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SPY SPX ES / Traders Flip the ScriptHigher lows are required to provide the Flip into Higher Markets off of the Lows at the 390.85 Level. 394 is backtesting Support 399.50 is the initial Resistance. Powell Speaks at 9:10 AM EST after - 8:30 AM EST to provide both Initial and Continuing Jobless Claims. Chicago Fed President Charles Evans speaks @ Noon, followed by Consumer Credit @ 3 PM EST. "We're committed to maintaining our Policy" Note - the Markets prefer stable to lower Rates, of late... this has not been present. Should Powell provide Happy Color and TNX begins to move lower. Powell's soothing IF there is to be such 399.50 squeeze comes into the Trade. The Counter-Trend can morph into a further Squeeze and Meltup. _______________________________________________________________________ Fed Vice Chair Lael Brainard spoke yesterday providing some Flip Syde to the Tape - covering all the bases with a positive Traders uptake. Large Traders took advantage off the recent lows and began bidding SPX for the squeeze while Retail began to follow their thesis of Lower Lows and a retest of the Lows - AAII reached nearly 51%. ________________________________________________________________________ X Sectors in the S&P staged a large relief rally with the exception being XLE for obvious reasons as Crude and Oil Majors were hammered lower. Crude ended the day down 5%+ while the DX was lower on EU Rate Decision front runs. We are one week away from VIX Roll beginning and it appears there is an early retreat for Time to M2/V2 aka October. The VIX Floor remains 20.50 / 28 the pivot for Higher. VVIX in decline creates a gush of the potential onrush of VX Bids - 93.58 is the Pivot. Bills, Notes, and Bonds saw a slight retreat, even TLT saw the 20 Year Yield provide reprieve - coming off the 3.75s for 20 Year Yields (Implied). DX can pull back to 108.50. ________________________________________________________________________ Market Internals during this shortened week, Wednesday was simply more Positive then Tuesday was Negative. NYSE TICKs were sporadic and inconsistent Tuesday and Wednesday firmed the Tick. Buying activity was not purely Sellers on Coverbuys, there was newer organic buying. A positive for the Buyers (Bulls) which may digest ahead of Friday's Expiry or simply explode higher on the cross of 399.50, Bulls do not want to lose 394.00 - and the Trendline will need to provide extreme support. Apple's big event... a sleeper IMHO. New Camera - Wide Angle. Price Points that will reduce their continuing Cult of Buyers. Marginal users are simply moving to Android and away from the Apple Ecosystem. They are discovering a better Value proposition for their needs - Apple's Global Market Share continues to decline markedly. Apple needs to see 160.25 - 156.50 as the Breakup Level. Calls remain in Balance for Friday @ 51.7% ________________________________________________________________________ Let's see how Powell presents this morning, he will drive the week end finish. Good Luck and Trade Safe.
AMEX:SPY
by HK_L61
3
SPY / SPX / ES - Shortened Week AheadAugust did not end well for Buyers. Rate Creep across the curve applied pronounced pressure. RISK OFF is in trade across all Sectors within the X Complex. TNX from a Rate perspective - Rate instability and lower rates? At present, No. Bond VX is kicking up. It is however not damaging Banks as of yet, Financials are hanging on... slightly. Will the VIX Spike to 38 to 41? The ES would need to collapse to and through 3600, SPY clearly to new lows. VVIX is seeing the out-of-control setup - Few Puts in SPY, Few participants in VIX Calls due to IV. Prices sit at the most Pivotal area. Volimes are the main takeaway. Cumulative NYSE TICK took us sideways into the Close. Is the selling slowing down... that will depend on whether we see compression this week within a trading range. Friday was a Trending Day. Can Buyers Create Balance here? It will require a SOH on the SELL SIDE. Market Internals need to HOLD. Look below and fail is open as well. 11 of the past 19 September's ended up with 8 ending Down. The past 20 years have been highly volatile and I find it a generational approach more relevant than the overall historical as HFT/ALGO Trading has become dominant with increased Volatility - It's my approach this September. Alladin will be extremely busy this Month - chalking up further gains for Blackrock. The Quarterly close will provide important answers to a Trend in decline at present. It is somewhat overstretched on OSCs, but Summation Indexes have more work to do. This can provide ever-increasing Volatility as we see the VIX Curve pricing in expanding VX for several months. VIX - % Contango SEP M1 @ 3.90% OCT M2 @ 1.80% NOV M3 @ 0.37% DEC M4 @ 3.30% JAN M5 @ 0.25% FEB M6 @ 0.82% MAR @ Par with FEB _________________________________________________________________________________________ Year to Date - August opened the Dunk Tank once Powell delivered his May FSR Objective affirmation for Asset Prices and Interest Rate Forward Guidance. Winners: Energy + 30.10 % Utilities + 5.64 % Losers: Consumer Non-Cyclical -6.55 % Financial -10.81 % Transportation -15.08 % Basic Materials -15.26 % Technology -31.79 % Healthcare -26.92 % Consumer Discretionary -26.06 % Services -21.44 % Capital Goods -20.45 % Retail -18.52 % A very brutal 2022 into the month of September - where Monthly, Weekly, and Daily timeframes are within poor Structure. August SPY Monthly provided a very nasty inverted Hammer. Sellers stepped up in spades at the Highs and Sold to the opening Print, and through the Opening Print - to close on lows. September's opening print did not hold the lower Body Bar on Friday - a poor close to the week with options settlement into the Cash Session. Buyers were non-responsive at best. Sellers sold through on increasing volume for the 3rd consecutive day. September's big events are ahead - the 13th CPI. Powell will provide color commentary on the 21st. _________________________________________________________________________________________ Last Month's Price action served to expand the range for Major Indices. Monthly timeframes continue to hold Lower Highs, not a good look from the June Lows at present. The 379.92 Level is the .382 and Pivotal for the Month of September, it is presently the initial implied Lower Range for the SPY on the confirmed break and closing below the Trend Line Support. SPY 50% resides at 349.12 - the opening to a larger and lower low - into the Gap Fill @ 338.50. Obviously larger targets below on increased panic and further Selling. Price is currently sitting on top of what was prior support. _________________________________________________________________________________________ I have cautioned for some time, Rates were a distraction too far larger issues within the Global Economy. Repeatedly. There are 3 legs to this stool. Forward EPS, which remains incredibly high based upon earnings projections and their required adjustment too far lower expectations. These have been partially priced in after Powell dropped the Hammer. There is more work to do there. QT remains a recycling operation - in through the out door with the appearance of an aggressive FED - while advancing CBDC via FED NOW/FED DIRECT at an increasing pace for Rollout. This and 41067 won't bode well for Crypto IMHO. Simply adding to the avalanche of impending exits which can be triggered by any panic in trade. _________________________________________________________________________________________ After large declines for all Major Indices... we've never seen a real Flush down panic, not one. This is a once in 100 years Bear Market and it will be difficult to navigate as the Algorithms are growing increasingly predatory. Be careful out there, reduce Size and be on guard for increasing VX in September. Bearish Sentiments @ AAII are rising to 50.6% again. Stop runs on trailers and catching traders offsides should be anticipated. We will see if the breakdown hammers this lower or price can manage to consolidate in a larger range this week - expanding to the downside but providing outsized squeezes based on the Gamma / Delta. _________________________________________________________________________________________ A Break of 388.96 has the potential and higher probability of creating a massive flush down and panic move to the downside. Price is currently sitting on top of DOM Support or what many refer to as a Volume Node, I'm old, Depth of Market (DOM) is my preferred nomenclature. 3 Weeks of selling favors the Sellers - expected moves will produce lower Highs in Trend. Daily DT is another large Lower Low. The Daily TF is the confluence with the Trendline @ 390.85 - BREAKING THIS will get nasty. Buyers will absolutely need to defend early this Week, 399.50 may limit the upside in the Range. 379 to 399.50 is the Larger Range this week. 408.25 breaks a Potential Bear Flag. Sector Support appears to be a Risk OFF in ALL Sectors. HYG will provide leading indications as will XLF - breakdowns here would be very NEGATIVE. Can Buyers consolidate here... we will see. Take care and be cautious - trade Safe, Lower highs in the XLK will provide entry into the Trend.
AMEX:SPY
by HK_L61
5
DXY's delayed reaction to yieldsI had this confusing idea and I will show it to you with this confusing chart. 1. First we define the blue vertical lines. These are the drawn on the date of the peak of yield. ( Even though yields drop, dollar continues to grow. Like a delayed reaction. Unsurprisingly, yields lead DXY growth. ) 2. Then we draw fib retracements, with 1 being the DXY value at the time of yields peaking. And 0 being the bottom of the DXY jump. The peak of DXY is conveniently at 1.618. (or maybe I conveniently drew the chart such that 1.618 appears every time, to further validate myself) 3. When yields return to "normal levels" (red vertical lines), DXY dives. The location of the red vertical lines, as well as what is defined as "normal yield level" are defined by the arbitrary target of 1.618 I put. IF yields have already peaked, and if my theory is correct, DXY will reach 120, and when yields return to where they were. Even if the price target is inaccurate, the fact that DXY continues to grow after yields peak, cannot be ignored.
TVC:DXYLong
by akikostas
The Four Quadrants of the Economic CycleUse this as tailwinds for your trading and investments to spot the capital inflows when the time comes. I would say we are likely in the inflationary bust stage (1) coming out of the disinflationary boom stage (4) for the last decade and beyond. I would dare say the Inflationary bust stage is next (2) as the central banks try to kill inflation by raising rates and destroying asset prices. To fix the economic damage they would have to eventually change their monetary policy which would then bring us into an inflationary boom (3) The cycle repeats over and over but I'm positioning for the Inflationary boom stage (3) as I believe this stage will last many years.
TVC:TNXEducation
by AxeCapp
31
10 Year Note Yield / 10 Year NoteIt's been 234 Years since the 10-Year Bond Note deteriorated to this extent. The United States Treasury's formation was a Year away - 1789. 9 States had ratified the US Constitution. In order to pay for expenditures during the Revolution, Congress had only two options: print more money or obtain loans to fund the budget deficit. Congress became far more dependent on the printing of money, which led to hyperinflation. Congress lacked the authority to levy taxes - doing so would have risked alienating an American public that had gone to war with the British over the issue of taxation without representation for the Crown. ________________________________________________________________ The first 6 Months of 2022 have been a disaster for Bonds. Unfortunately, it is simply just beginning. At present, the "Disinflation Wave" is in the trade as the Media / Wall Street ups the narrative and continues to bang the Commodity Rollover as evidence. Typically (although we do not use History as a Guide as this is the largest Bear Market in History, it is unprecedented as we have noted for months) we see an 8 to 13 Month mismatch cycle for "Dis-Inflation". Although Demand Destruction is being accelerated in Capital Stock losses, people eat, drink, drive... consume material things required for their very existence. _________________________________________________________________ The most recent 4-week, 8-week, 13-week, 2year, 5-year, and 7-year auctions were a significant failure at a time when the FED reportedly reduced their balance sheet by $21B after a retracement for several weeks off the May 25th outsized and front-run dump of $51B. Meanwhile, Reverse Repurchase pools continue to swell to new all-time highs, most recently $2.34T - earning 1.55% and safely out of perceived harm's way. Depression concerns are clearly intensifying. 2 Year Bond Futures continue to Invert intra-day. M1 / M2 / M3 continue to flee to the Big Lots Pool. _________________________________________________________________ Negative GDP reinforces the Demand Destruction - Consumers will out how Inflation peaks... Central Banks claim to want Positive Real Rates. Consumers are rolling over, demand destruction is seeing far broader participation as Savings / Investment / Incomes decline at the highest ROC's in decades. This would require an outside Fed Fund Futures move, one that appears improbable for the near term. I'd like Ashley Trevort Twins - Seems improbable as well. The difference is, that the odds favor my wish. The Bond Market will retrace in select points on the Yield Curve, but ultimately the Negative real rate to Inflation will find its Afterburner. _________________________________________________________________ Entities are not going to step up, this is clear. The ticking insolvency bomb fuse was lit in early 2021... How long is that fuse? Not long. Equities remain the Capital stock to destroy, Housing / Alt Coins / Metals ... etal are not long for this environment. In order for Global Central Banks to meet their stated objectives... they'll need to become far more aggressive. Will they...
TVC:TNX
by HK_L61
2
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
TNX-The chart you should be following very, very closely!!!I posted about TNX at the end of March and warned that we were in unchartered territory. At that time, TNX had bullishly crossed the monthly cloud which was something it had not done during my lifetime nor probably most traders lifetimes. We are just about to quarter's end (June 30th) and you can see a clear breakout on an Inverse H&S is occurring. I see nothing but tailwinds for this chart within the next 2 weeks so I don't see how we don't close the quarter above 3.056. The measured move implies a target on TNX of 5.502 with the ability to "wick" above to 6%. Debt is becoming more & more expensive by the quarter and it's all happening very, very quickly. In addition, have a look at the quarterly charts of Wheat, Rice, Soy, Corn & Oil...all of them look to be either breaking out on the quarter or they are just bullish AF. Inflation, as it relates to what is most essential in life, has not peaked...
TVC:TNXLong
by Vixtine
7
US10Y making H&S topping pattern with long weekly hammer?US10Y TNX may be topping out. It is both a measure of economic activity & inflation expectation. So is the economy starting to slow down or is inflation slowing down shortterm? It will take years for inflation to come down. If the FED can pull inflation down to at least 4% in a soft landing, it will already be a big success. Stagflation (rising inflation in a slowing economy) is still a big risk, which may take years to recover. A hard landing & aggressive rate hikes may be devastating for stocks but the economy may recover faster. More pain more gain. A topping TNX will be good for TLT bonds & growth stocks. Next supports are 3% & the H&S neck at 2.7%. A measured move for H&S may take TNX to the yellow 2% upper pivot zone, retesting the blue wedge or maybe to retest the big red downchannel from 1981. Not trading advice
TVC:US10YShort
by xtremerider8
#TNX #US10Y 10 year yield at a top?So the 10 year yield has run hard on interest rate hike expectations. However, as can be seen from the chart, the yield is currently about 93% above its 50 month moving average, the highest it has ever been...by far. Using the TD indicator one can also see that the yields are potentially topping this month. As can be seen from the Stochastic and RSI below, both are at major tops. The yields and DXY priced in a more hawkish FED the last couple of days since we got the higher than expected CPI reading on 10 June. Chances are that the FED will not be able to continue with higher interest rate hikes as this will crash the market. So, the yields and DXY might have been running based on expectations but might revert quite a bit on actual release of FED interest rate decisions tomorrow.
TVC:TNX
by chsmit
TNX - Walking the Scarlet HarlotPoof, up - down - all around... 2.76 dipped in @ 2.702, good to see. With the FEDs distro of USTs and MBS well underway ahead of June 15... gobbling up Yields aren't working out so well. No. Supply Limited thanks to the Fellen over @ the Treasury... is now a catalyst for increased chasing. Jerry can offload the Junk to Banks desperate for Yields as they are seeing Loan Activity dry up like the Mohave. Going to be an interesting Liquidity Crisis unfolding again.
TVC:TNX
by HK_L61
TLT may return to 132-135 neutral zone as a flight to safety.TNX 10-yr yield may have peaked out as investors rotate to the safety of bonds in the 120-114 accumulation zone. TLT has completed a big M-pattern stopping at almost perfect FIBO levels. This ABC wave has already made a 300% retracement from the ATH of 173.89 made last 9Mar2020 before pandemic striked. The 132-135 zone will be some sort of neutral area for determining inflation or deflation. It is also the neck zone of the M-pattern. As it fell quickly from this zone, the rebound will also be very fast looking at the volume profile that has a large space in between. 5 impulse waves & 3 ABC corrective waves have end this EW cycle & a new cycle shall begin as TLT returns to the baseline of my slanted FIBO CHANNEL where wave 3 had started at Feb2011. Not trading advice
NASDAQ:TLTLong
by xtremerider8
TNX ZN TKT ZB - 10Year / 20Year / 30YearSh_t Mixed remain Bonds... every flight to Safety has been utterly and systematically crushed. It will be again and again as our Bond Market losses its Pillars of which there are 4. One by one these are failing. Longer-term, the lose/lose proposition will compound. _____________________________________________________________________________ Short term, we'll see how YCC and an overall Market Panic can trend Yields. The Fed has permitted the Bond Market to generate the necessary adjustments. Strenght - historically has been in control of only the short end. Operation twist is no longer relevant, the FED can simply clip coupons and trend into expiration of Holdings while reinvesting across the entire Curve. Sadly, engaging in Yield Curve Control (YCC) crossed the Rubicon. My thesis has been proven entirely correct - instability by design.
TVC:TNX
by HK_L61