, as the more the tensions between those countries increase, the higher inflation will be, and therefore the higher rates will be. If China starts aggressively selling US bonds, this could create chaos in the funding markets. If the US starts banning Chinese imports or exports, the US bond market could explode, and yields go to the moon. This would force the Fed to step in and do unlimited QE / yield curve control. Essentially we are stuck in a scenario of mutually assured destruction here, and there is no way either one will come out as a winner in the short term. I believe that we are in a deflationary/disinflationary period, which could be disturbed at any moment if China invades Taiwan. The Russia/Ukraine war pushed inflation higher at a time when inflation was about to start slowing down, and a China/Taiwan war could push inflation higher at a time when inflation was about to slow down. TLT could quickly reach 125-135 in the next few months. However, I don't believe bond yields are going negative soon. It will be challenging for the market to have negative nominal yields when inflation is so high and at a time when the Fed might be forced to intervene and do YCC.
NASDAQ:TLT
by BitcoinMacro
"Risk On" RegimesThis is how I get a general feel for the market AMEX:SPY NASDAQ:QQQ CME_MINI:ES1! CME_MINI:NQ1! . First, simply looking at the relation between NASDAQ:QQQ and AMEX:XLU This is to get a gauge by asking.. is the market buying tech/growth, or is the market buying utilities (which is more of a bear market exposure "safer" sector)? I don't get complicated with that examination. I use a directionally colored 50 day simple moving average to determine that relationship. It is currently pointing up (long tech). Now for the stuff going on at the bottom (thank you to @jroche1973 for the one on the top)... Each of these are relational "indicators" similar to the idea of keeping tabs on the relationship between tech/utilities. The 3 are: - Equity vol TVC:VIX vs. Bond vol. TVC:MOVE - Short term "less risky" fixed income NASDAQ:SHY vs high yield "more risky" bonds AMEX:HYG - VIX contango (measuring the current VIX relative to a 3 month Vol Index CBOE:VIX3M all 3 of these gauges are currently in "risk on" regime for how I use them. I write this 30 minutes before a FOMC meeting, with expectations of a 75 basis point hike for the US, with a 100 point hike being on the table as well to combat inflation. This will clearly move the market one direction or the other depending on what Powell says.. My current guess on the FED situation is they will start to slow hikes Q3 --> stop hikes Q4 --> start easing/expansion by Q1 2023. It's all cycles. This is all pretty dependent on inflation as well, but my $ is on that inflation just peaked out at 9.1 CPI and the FED will/has overtightened to the point of too much growth deceleration. All in the name of killing inflation (which does have to be killed) All this being said.. bonds, rolling VIX stucture, current tech/utilities, and equity vol/bond vol are all pointing to a more risk on mode currently. Not to mention bad news has been getting bid up... depends on time horizon for each individual, but this isn't the worst spot to allocate some longer term tech holdings and some long duration bond exposure IMO. This can change quickly literally within the hour depending on what Powell says. Nonetheless, I prefer to look at this stuff as where that is where more of the "smart money" gives hints as to what's going on underneath what we see in market pricing. Fixed income typically has bigger brains than equity bros (sorry equity bros). At the end of the day I'm accumulating and long CME:BTC1! , the hardest money every created. I will also be long the long duration end of bonds NASDAQ:TLT AMEX:TMF . Have a good one and hope this sparks some fun ideas for you all.
NASDAQ:QQQLong
by WalterDeezNutz
Potential TLT Inflection and Notes onProcessWhat started as a short post describing a potential, but dangerous, weekly inflection in the TLT chart has evolved into a much longer discussion around process and how I organize and view the basic information. As I wrote, I realized how difficult it is to describe process, particularly the more nuanced aspects. 40 years spent staring at literally millions of charts and focusing on rates and credit have internalized much of what I do. But I hope this at least provides you with a place to begin. I have ordered the steps, but the order isn't particularly important. And finally, there isn't a right or wrong process. What process is and what it accomplishes is different for everyone. What is important is that you have a process, particularly surrounding your risk and trade management, and that you implement it consistently. Note also that there are different processes for different trend states. A market with bearish momentum that appears to have plenty of life remaining in its trend requires a different approach than one making a potential inflection. Finally, most markets only provide two to three good tradable inflections a year. TLT is showing many of the characteristics I monitor for in these inflections. I like simple things. I prefer to find confluences of support and resistance and then to monitor for price volume behaviors around those confluences. This is how I go about it. Background: Momentum and price trends in daily, weekly and monthly perspectives are clearly lower and the price volume relationships in the trend of higher degree (monthly) strongly suggest that rallies will prove counter trend. The three momentum trends pertinent to the analysis are covered in the “triple screen” section below. Identify and organize the major chart elements: Buying Climax and Failed Test: March 2020 produced a clear buying climax. The spike high, subsequent close near the low of the price spread and below the close of the prior weekly bar with volume at nearly 4X the average was unambiguous. Note that over the two week period the market roundtripped nearly 41 points or 23%. At the very least, this kind of volatility can be expected to exhaust the market. The market then spent 21 weeks moving laterally. Two attempts to rally with no sign of expanding volume strongly suggested a lack of demand. In my view, the break below TR1 strongly suggested that the test of the buying climax had been completed. Identify Horizontal Support and Resistance: The market is framed by major support at 111.90 (Nov 2018 low) and major resistance 179.70 (March 2020 Covid high). What were significant supports at 133.19 and 155.12 are now strong resistance. Price did violate the major support @ 111.90 but not to a meaningful degree and it certainly didn't post a weekly or monthly close below. PENDING A SUCCESSFUL TEST, I am tenatively viewing this as a weekly hold. It also demonstrates the danger of selling breakouts, particularly when the market has been trending for an extended period or the preceding move has been violent. Again, to be trusted, the recent low @ 108.12 needs to be tested. In lieu of a test, unequivocally bullish behaviors would need to develop. To this point, that has not happened. Identify Dynamic Elements: There are three dynamic elements in play. Price is pressing against the bottom of the large declining trend channel drawn across the 175.25 -155.12 highs with a parallel drawn from the 133.19 low. The supply or overbought line of the channel currently intersects price in the 148.00 area, but is constantly declining. You can think of the bottom of the channel as the oversold/demand line for price. It intersects in the 116.61 zone. There is also a broken uptrend (LT1) that had defined the trend for the last decade. The clear break of the TL in April moved the long term trend from up to neutral. The broken uptrend should now act as resistance. It currently intersects price in the 121 1/2 area. Of lesser interest is the steep downtrend drawn across the 155.12 and 142.33 highs. A break above would add confirmation of a short term trend change. Characterize Volume: Are the price/volume relationships bullish or bearish? Volume has been steadily rising/heavy on the B-C leg. This is consistent with a supply driven market. This increase in volume is particularly evident on the monthly chart. See the detailed volume breakdown below for a more in detailed look at the daily perspective chart. Categorize the Momentum State: Weekly perspective oscillators like MACD (shown) and moving average and volatility envelopes (not shown) are deeply oversold. I use deeply oversold/overbought conditions to help identify charts and time frames that should be monitored for bullish or bearish price behaviors and chart setups. I also use oscillators as a trend filter. But I rarely use them to generate actual buy or sell signals. Last weeks close nudged the weekly MACD oscillator onto an oversold buy signal. But, to be trusted the crossover MUST be coupled with bullish price behaviors. Evaluate the most important Fibonacci objectives and retracements: Fibonacci objectives generated from the 179 .70 - 133.19 - 155.12 sequence: Equality at 108.34, 1.38 @ 90.51 and 1.618 @ 79.49. The market found support at equality. Fibonacci Resistance generated from the X - C & B - C declines: I prefer to look for clusters. The most likely resistance cluster falls in the 132-135 zone. When it comes to Fib levels, I like to keep it simple. I hate to see charts with dozens of Fibs scattered about. In my opinion, it devalues the more important levels. Examine the price/volume relationships in the trend of lower degree: Volume Detail: The footprint of a subtle shift from supply driven to demand is evident. Two bars in particular, May 5 and June 13 (circled) drew my attention. It would have been easy to dismiss these two as supply, but on my charts I labeled them as demand. Both bars are large gap down days, but note that they closed well off the lows, in the upper portion of the periods range and on much higher than normal volume. Note also that volume pulled back on the decline from the May 27th high (rectangle). This reduction in volume represented a significant lessening in supply. In other words, selling was far less urgent than the selling that had characterized the earlier portions of the decline. Over the last few sessions signs of supply have developed but volume on the pullback has been modest compared to price spread. Examine the perspectives of higher and lower degree: Triple Screen: The chart of higher degree will help determine how aggressive trade positioning and risk management should be. The chart of lower degree is used for trade placement, tactical entries and stops. Monthly: Trend of higher degree is clearly bearish and not oversold. Rallies in the weekly perspective will likely be corrective/countertrend as opposed to the start of a new long term trend. A large head and shoulder top is visible in this perspective that projects as low as 88.00. Volume (not shown) has been extremely heavy, confirming the trend, but perhaps being a bit on the exhaustive side. Against this backdrop rallies will have a tendency to fail early and surprises will tend to be bearish in nature. This suggests that positioning in shorter perspectives should be conservative and stops should be raised aggressively behind trades. Trade management should be generally conservative. Daily and other: If the weekly chart supports positioning, move to daily and hourly perspectives to build trading and risk management plans. Other Considerations: Are there any seasonal tendencies in play? Bond prices have very strong seasonal tendencies, weak into the May - June time frame, stronger into the middle of September, and weak into the end of the year. TLT has entered a time of the year when bonds often transition from weakness to strength. Are the related markets supportive? Industrially sensitive markets like copper and crude appear to have made significant inflections as the market’s attention shifts from inflation to recession. The same can be said for TIPS breakeven rates. On balance, the related markets are supportive. Do the charts of other U.S. maturities and yield curves support the idea? 2s and 5s are testing strong yield resistance levels and momentum is threating to reverse, particularly in fives. Remember that the two year is very sensitive to the Fed, fives are a combination of market forces and Fed and Long rates (TLT is longer duration) are generally more responsive to the economy and inflation. Is positioning or sentiment offsides? In rates, Commitment of Traders, options open interest, open interest data from futures, TIC data and fund flows are all fair game. When trading was my job, I monitored all of the above. Now, in retirement, not so much. Breadth, % of stocks above or below moving averages and VIX fall into this category. Evaluate economic relationships that impact bonds: For example, are the slopes of the ISM and surprise indices consistent with the trade? With the ISM slope clearly negative, bonds are more likely to be bid. What are credit spreads doing? The widening in high yield and investment grade credit spreads is also supportive. Do I have the sense that there are systemic issues building that might impact the trade? Systemic issues are typically bullish for bonds. While I see less potential for dislocation in this cycle, rate increases of this magnitude usually wreck someone. Finally, I take a sanity check, am I falling prey to behavioral bias? Am I being dispassionate? Reach a Conclusion and Design a Trade: While monthly trends are unequivocally bearish, the market is testing a major support confluence generated by the combination of horizontal support, oversold channel and fibonocci levels. Weekly momentum oscillators are oversold and there are tentative signs of demand developing in the price volume relationships. Recent inflections lower in industrial commodities, TIPS breakevens, and energy are supportive and suggest a growing recession narrative. Bonds are entering a seasonally strong period of the year. While trends are clearly negative, the balance of the evidence suggests that conditions are conducive for a weekly perspective inflection/correction to develop. I will begin monitoring market behaviors in the daily and hourly perspective charts for opportunities to enter. It is likely that a rally into the third quarter will set up a very high percentage selling opportunity. Design the trade: For liability reasons the CMT Association precludes me from making direct recommendations. So, this is where I leave you hanging. My goal was to show you how I do the analytic steps leading up to designing a trade. But a few general thoughts: Trade entry should be timed using the charts of lower perspective (daily and hourly). Remember, the recent low has yet to be tested, and the market is far away from a logical stop loss placement. Since a long trade will be counter trend, strict attention to risk control and entry tactics will be required. Surprises are inevitably in the direction of the trend… plan accordingly. The Fibonocci retracements and overhead resistance zones outlined above can be used to ascertain if a trade has a reasonable reward for the risk taken. Look for confluences of horizontal, dynamic and Fibonoci resistances to build objectives. Which brings me to my final points in regard to process. I believe that simplicity leads to robustness. I consistently follow the same basic building blocks/process for all my trades, no matter the context or the market. Most importantly, most of the considerations described above are just details. Support, resistance, trend and the price volume relationships get you almost all the way there. I’m not going to pass a trade with a good risk reward because the seasonal is wrong or the trend higher degree isn’t supportive. Analysis paralysis is real. Decide what the most important elements are in your process of focus most of your attention there. And finally, most of the topics and techniques covered above are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
NASDAQ:TLT
by CMT_Association
38
How long could deflation last? What about bonds?As most commodities are currently collapsing, it is very hard to keep believe that inflation is going to go higher from here. June could be the first month with a negative MoM CPI print, but it probably won't be the last. As deflation is taking inflation's seat, bonds have been looking attractive for some time. Essentially we got a blow of top in yields (capitulation bottom in bonds), and now bonds are rallying. It's totally normal as bonds took out the lows, and are now showing major strength at a time where the dollar is strong, while commodities, stocks and real estate looking weak. The truth is that there is no escape from a major global recession. Commodities could fall a lot more until Central banks reverse course. There is too much debt and the only way to get out is by printing, while all the rate hikes will only eventually result in a crash. It's just that rate hikes have a delayed effect and most investors haven't realized what is coming yet. Is the inflation story over? I don't think so. We are just in a very a nasty recession, that could lead to a deflationary collapse. Essentially a liquidity crunch that would cause investors to capitulate, and then force the Fed to step in to save the system. There is no way the Fed will hike rates more than 0.5-1% from here, and there is no way the Fed won't be forced to cut rates and resume QE by June 2023. The bond market reversing like this is an indication that the Fed is about to make a mistake by raising rates once or twice in the next few months, as bond yields are already coming down. It's interesting that bond yields rose more than in 2018 before they reversed and fell below the Fed Funds Rate (FFR), yet FFR is currently 0.75% lower than when the Fed paused in 2018. Could easily see FFR getting down to 0 in the next 12-24 months as the financial system faces collapse yet again, but I don't see bond yields going as low as they did during Covid. What I see is long duration bonds going up to the key breakdown zone, around 130-135 on TLT or bond yields going up to 2.4-2.6% before moving higher again. Essentially I do see a major deflationary episode ahead, I do believe bonds can go up, I don't believe the Fed will ahead of the problem and that there isn't much they can do. However at the same time I don't believe that the inflation story is over, as I do see higher inflation coming once we are done with this episode. Why? Because a lot of production of stuff will go offline, while governments print a ton of money to save the system. Less goods, more money... No way inflation won't happen again. The debt bubble is popping and long term this is inflationary. So far we've seen bonds divergence from their long term trends, first with a blow off top, and then with a rapid decline that swept the lows. Could we get back into the main trend? It's possible, but I don't think so. All I see is a similar retest to what we go in 2021, where bonds broke down and then retested the breakdown level before going lower. TLT will fill the gap and then decide where it wants to go. Definitely wouldn't be surprised if bonds chopped in a certain area for a while, but ultimately I think we are going lower. Of course we could go lower even during a deflationary period, as everyone is liquidating whatever they can. If people need dollars, they will sell anything for them, including dollars. At the moment bonds are still very attractive, yet this doesn't mean that if people need cash they will hesitate to sell them.
NASDAQ:TLT
by BitcoinMacro
4