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Treasuries

Rising rates: Why is the 30 year yield so low? The 30 year treasury yield has traded under 3.25% for almost 4 years now. The Fed continues to hike rates on a quarterly basis and Trump is unhappy about rising rates. Every day we hear how the economy is 'in great shape', and jobs data is 'as good as it gets'. More significantly what is pushing up rates are increased treasury issuance and the Fed's accelerating Quantitative Tightening. So all in all why isn't the 30 year yield closer to 4% like it was only four years ago? For several years the market has priced in low expectations for the long term. The yield curve continues to flatten towards the lowest spreads since leading up to the great recession. (28 basis points on the 30-5 spread and 30 points on the 10-2 spread). At this rate the curve could flatten or invert in 6 to 12 months. An inverted yield curve historically is followed by economic recession. What's your thoughts?
TVC:US30Y
by dime
2
Bonds Remain IrrationalRegarding today's bond market behavior, I am reminded of the following words of wisdom mostly attributed to the economist John Maynard Keynes: "The market can remain irrational longer than you can remain solvent." From Trump's successful efforts in negotiating an end to a 70 year North/South Korean war, and denuclearization of NoKo, to the Fed raising interest rates hawkishly, to the ECB finally declaring an end to QE, everything seemed to support the bond market collapsing further. My original profit target in ZN1! was right about where the red arrow is. I anticipated it to retrace the entire move from the FOMC meeting. Perhaps it is because the bond market is historically bearish. Perhaps it is because big players are cashing out of their net short positions, or because insiders know something we don't, but US treasuries have stabilized and have formed a range, if not a bull flag. The Kovach Indicators (at the bottom) show a solid bullish trend, and we have broken numerous levels of resistance. Perhaps we need more data events like the Empire State Manufacturing Survey, or Consumer Sentiment tomorrow to help this sleeping giant awaken once more.
CBOT:ZN1!
by quantguy
4
US 10-year T-notes. Downside could be limited. Target corrected.This idea supports the previous interest rate outlook. I advise you to book profits on the idea given last September (see related) earlier than set target at 116'07 and this is why: The long-term trend together with the previous low offers strong support for the price and could reject the drop in the 117-118 area. In this area the wave C = 1.272 of wave A and this also fortifies the support. So better close shorts there.
T
by aibek
Short Squeeze for the Treasury bearsTypically I have seen that when everyone is on one side of the trade its quite easy for the market to make fools of the participants. The speculative short position on US treasuries, specifically the 10 year, is massive (and for good reason). While I remain a longer bear view on these treasuries I think we might end up seeing a short squeeze before we see 3% yields. The 10 year is showing some signs this could accelerate and hurt alot of bears who need to cover their positions.
T
by skyman9025
5 years treasuries in bullish flagthe course of the 5 years treasuries have rosen from 1.62$ to 2.60$. Even if the market expectations for higher interest rates are still active we can see a little consolidation on this level - which is the fib retracement 100. After the consolidation in this flag pattern we can expect a continuation of the rise to prices around 2.90$ (fib extension 1,272%). RSI: a little bit weaker but still in buy zone ADX: DI+ just turned to up, but low momentum conclusion: no change in trend, only some consolidation
FLong
by Luettis
USD interest rate growth could be limited by previous top.At the end of last September I called for the drop in the 10-year US T-notes with quite aggressive target (see related idea). In this and the next update I came to the thought that the drop could be over earlier as rates are reaching important resistance level. Despite the aggressive tone on the rate rise in US, I think the upside is limited based on this chart. Wave 5 of (C) already has reached the target zone and approaches the former top at the 3.04% where the wave 5 = 0.786 of waves 1-3. It is quite possible that when we would reach that area above 3 pct something in the economy could cry out - stop it! Let's see!
T
by aibek
The Bond Bears Paint in RED!The correction from the ATH was inevitable as the Dow broke well above it's long term growth channel. What we've seen in the past few days is hungry hungry bears beginning to feed when the 10 year T Note reaches the 2.85% yield mark with today being no different. What's important to recognize in this relationship is how the DOW bulls are attempting to hold on these downward movements. The 1100 point drop found support at both the 100 day MA and the 0.236. The next two days show a brief brake of this support as well as an attempt to break out of the long term channel again and find higher support at the 50 day EMA. This breaking out of the longterm channel and holding at the 50 day EMA seems to be overly bullish as we had another 1000+ point drop with the market now closing below the 0.236 fibonacci marker. Currently sitting in a tricky spot within both the long term uptrend and short term down trends channels, as well as beneath the 50 day EMA support, with current volatility makes predicting the market a dangerous move, however it seems reasonable to expect that Bonds and Equities will continue their jazzy swing dance range trading within downward channel until a support is found in the short term. The 0.236 and the 100 day MA has been a decent point of resistance up until late today so it is not out of the question a consolidation occurs here with an attempt to breakout of the downward channel, however the 200 day MA and the .382 are also certainly within reason. Consolidation at either of these two areas does not call for a market reversal in the short term, as again they both reside within the current long term uptrend channel, however a break below the 200 day ma could be a much stronger signal towards the idea that this is a reversal of the long term trend, only time will tell. *This is by no means financial advice and I'm quite new to this, so take the analysis with a grain of salt and use it as a gauge against your ideas, not as a sound prediction from an expert. Furthermore, critiques are also more than welcome.*
DJ:DJIShort
by jcalo23
FOMC Minutes Reveal Inflation Still a ConcernThe FOMC minutes are being released as I write this, but weak inflation seems to one of their key concerns. Expect the yield curve to continue to flatten as this gets priced into the long end. The spread between the US 30 year and Us 2 year has been careening off a cliff lately and given this news, it is safe to expect this trend to continue. The Kovach Chande indicator is solidly bearish, confirming this, and the lower bound of the Kovach Reversals indicator is continuously being pushed. If you want access to the Kovach Momentum Indicators, Reversals Indicator, or Crypto Specific Indicators, please sign up at quantguy.net!
TVC:US30YShort
by quantguy
Yield Curve Below 1%, Racing to the BottomThe yield curve (spread between the 30 year and 2 year spread) just broke below 1%. All indicators suggest this trend to continue. It has been encroaching the lower Bollinger Band of the Kovach Reversals Indicator, with no retracement in sight. A retracement will be confirmed by a green triangle, if an when it happens. The Federal reserve should be very mindful of this in their December meeting. If you're interested in the Kovach Reversals Indicator and more, sign up for access at quantguy.net!
TVC:US30YShort
by quantguy
Yield Curve Continues to FallAs investors price in lower inflation and increased expectations for a Fed rate hike, the yield curve (between the 30 year bond and the two year note) is continuously making new lows. Typically, the flattening or steepening of the yield curve is led by one end, but in this case, both appear to be contributing equally. This presents a problem for the Fed as raising rates (or more hawkish rhetoric) could hurl the yield curve closer to negative territory. We can see the spread has been hugging the lower bound of the Kovach Reversals Indicator for some time, which is an extremely bearish sign. Also, the slope of the spread has become increasingly more negative. If you want access to the Kovach Reversals indicator and more, check out quantguy.net.
TVC:US30YShort
by quantguy
30 Year, 2 Year Spread Making New LowsThe spread between the 30 year US treasury bond and the 2 year bill has made new lows as the yield curve in the US continues to flatten. Anticipate a pullback at some point, but the curve will likely continue to flatten as investors price in a rate hike despite dovish comments from Bullard at the Fed. This pullback will be confirmed by a green triangle on the Kovach Reversal Indicator. If you're interested in using this indicator, check out quantguy.net.
TVC:US30YShort
by quantguy
The Yield Curve Flattens and Altcoins RipAs the markets price in the next interest rate hike by the Federal Reserve, we see the spread between the 30 year and 2 year US treasuries continue to flatten. It is probably not coincidence that peaks in the Altcoin Index match up with with relative bottoms (especially recently) in the treasury spread. Also, although this is somewhat due to the Segwit2x drama this weekend, observe how the Altcoin Index has really skyrocketed over the past couple days. This may indicate some cryptocurrency adoption from 'smart money', though many establishment figureheads have publicly rebuked cryptos. If you're interested in the Kovach Altcoin Index or the Crypto Spread Indicator, among other tools, please check out quantguy.net
TVC:US30YShort
by quantguy
US 30 Year Treasury Bill Long Trade on H4 ChartI am entering a long position into long term US treasuries from a support line clearly visible on H4 and daily charts. Although the long term perspective for the price of bonds is negative due to expected rate hikes later this year and next year, on the shorter time scale (few weeks) the Treasuries seems under-priced after the strong decline last few weeks and there are good chances of success with this trade. Risk/Reward at 1.09. Always above 1 at all my trades!
ULong
by auroraspot