TYX-TNX update - initial breakout - 4/30/2015This is a followup to the same chart from last month. The yield spread did manage to break out (red resistance line and 10 MA). But we do not know what this means to the broad market at this point.
TYX
MONEY GOES WHEREVER, WITH THE BEST RETURNS A perfect storm waiting to happen with the stock market of major economies like US, Japan, Europe, and most recently China reaching for new highs.
The breakout of China stock market certainly doesn't look healthy at all. Money will find its way where returns are the best, when there's nothing else to invest in the real economy during a slowdown.
Its a game of musical chairs happening every 10 years, be prepared and you'll reap the rewards of the tears. :)
TYX going upThe yellow line show us a nice floor to TYX for bounce... IM NOT SEEING RATES GOING UP, Im just think that in the next weeks rates will bounce from a short term perspective...
Then yes, we will break the yellow line and I think that we are going to see new lows (below 2%)
Yield spread vs. market top study - 3/10/2015This chart studies spread between 30 year and 10 year treasury yield, and its correlation with SPY top. In 2000 and 2007, breakout of this spread marked the top of the market. So can this time be different? Let's wait until it breaks out (if ever) and then we will know.
TYX study - when to bottom - 2/1/2015No definite answer. As shown on the chart, some cases took quite long time with big drops, some took no time and recovered quickly. Bottom line is to assume it should keep going lower and watch signs of reversal on weekly chart closely.
TYX (30 year rate) pattern for the last 20+ yearsEssentially the descending triangle pattern has repeated 4 times since 1986. And now we have it again. Will the rate break down and go as low as 1%? Time will tell (and best yet, we will know soon enough, as a matter of next couple of months).
How low can TYX goOne possibility is 30 year rate slides to 2.5% and TLT spikes to $135 in the coming months.
Is rising rate bad for gold?People tend to think rising rate is bad for gold and falling rate is good for gold. The chart shows there is no such cause and effect. Gold and rate can go same direction and opposite direction.
30 - Year Treasury Bond - Long entry30 - Year Treasury Bond
Long entry on Tentative Up Trenline and Resistance Line Level that can act like Support Line..
Stop loss below Resistance Line Level.
Take profit at 3.73.
See below the links TNX 10 - Year Treasury Note
TYX (30 year treasury bond rate) projectionUnlikely a straight down, but the current trend is down (meaning good for long bond like TLT). No wonder the housing market is weaker? Maybe people are expecting even lower rate!! (but who knows/cares - just follow the trend until it changed, then follow the new trend after established).
SPY/TNX ratio Been following this chart for a while, as a possible healthy/sick performance indicator for stocks.
The SPY/TNX ratio is diverging for the last two years now, and If I read correctly this chart, it's not stocks healthy for sure. Of course can be diverging for ages or even centuries in this economic recovery miracle we all live in, until already built in energy pressure finds a way out.
During 2008 foretold the coming disaster. At the 2009 bottom gave an early, successful, long entry, while mid 2011 the divergence led to a correction.
What about now? I guess patience it's the only way to find out sooner or later...
Cheers
Panos
