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TLT

TLT - 150 Puts now Active - ZN 134s STO / ZB 16490 STOsTLT Gap Fill was the Fill. 150 Put entry completed on GF. November 150s now solidly in profit for this trade, B/E is stop as VX enters and true range appears at 2:45PM EST. This is an aggressive SELL on TLT for us. We believe TLT ends up being Sold Hard. ZN/ZB tend to lead these declines. The Setups in both ZN & ZB are complete. We hold large positions in both: ZN @ 134.00 x 25 ZB @ 164.90 @ 25 Our largest and ONLY Position outside of AMC SELLs. We believe this trade will see 3% at minimum, it will be very quick and very dirty as ROCs expand. Bond Curve >/= 10yr in confirmed SELL.
NASDAQ:TLTShort
by HK_L61
2
Currencies - Dollar Rises with QEIdea for Currencies/Macro: - Contrary to popular belief, since 2008, the dollar RISES with Fed Balance Sheet expansion. - There is currently a large divergence which I speculate to close with the dollar rising. Either the Fed Balance Sheet can be reduced, or the dollar will rise... Obviously the balance sheet will not be reduced for a long time, if ever. Why is this so? Doesn't printing more money devalue currency? 1. - Central Bank creates reserves, not a form of liquidity that directly enters the economy. It's still inflationary of course. - G-SIBs and commercial banks can then either rebalance their holdings to purchase assets, or create credit based on this collateral which enters the economy. - These swaps also lower rates, which creates the perception of invincibility and causes price inflation of risk assets (purely speculative!). - However, when debt is serviced (credit impulse turns negative) this destroys liquidity. 2. - A few $trillion from the Fed is just a drop in the eurodollar market, it does not amount to much, relatively speaking. - Other Central Banks have expanding their balance sheets more than the Fed. Since currencies are relative, this is bullish for the dollar. - Eurodollar futures are declining, signaling a SHORTAGE of dollars and liquidity destruction elsewhere, at a greater rate than QE. QE has been ongoing since 2008. Eurodollar market is the market, simply put. Over 90% of international trade is financed through the eurodollar market. I don't think there is any question that a recession is coming when the monetary tightening inevitably comes. Central Banks Balance sheets vs GDP is higher than it was before/during/after the Great Depression or WW2. Total Assets to GDP: IMO yields respond to credit impulse immediately, and their trend supports liquidity destruction in the Eurodollar market. Eurodollar futures are not a currency market but a reflection of LIBOR interest rates. It is an expression of inflation expectations: What is actually happening? - Interest rate driven QE is not working to create economic growth, and we are experiencing global deflation. - QE is failing to create high quality collateral, but instead collateral is being sucked out of the international markets. - Capital flows and credit impulse are negative (deflationary). - Fed went all out, but international money markets did not respond. Real wealth is being destroyed and there is nothing the Central Banks can do about it. Speculation: - Since Credit Cycle leads currencies/collateral, and it is turning down, debtors are withdrawing collateral from risk assets to service their debt. - High quality collateral is being sucked out from underneath the equity bubble (distribution). - Leading institutions will service debt and sell risk before monetary deflation arrives. There will be a dollar shortage and a squeeze. How does this trickle down and affect US equities? It affects the EURUSD pair, which is synonymous with risk appetite (It is an indicator not the cause). EURUSD: Where EURUSD goes, oil and tech go... and where oil and tech go, the stock market goes. Anyway, a relatively safe way to play this would be simply to long USD for the mid-long term (UUP etc.). You can try to short the bubble like me, but be ready for some pain as the timing is tricky and bubbles rise the most at the end. Keep in mind that this isn't really a trade signal but a trend. However, the day of the rugpull is indeed coming. Looking at the trend for DXY, 114-120 seems like a reasonable target. GLHF - DPT
TVC:DXYLong
by UnknownUnicorn1043646
11
Bonds - US10Y Cannot and Will Not Rise SignificantlyIdea for 10Y Treasury Bond Yields: I speculate that yields cannot and will not rise significantly until the equity bubble pops. I think that it will start a wave reaching 0.7 this month. Why is that? - There is almost $300 trillion in private sector debt globally. - Companies used margin debt for share buybacks to boost EPS, creating the illusion of economic growth. - There is a borrowing cost for private debtors, debt must be serviced. - 10Y is used as a risk-free rate benchmark for credit derivatives, especially for risk spreads. - Furthermore, rising yields means that a rate hike would inevitably follow. - The premium on credit risk is at a record low (BBB). - Even junk bonds and Greece is negatively yielding. - Zombie companies are at an ATH (one that isn’t generating enough income to cover the annual interest payments on its debts. With interest rates so low, these zombies have stayed “alive” by refinancing their debts at increasingly lower rates, or simply tacking on more debt to keep breathing. But with rates rising, zombies may be forced to refinance at higher rates.) - Since debt is increasing, the magnitude that rates can rise before negatively impacting the private sector is decreasing. Any significant rise in rates will quickly cause mass insolvencies in these zombie companies, which also would cause a cascade of liquidations in yield chasers who had sold credit default swaps - accumulating asymmetric risk. It is a massive, massive bubble, and any significant rise in rates would collapse the equity market and the economy. The only way to keep equities stable would be for negative rates, but the dollar is without a doubt - rising. As debt rises, liquidity is sucked out of the collateral pool in a proportional amount. You will just eventually get to a point where debt servicing becomes too expensive anyway from a collateral supply perspective. That's the fundamental condition which will eventually bring about the reflexive regression to the mean. So is it a slow and painful death, or a quick flush? I'd bet on the latter... more money to be made for insiders who short it. In fact, I would wager that the Bill Ackmans of the world are betting big on credit default swaps on zombie companies, similar to CDSs/CDOs on subprime mortgages in 2008. People are buying with both hands bonds which are expected to yield less than what they paid for at the maturity. Any change in conditions would cause this to be capitulation into a bid-less market, don't you think? It's pure insanity and there is only one thing to do here. GLHF - DPT
TVC:US10YShort
by UnknownUnicorn1043646
4
#DJI: DJIA leading the charge?We have an interesting situation, at least for the following 6 weeks...After the jobs report, the market is repricing the timing of tapering and eventual rate hikes it would seem. Financials had underperformed for some time, and $QQQ and $SPY moved higher thanks to growth names regaining strength, while bond yields were falling and a big unwind of losing yield curve steepener bets were unwinding. I had pointed out the strength in growth and bonds before, and rotated away from value and financials/energy when I figured out the reflation move had ran its course. At least financials are prone to do very well for the next few weeks, as the weekly uptrend in $TLT expired, and predicts a 6 week sideways or down move in bonds, which is connected to mean reversion following a furious move caused partially by the unwinding of big yield curve bets. News of the hedge fund that took the hit were recently published, which made me think the move in the yield curve is overdone and bound to mean revert. This will favor US banks for some time again. We also observe this behavior in the $DJI chart here, and the $SPY and $QQQ weekly charts. Both $SPY and $QQQ have weekly trends that expire in the next 2 weeks, which can lead to a sideways or downside move after the last short term upswing takes a breather. I'm still bullish longer term overall, in names like $AAPL, $TSLA and $NVDA to name a few, but they might correct or consolidate in two weeks, while US Banks soar. The trend will likely go back to lower bond yields and outperformance of growth later on, but for now it is the time of the $DJI to shine over $SPY and $QQQ, specially in 2 weeks from now. Cheers, Ivan Labrie.
TVC:DJILong
by IvanLabrie
2
Bond yields keep fallingBonds all across the world, across all different spectrums (from gov bonds to junk bonds) have been rising (their yields falling). This is a signal that there are deflationary pressures and that people are searching for yield in an environment with few opportunities. There are other reasons too, but overall this isn't the best signal. Clearly big corporations and governments are benefiting from the situation, but this is also a fragile situation. Although the current conditions benefit some stocks and risk assets due to the highly negative real rates, this doesn't mean that everything is perfect. Personally I believe equities haven't topped and they have much more room to grow from here, but I also think a big correction isn't far away (10-20%). In my opinion bond bulls are in control (bearish on yield) and yields could fall even lower.
TVC:US10YShort
by BitcoinMacro
5
Closed (IRA): TLT August 20th 143 Covered Calls... for a 142.60 credit/contract. Comments: Hit my order to take this off at or near max today. (The max would be 143.00, so the order I stuck out thereI took it off .40 short of that). An über long-running covered call setup with the last acquisition of shares around $110/share. (See Post Below). Unfortunately, I didn't keep good track of short call premium over the years (yes, years), but I made at least the difference between the last acquisition at $110 and what I got out of it today or 32.60 ($3260/contract) plus the 7.93 in credit per contract I kept track of since the beginning of the year. 32.60 + 7.93 = 40.53 ($4053/contract) (plus, of course, those smidgeonly monthly divvies). I'll look to re-up if it ever starts paying decently again (e.g., >3.0% annualized), but I may be waiting a very, very long time for that happen. It's paying a scant 1.481% annualized now.
NASDAQ:TLT
by NaughtyPines
TLT Breaks Out of Descending Wedge to seek new All-Time Highs?Using the same fractal analysis method I used to forecast the BTC dump & dead-cat bounce, I began watching US Treasuries as TLT was set to break out of a descending wedge. Now that it is has, I'm publishing the idea for others to weigh in on. If the pattern plays out we could see new all time highs; which suggests we could be entering another period of recession much like the financial crisis of '08. I do not currently have a position & this is not financial advice. Just sharing observations as they occur. If you wanted to play the pattern, TMF(long) & TMV(short) are leveraged ETFs you can use.
NASDAQ:TLTLong
by jsgiardino
1
Black Swan - Transitory InflationIdea for Macro: - I present to you a counterargument for the media blaring inflation narrative. - Speculate that the interest rate hikes (Jackson Hole, etc.) are just red herrings. In fact rates may go negative. - The real shocker is that everybody is positioned for inflation when inflation is at its peak and is indeed transitory. The reflation trade was debt driven and is supported by nothing but hot air. “Inflation - A continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services” - Merriam-Webster Actually global credit impulse is rolling off. - There are 3 types of inflation that are relevant: Monetary, Consumer Price, Asset. (Lyn Alden, www.lynalden.com) Monetary Inflation: "In highly indebted economies, additional debt triggers the law of diminishing returns. This fact is confirmed when the marginal revenue product of debt (MRP) falls, where MRP is the amount of GDP created by an additional dollar of debt. In microeconomics, when debt is already at extreme levels, a further increase in debt leads to an increase in the risk premium on which a borrower will default suggesting that the bank or other lender will not be repaid. As the risk premium rises, banks are often unable to price this additional cost through to their private sector borrowers thus the loan to deposit ratio of the banks falls. Combining both the falling MRP with a declining loan to deposit (LD) ratio, results in a reduction in the velocity of money. In terms of the impact on monetary activities, a drop in the LD ratio means that more of bank deposits are being directed to the purchase of Federal, Agency and state and local securities in lieu of private sector loans. The macroeconomic result is that funds are shifted to sectors that are the least productive engines of economic growth and away from the high multiplier ones." - Too Much Debt, Hoisington Investment Management Co. - Yes, you have M2 skyrocketing, but compare it with Debt and adjust for inflation. Wow, It did nothing to debt levels. GDP adjusted for inflation barely recovered: - M2 doesn't exist in a vacuum, but needs to be balanced for deflationary forces. Debt is winning. - Yes, you have consumer price inflation and asset price inflation, but these are largely driven by speculative bubbles. They are not driven by fundamental factors nor underlying conditions. They will regress to the mean by Reflexivity. - Yes, there are supply chain issues due to COVID + political tensions, but how long will it last? Are the political tensions even necessary? What happened to lumber even with supply chain issues? - What is even the reason for continued asset purchases by CBs? IMO, asset purchase tapering is done to engineer a crash in the speculative asset bubbles, so that more extreme monetary policies can be enacted to try to stop the tidal wave of debt. Once the speculative asset bubble collapses, consumer price inflation will be controlled as well. In fact there will be a dollar shortage, as each dollar is leveraged 50x+ vs. debt. - CBs don't care about speculative asset inflation okay? Not a big deal. Bubbles even pop by themselves. Price of Big Mac and used car goes up a little bit, boohoo. - Evidence to support my thesis is falling inflation expectations. Inflation expectations are what drives asset prices up. If inflation is expected to decrease, then the prices of assets are expected to decrease. Why would anyone hold an asset expected to depreciate in price? Signals of falling inflation expectations: Inflationary yields: Inflationary currency pairs: FRED inflation expectation rate: fred.stlouisfed.org Gold - you might see something crazy happen here. This can be the end of a distribution pattern: Inflationary Commodities: - The stock market is one of the last markets to receive liquidity trickling down from the source. Currencies, bonds, commodities lead them and stocks should not be used as an indicator for future inflation expectations over them. - Right now, the world is positioned for inflation and are looking for interest rate hikes as the signal, but that won't be catalyst. - Inflation and liquidity flows have been cut off at the source, and now we are at the cliff of the debt driven sugar rush. There must be great suffering in order to justify more extreme monetary policies. Then and only then will you have sticky inflation in a stagflationary environment. "Inflation is transitory" - Jerome Powell GLHF - DPT P.S. Disclaimer - I am relentlessly selling risk assets, long volatility and bonds.
FRED:WM2NS
by UnknownUnicorn1043646
2