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TNX

Will Interest Rates be Spiking?If you follow my work, I have said that stocks will continue to move higher because there is nowhere to go for yield. Central banks have suppressed interest rates where equities are the only place to go. The time to sell stocks will be when interest rates SPIKE. Likely in the double digits. This chart of the ten year US yield, is very important as the 10 year yield essentially is the base for other rates in mortgages, credit and loans etc. You can see that we were at 16% back in the 80's, and we are not about to retest the lows again which was set in 2012,2016 and seems like it will occur this year. Setting up a triple bottom, or a range after a very extended downtrend with multiple swings. Remember, bonds and yield are inverse so when yield drops, bond prices move up. This is still likely to happen. Why? Because in a risk off environment, you run into bonds. Meaning bonds go up, and yields go down. Now think that you are institutional fund or even a pension fund that needs to chase yield. Pension funds were historically into fixed income but have now had to switch to equities to chase yield. Institutions, or other larger funds, that follow asset allocation or rebalancing generally sell stocks when overpriced and move into bonds and vice versa. Well we are in an environment where BOTH stocks and bonds are at highs. Some would say overpriced. What does this mean? It means bonds are not held for yield, but are held for trades. Finding a greater fool who would buy the bond and loss money holding it until the duration of the bond. This is apparent in Europe and Japan where yields are negative. However, bonds still are traded because many think yields will be cut deeper into the negative! In the US and other western nations, many think cuts will go to 0, and perhaps even into the negative. This means bond prices will go up. Again, a trade and not really held for yield. One day it will make no sense to hold bonds for yield...just for trades...which is likely what we are already seeing. Don't believe my analysis? Listen to someone more wealthier and more smarter than me, Ray Dalio. He is warning of a paradigm shift where interest rates must go higher...unless bond markets are killed. So central banks cannot control longer term interest rates, they can actively control short term interest rates. QE was a way for central banks to buy longer term bonds to suppress long term interest rates. Essentially taking away the capitalist free market price mechanism for interest rates. We are in managed debt markets. Europe and Japan can be in negative rates because they killed their bond markets. Because of negative rates it really is the ECB or the BoJ that is at the auctions. This is why many are saying that central banks have run out of tools. They can only do QE forever and can never allow interest rates to ever normalize because it would wreak (rekt) people. This is the confidence crisis that is upcoming. Soon markets will realize that central banks are stuck. That QE, which was a desperate policy to prevent another 1920's-30's like global depression, is now the norm and will continue forever because it did not actually work for the recovery. Central banks need to keep this system propped, meaning rates will be dropping. When I checked the yield curve today, the inversion is coming back. I am expecting a rate cut to happen well before the market expectations of a cut in Fall of 2020. So where do you go in this type of macro environment? Where do you go in a risk off environment? Gold is looking pretty attractive...
TVC:US10Y
by Uncharted-FX
TNX 10-Year Yield + Repo Problems + Bonds Extreme LeverageWhen plumbing works well, you don’t need to think about it. That’s usually the case with a vital but obscure part of the financial system known as the repo market. Bank of International Settlements has been reporting some very interesting documents connecting overleverage by MULTIPLE hedge funds (potentially even my hero Ray at Bridgewater) in the overnight repo market (making a percentage by loaning it out) which is having ripple effects in the TNX, and Bond market - Forcing the Fed to supply liquidity directly from its balance sheet. But the plumbing (Repo=Liquidity) got blown out, and the Fed is plugging the hole with QE. The about-face interest rate policy from the Fed put significant stress on the overleveraged market. The Bank of International Settlements is just doing routine reports, I think they don't want to be caught up in it. Feels crazy, but I think the TNX might fall further. Stocks and Bonds correlations appear to be absent.
TVC:TNX
by RHTrading
S&P Next Week Expected Move ($33.0) & Gravity PointsMy 2nd Long Term Target was hit and surpassed. Sentiment is complacent. Complacency is different from Greed. Still bearish, but more sneaky. I'm a strong believer in sentiment and I believe we're going to need to work off this extreme reading one way or the other. Historically, we move sideways to lower after reaching such optimistic levels. It's not sustainable. We're talking 90-95th percentile levels, which is the only time it's worth mentioning. I don't anticipate a crash or anything, but do think expectations over the next 1-3 weeks should be tempered. Last Week: **Unemployment: High Yield: (Non-confirmation) Stock Pick: (Deep Value) Homebuilders: (Interest Rates) Real Estate: (Interest Rates) G7 Friend: (International) Regional Banks: (Retest?) Dollar: (Strength via lack of bearishness?) Growth vs. Value Ratio: (Reversal?) Healthcare vs. SPY Ratio: (Breakout?) Consumer Discretionary vs. Consumer Staples Ratio: (Failure?) Emerging Markets vs. SPY Ratio: (Failure?) Low Volatility vs. High Beta: (Risk on)
CME_MINI:ES1!Short
by RHTrading
Bond Market Indicating Risk On Environment?If you follow my work, you know how the Bond market is crucial to my analysis. It is the largest market in the world, and we are heading to a period where central banks really have no ammunition anymore and are using rhetoric to maintain confidence in the system. The history of humanity is cycles of hard money and soft money. It seems we are reaching the end of this soft money cycle. Of course Ray Dalio mentioning how there are many similarities to the 1930's-40's. Today we are hearing about the repo market. How money has to be injected to ensure the system is propped up and interest rates do NOT spike up to double digits. Lot of argument whether is is Quantitative Easing (QE) or not. Remember, the Fed cannot mention QE because it could trigger a confidence crisis. QE was supposed to be a one time desperate policy to prevent another 1930's like great DEPRESSION. If it is mentioned we are on QE again people will realize that central bank policies did not work and we are stuck in 0 to negative interest rates forever with QE infinity. QE was a way to inject money into the system by the Central bank buying up bonds. Repo is when the central bank directly gives money to the banks and receives collateral in return...they say this is US treasures but it could very well be toxic assets. The difference between QE and Repo is really new bonds/debt vs old bonds/debts. It still is about injecting money into the system to more importantly, keep interest rates suppressed. Because of this environment, I have said bonds are a great long term trade because central banks will be cutting to 0. Specifically Canadian bonds because I believe the market has not priced in Canadian rate cuts until this past week. Historically, bonds are not meant to be traded. As the European Fixed Income traders say, we basically buy bonds because we believe we can sell it to a greater fool who will buy it. Bonds brought in reliable income, and a decade ago when you retired with say 1,000,000 dollars, you would buy government bonds yielding 5-8% at the time which would provide you with 50,000-80,000 a year...which is enough to live off when retired. Today you would get 15,000-30,000. When Central Banks started QE and began keeping interest rates low, they caused money to flow to the stock market and real estate as money had to chase yield. Again, if you follow my work, today there is nowhere to go for yield EXCEPT the stock markets and why I think they will continue to go up. So let us look at the bond charts. So I am showing the yields. Remember there is an inverse relationship between bonds and yields. When bonds go up the yield drops and vice versa. On the ten year yield, we have a potential bottoming pattern here. Yields bounced at the important support level of 1.40. I am one who believes the Fed will cut one more time this year...something the market has not priced in yet but could very well be pricing in the closer we get to December. This is what would keep yields dropping lower and bonds moving higher as more people price in more rate cuts. This move in yields currently may be a relief move. We have trended (downtrend) for sometime with multiple waves. We have broken into all time new highs in stocks (again not surprising if you follow my work. Have been saying this would happen because of chasing yield). When people buy stocks and exit bonds, we call this a risk on environment. Whereas when one sells stocks and goes into bonds, we call this risk off. Remember, money managers cannot really be in cash all the time. It has to be working somewhere and most of it goes into bonds during times of uncertainty, volatility and risk etc. The Bond chart is also showing a topping pattern (so remember inverse with yield): Just a crazy environment we are in really but continue to watch the Bond market. I expect in the longer term bonds to go higher because central banks will cut rates even more. We then get to a point, which Ray Dalio calls the paradigm shift, where it will not make sense to buy and hold bonds (currently you can still sell it to a bigger fool).
TVC:TNX
by Uncharted-FX
Uncertainties remain! Dovish statement We just received the 25 basis points rate cut. The market had already priced it in. Powell just released the statement. It seems to be a dovish one . He will start his speech at 2:30pm, where the market will try to understand the possibility of a 4th rate cut in December. The CBOE Fed tool has the 4th cut in December at 26%. We should see the yield curve steepen. ----- Economic reports GDP report was positive/neutral. ADP employment change headlines were good, but analyst are not happy reading into the details.
TVC:TNXShort
by dorfmanmaster
10 Year T Note: Triple Bottom. Major long term Buy Opportunity.The 10 year has rebounded off the major 1M Support this month, making a statement with last week's strong 1W candle. This marked a Triple Top formation on the 1M scale (since 2012) and the trend shift becomes obvious. 1D is trading near overbought territory (RSI = 70.811) pushing the 1W towards neutrality (RSI = 42.781, ADX = 58.406, Highs/Lows = 0.0000), detaching it from its previous bearish levels. We are expecting a major cyclical bullish move in the next 2+ years towards at least 32.00. Shorter term investors should look towards the inner Channel Up (dashed lines) for pivotal sell/ buy entries. ** If you like our free content follow our profile (www.tradingview.com) to get more daily ideas. ** Comments and likes are greatly appreciated.
TLong
by InvestingScope
TNX has to complete triple bottom or inverted head and shouldersTNX has been in a channel for a long time, forming a base of a triple bottom or an inverted head and shoulders. Once the right shoulder or third touch is made, we go up from there. If we don't the bond market (inverted) will go pop, and eventually burst. This is a fantastic indicator that most don't factor in. Dollar strength... if it continues to go higher, that's bad - too high, and if it goes lower, that's bad - stock will follow indicating weaker economy ahead. This QE experiment has finally failed. Cannot continue to devalue currencies, and have the dollar be the sacrificial lamb. The rubber band has been stretched so tight, it is about to give out. Cannot continue to store money at a cost, Cash/dollar is better alternative, until it is not. And then... where to put your money, the mattress in the next bank. So I am short until we touch, then HOPEFULLY long, so this economy doesn't crumble. FED rate cut should help that. And if they stick to their data is strong, economy is strong thing, then they will be way behind the curve here, and the TNX will crash below the third 138. And then playing catch up will be impossible. They are in a touch, very delicate, very fragile spot. Hope they chose wisely. I haven't posted in a wile, so to all my followers, this moment in time calls for sharing this info, hope you all fare well.
TVC:TNXShort
by claydoctor