treasury buying slowstreasuries coiling up for another move. momentum on 10y crashing even with feb no-hike odds at 98%. hawkish minutes meeting next month could very well send yields ripping. good watchlist candidate.
Treasuries
Positioning | Net Non-Commercial US 10y T-NotesAt extreme levels, however, the data doesn't look correct... I'm certain it is the most extreme since 2005!
TLT: Short term rally, potential pullback in a downtrendTLT offers a low risk buy if we make a new high tomorrow, with a stop under the recent swing low.
We can aim for a retest of weekly resistance, as signaled on chart. I'd rather buy and exit there to be safe. There's a chance we might be able to flip short at that level, but I'd rather take that trade by buying $USDJPY and $USDSEK for instance, and/or shorting $EURUSD.
Good luck,
Ivan Labrie.
Sell the hell out of LT treasuries if we pullback to the meanOne of the most obvious trades out there. Pullback to mean would be KILLER value. Will be watching this closely and using Marty Armstrong's Socrates levels for confirmation.
There is certainly a chance we continue down further to that next support trend line before pulling back. In that instance we may see a H&S formation occur with the right shoulder at fib.
US 10-yr yield – rally overdone or more to come?The global benchmark for the rates – the US 10-year Treasury yield has rallied this month from 1.77% to a high of 2.417%.
Such a sharp rise in yields in such a short period of time is undesirable since the world is awash with debt…as noted by Nicole Elliot on yesterday’s Finance show
Marc Ostwald, Strategist at ADMISI also noted the sharp spike is overdone on today’s Finance show. However, he also makes an important point – The rise in yields is not only due to Trump Bump and the resulting rise in Fed rate hike bets, but also due to the fact that China and Gulf nations are liquidating their treasury holdings.
Coming to technicals – Monthly chart
The yield has retraced 23.6% of the drop from 2006 high to 2016 low. The Fibo level is 2.269%.
We also see a bullish break from the falling channel.
Furthermore, the monthly 50-MA appears to have bottomed out.
To me, technicals suggest the yield has bottomed out. Agreed that the spike is overdone and technical correction is likely. However, the yield may have made a long-term bottom.
Bottom in yields is in, 3% by end of 201710-year Treasury Note yield (TNX) is going to climb towards 3% by Q4'17.
Inflation really here?TNX has been rising very rapidly. Now it's above 200-daily moving average. RSI is signaling overbought, but one must remember that it can stay overbought for some time.
Maybe investors are realizing something?
twitter.com
TLT: Go long above Brexit resistanceWe have a nice double bottom in TLT. We can speculate on going long on a break above the Brexit key level resistance at 134.42.
Good luck!
Ivan Labrie.
Long Opp HappeningLong term trend up indicated by the 89 day simple moving average over the 89 week moving average.
Short term price action creating a great trading opportunity to go with the trend.
Fractal momentum is reaching a maximum to the negative.
Fractal acceleration is about to turn positive.
We are waiting and watching for entry signal.
TLT: Time to scoop treasuriesWhen most people are fearing an asset bubble in treasuries, and after increasing fears of rising yields, with many doomsayers calling for the end of this 'bubble', and a rapid selloff, it's clear that $TLT has found support, and that we can take the long side if it breaks last week's high. An integral part in any portfolio, $CEF, and $TLT.
See my previous $TLT publications to have an idea of how effective the trading in bonds has been.
Good luck,
Ivan Labrie.
Rate hike indicator: the 3 month treasury The reason for Friday's massive market selling is said to be because of the Fed's message that the rate hike is coming.
Seems that it may just be broad market selling after a period of complacent low VIX and broader overvaluation.
For confirmation that the rate hike is coming I'll be watching the 3 month treasury rate closely for signs.
A move from .30 to .55 would seem reasonable over the next several months if we are to see 25 bps increase for 2016.
In 2015 the 0.25% rate increase was starting to be priced in by late October into early December.
The CME Fedwatch tool currently shows the futures are betting on 58% chance of rate hike by Dec.
Time To Sell BondsLooks like we're topping out here at the peak of a massive ascending wedge. HIGHLY likely we form a beautiful high test on the quarterly chart but I'm not going to wait around for that to happen.
Martin Armstrong's Socrates signaling major trend change to downside within TLT which confirms techs.
Trade Management:
First major area of support seems to be around 115-120. We'll likely breakout and retest that level, then head back up to test bottom of wedge before headin down to the 100~ area where we formed our major 2014 low.
Best guess is we bounce off of the 100~ area heading back up to the monthly 50/60 ema and 115-120ish level to form a right shoulder.
If/when we get that right shoulder we'll then break down to all time lows. If this occurs it is going to be due to massive instability within US Government. Probability of gov default will rise DRAMATICALLY and could likely occur.
Gold oversold intraday but continuing correction towards 1297The 1327 retracement level has been breached today following the sustained bounce in 10 year yields. Although the market is looking oversold intraday, I expect the correction to continue to potentially as low as 1297 before becoming attractive again from the long side.
I remain bullish on gold medium and long term (as I have been all year) with a year-end price target of $1400-1425 following a correction. In the short term over the coming quarter I would not be surprised to see gold contained within a 100 point range of $1300-1400, presenting an attractive risk/reward skew for longs.
US 10-yr yield Bearish Cypher, what it means for markets?About 5 days ago, I had pointed to the possible Bearish Cypher formation on the 10-yr treasury yield . The pattern stands completed today.
Point D = 1.499% = potential reversal zone (PRZ) has been tested. As per the pattern, we should be heading down from here. For related markets this means -
US stocks may be in for correction
USD/JPY rally could run out of steam if treasury yields slips from PRZ
US 10-yr treasury yield – Bearish Cypher set upThe hourly chart shows bullish price RSI divergence led to the recovery in the yield from the record low of 1.322%.
We also have a bearish cipher set up, courtesy of the recovery from record low.
Point D, which is the potential reversal zone, stands at 1.499%. This means the yield could turn lower from 1.499% or if the level is breached on the higher side on daily closing basis, we may be in for a rally to 1.59%.
Breach of 1.499% on the higher side appears likely if the non-farm payrolls report beats consensus estimates and wage growth numbers spike.
Otherwise, yield is more likely to reverse from Point D = 1.499%.
Treasuries/Gold Ratio 6/24/2016Watch the lines - this is the perception of long term Dollar value divided by Gold.
BTC, Gold, 10 year notes: UpdateAs I had explained in my previous post, it was likely to see an 'emotional high' in these instruments, followed by a sharp decline.
After this break down, all these instruments are at a major support level once again, and in sync too.
Notes:
I'd get out of shorts here and maybe flip long in a few days.
Gold:
It might have some more room to fall, but if it makes a higher daily high tomorrow, it is possible to see a rally.
If short, cover half and trail the stop to today's high after the close perhaps.
BTCUSD:
I went long with a small risk position, considering a 10% downside risk as worst case scenario. I used spot, have no stop, and no margin. I also bought ETH with a 20% downside tolerance here.
The plan is to capture the upside in BTC and ETH once they resume the weekly uptrends they are in, and avoid losses in a choppy enviroment in gold and notes. The trades have been good so far, so try to protect profits first.
We will see volatility, so it's good to be prepared.
Good luck!
Ivan Labrie.
BTCUSD, 10 year notes and Gold: Are they ready to fall again?This is a simple analytic piece on Gold, Bonds and Bitcoin. After the Fed meeting yesterday, the market clearly decided the fears of low rates and weak dollar were justified, with a very dovish Fed, and gold and 10 year notes rallied (and quickly chinese buyers followed suit in BTC).
The interesting part is that gold has yet again broken the recent highs, which like we were discussing in the 'Key Hidden Levels' chatroom, might be warning us that there is a Megaphone type pattern unfolding here, contrary to popular belief that this is a consolidation before a giant uptrend starts in Gold.
The gap up in ZN1! is really remarkable here as well, it might give way to a very strong topping pattern soon.
BTC has hit a monthly resistance, but is currently above it. I'm waiting for the month to close to more precisely determine when to short it (if at all). For now you could maybe trade shorter term long setups in it, although it might be dangerous in this climate.
The bottomline is, that for gold and 10 year notes to top, we needed mass hysteria to reach the boiling point and I think this might be it. We'll need confirmation to enter shorts, but if you're long, look to trail your stop or get out, that's my personal reccomendation. The same is true for BTC longs.
I'll update the chart once we get a good short setup in either of these instruments.
Cheers,
Ivan Labrie.
Great Short Opp Here!Futures are not for everyone. Futures trading involves financial risk of loss. Please consult your professional trading advisor before placing any trades.
