Dollar bounce before election (Update on 17yr Cyclecl Study)Lets ZOOM in April 1986 -5.27% then bounce, April 2003 -5.38% then bounce, April 2020 -6.76% then what? NOT ADVICE DYOR
TNX
To the rescue 17yr Cycle reveals post COVID19 futureTo the rescue 17yr Cycle reveals: bull market in SPX Gold WTI & bounce in TNX & bear market in USDCHF & DXY. Importantly on 3 occasions no change in DXY after 39 WKS. NOT ADVICE. DYOR
TNX and Precious Metals 8/18/2020This is the TNX at the daily view.
There are way too many retail traders who are trading precious metals blindly. The first rule in trading? Protect your profits (capital preservation). Generally, you cannot protect your capital if you're trading something that you don't understand.
The ten-year note is important since it has an inverse relationship with precious metals and a correlating relationship with the financials sector (XLF). The TNX is one of the centerpieces of the financial sector. If the TNX does well, then financials do well. However, when the TNX tanks, then precious metals will rally about 2-4 weeks later... usually. Sometimes the reaction is quicker if out of panic.
On June 23rd, TNX tanked and moved below the middle of the channel (white line). On July 13th, both gold and silver began their super rally.
On August 6th, the TNX began its comeback rally and reclaimed its former uptrend support. On August 11th, gold and silver began their corrective selloff.
To predict gold and silver, it's not only how many buyers/sellers there are. Traders need to consider both the dollar strength and the yields - especially the TNX.
Now, the dollar strength and the yields are locked in a battle to control gold and silver's prices. According to Bloomberg, the dollar is now overcrowded in shorts. Overcrowded means vulnerable for a fierce reversal. If the TNX holds its support or at least remain flat, that may buy enough time for the DXY to bounce hard. If the DXY bounces hard, then precious metals may pullback further for a much better entry price.
US Dollar Index & RatesThis circular relationship is leaving many analysts puzzled as to what's next for the Dollar. Weight of the evidence points to a lower Dollar for now.
A truly weak US Dollar means the clocks ticking on the current bull market in Bonds and subsequently the upward trend in equities.
Real EstateFollowing the GFC, Real Estate outperformed the S&P 500 for nearly 3 years. This chart depicts the relationship b/w low rates, and an outperforming real estate sector.
So far during COVID-19 crisis, VNQ:SPY has reached a new all-time low, despite extremely low rates..
Spreads Narrowing..KindaAmidst record corp bond issuance in the month of March (and April looking to be even higher) spreads remain elevated..
S&P How spot market recovery & what markets to buy & sellZones created using crossovers of Monthly 20 MA on VIX close & 20 MA of same. Like end of crash in 02 & 09 some bulls and bears think this crash will only be confirmed over when TNX closes month above 1.34. See what happened to OIL, GOLD, and DOLLAR last time (green verticals). White verticals denote VIX peak (no guarantee reached that yet). Caveat small sample size & my arbitrary choice of two key TNX levels which just appeared to make this analysis work to perfection on two previous occassions. NOT ADVICE. DYOR.
𝗕𝗶𝘁𝗰𝗼𝗶𝗻 𝗨𝗽𝗱𝗮𝘁𝗲: $BTC Daily. Flag Above $6K ⚠️Could pop to 200dma, but looks increasingly likely the channel breaks down. Just above the $6K level adds risk of big down move
Key to S&P bottom formation is 10 YR Treasury Note Yield (TNX)Until we see Monthly ROC of Treasuries >0 followed by <0 the S & P (SPX) cannot form a bottom. Caveat small sample size. NOT ADVICE. DYOR.
Construction details on chart.
𝗖𝗼𝗽𝗽𝗲𝗿 𝗨𝗽𝗱𝗮𝘁𝗲: $HG_F Daily. ANOTHER DCB into 13dmaLooks like another DCB into 13dma rejection. Break of 2.44-48 area was BIG. 2016 lows should be tested
𝗕𝗼𝗻𝗱𝘀 𝗨𝗽𝗱𝗮𝘁𝗲: $TLT Daily. Rates Double Dip?Exploded higher than I thought and the pullback to test ~139 was also very quick. #Rates may double dip as #Fed suppresses
$ZB_F $ZN_F $TNX $SPY $SPX $ES_F $VIX $QQQ $NDX $NQ_F $GLD $DXY #Bonds
Rates Bottoming Out?Copper vs. Gold Ratio is displaying a very well defined momentum divergence - have we seen rates reach a low?
Where Will Markets Go From Here?Added a blog post this morning at assetdesigncenter.blogspot.com
Appreciate your comments.
Yields and Bonds - Where are real interest rates going?3/3/20. Weekly Charts of TLT (20 yr bond ETF) vs TNX (10 Yr Treasury yield) compared.
In order to crush high inflation, They raised interest % in late 70's - early 80's. As a result, the rate peaked in 1981 and 10 Yr Yield was near 16% and mortgage rate was 17-18%. People were getting 9% interest on simple CD from the banks. Today, 3/3/20, The 10 Yr yield briefly nose dived below 1% but then came right back up. Bond funds like TLT has been great investment so far but to think the ride is going to last much longer is not practical. Some people talk of negative yields and I always try to remind myself that I must assess Risk vs Reward, not what people say, and I also know that I live in a reality, not a fairy land. Creditors are going to want more return on their money soon or later.
10 year T-Note yield weekly bullish divergence. Daily RSI LOW.This looks like a bottom for the time being.
The divergence on the RSI is not to be ignored.
𝗘-𝗠𝗶𝗻𝗶 𝗨𝗽𝗱𝗮𝘁𝗲: $ES_F Daily. Fed Failure ⚠️Failure as #Powell surprise cut puts more pressure on yields. Crazy day, but another flush looks likely
IEF - Bond & Yield about to pivot?Weekly IEF chart. 2/28/20
Risk vs Reward warning
Bonds have performed very well and Treasury yields have tanked
Could it go higher? Sure.
US 10-year yield could retest former low of 1.34 pctThere is a map of a consolidation for US 10-year yield.
The range is quite volatile between 1.50 and 2.00.
The wave B should complete with a drop to the 1.50 and then wave C could unfold up to 2.00.
After that the drop should resume to retest 1.34.
𝗕𝗼𝗻𝗱𝘀 𝗨𝗽𝗱𝗮𝘁𝗲: $TLT Daily. Move Hitting Target AreaOver 150 today! Coming into a major decade long TL near 152-153. Nice trade if took the setup
AbsurdityMore sideways is highly highly unlikely. Boom or bust! US market cap to GDP 157% (LOL). Perhaps the most ridiculous thing of the last 11 years is when the moving monkeys on CNBC repeat "this time is different".
For that to be true, the market should have no problem going to 180% of GDP. Think about that. Good luck.
Yields rise, it tightens credit conditions. Equity falls.
Yields fall, its a deflationary feedback loop. Equity falls.
Good luck everyone. Be careful.
