Us10y!
US10Y: Short term pullback ahead.The US10Y hit the top of the five month Channel Up, which started after a 5 time hold on the Support Zone, while the RSI shifted to LH (RSI = 68.642, MACD = 0.088, ADX = 56.354). Having completed a common +12% increase, we get the same sell signal as all prior Higher Lows. Our target is Fibonacci 0.5 (TP = 4.315%), highly likely on course for contact with the 1D MA50.
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US 10Y TREASURY: at overbought sideFed Chair Powell's speech after the FOMC meeting, held on Wednesday significantly moved the markets during the second half of the previous week. A “higher for longer” wording used by FOMC members was not welcomed by the market. Fed Chair Powell mentioned another rate hike till the end of this year, with an expected rate cut somewhere during the end of the next year. FOMC projected reference rates to end 2024 at 5.1%. Such projections implied immediate market reaction and 10Y yields reached their highest levels since 2007 and level of 4.50%. Yields are ending the week at a level of 4.43%.
RSI index reached a clear overbought side, which would in the case of 10Y yields, mean that the market had priced in new information received from Fed Chair Powell. There will be another rate hike till the end of this year, and a level of 4.5% has been priced. From now on, it could be expected some relaxation in the yields, which might return slowly to the level of 4.3% in the coming period. The level of uncertainty is currently increased on the market, but at this moment, further move beyond 4.5% level should not be expected.
GOLD READY FOR NEW ATH?! (UPDATE)🚀My bullish stance on Gold still remains the same. Yesterday when Gold sell's got closed out, the bullish momentum violated a lot of structures to the upside, indicating a possible change in direction. As long as Gold remains above the last low of $1,901 I am still bullish.
However, if Gold breaks back below the low of $1,885 we can go back to looking for our original sell targets of $1,887 - $1,850📉 Either way we closed out Gold sells at £8,000 profit so we can't lose either way!
GOLD READY FOR NEW ATH?!🚀Is Gold getting ready to surpass its current high & reach a new one? Very high possibility!
Even though a little more downside is expected, this version could also play out very well. I am currently holding short positions, but will open a buy as a hedge. I will keep you updated on this move!
We've seen a Wave 1 & Wave 2 completion on the 12HR TF, followed by a CHOC + BOS which indicates a change in trend direction. If market can BREAK ABOVE the last high of $1,952 this move here will be a very good play to get into.
Who's ready for a FRED 50 Trillion Balance Sheet? I Am.
Japan has no completely lost control of their bond yields.
Japan has completely lost control the US Yield Curve Control.
The FRED paused (as I expected they had no choice).
The FRED realizing they need to initiate YCC / QE / Rate Cuts before end of 2023 or we're going to see an economic meltdown.
Option 1, let yields raise > mortgages blow up > bank collateral blows up bail out 100 Trillion.
Option 2, start YCC / QE / Rate Cuts down > things don't blow up but spend 50 Trillion.
What's hilarious is there is ZERO news coverage on this ZERO, the USA setup a YCC facility with the BOJ to patch bond yields yet the JAPANESE currency CANNOT handle it and the BOJ is starting to actually panic / tap out.
People waiting for a "country" to enact the third world war, I'll give you a hint they always start when some major financial system breaks. That's this this is where we are at.
Japan has a GDP of only 4.941 Trillion, if they initiate more YCC / QE they will start to turn into the Turkish Lira and then mass people are going to panic about US bonds.
THERE IS ZERO chance we get to 2025 without a FRED balance sheet of over at least 30 Trillion, buckle up.
Is this US01Y wick going to crash the crypto market ?!Obviously as money flows into cash it flows out of assets
If rates on US bonds rise then the incentive to hold cash increases which dries up liquidity almost everywhere else. We are seeing very bullish signs (current data/can fail and reverse) for both US Dollar and US Yields. Which of course correlates to bearish signs for assets prices (bitcoin/stocks/real estate).
US administration may want to have the pain now before US election year
Rampant inflation is not great for an administration to have during an election year.. so having that curbed as much as plausible before election year is important. Which allows an administration room to create stimulus during election cycle (to win votes). Essentially get inflation in order now so they can create more inflation('stimulus') later. This would be the outlook of pushing asset prices down now so theres room to push them up coming into elections.
If that US01Y wick is filled then crypto should fall
Filling that wick would likely not only increase the yield curve inversion but also force asset prices lower. If it can be timed then we may see BTC price fall pre election but allow US01Y to fall come election. Which in turn allows BTC price to rise come election. This all of course overlaps with BTC halving.
The important thing is to be liquid both financially and mentally to changes. If USD and rates continue to rise then dont want to be too(!) asset exposed and missing out on the USD/rate rise benefits. That said.. if USD/rates fail this break out of course dont want to miss out on asset price boom. Need to be okay either way this goes.. whilst looking for low risk opportunities to rebalance exposure with changes in the flow of capital (and data)
GOLD: Daily Analysis |Bullish Pattern|There are many considerations that can be made about Gold, and today we share some of them.
In this geopolitical and economic context, Gold is an important pawn on the chessboard. If we want to understand where the price could go in the coming months, we need to understand why we got this far today (as I write the Spot price is 1925).
💡 What is really supporting prices well?
The answer is very simple, operators have many doubts and uncertainties, so they buy gold, especially as long as US 10Y remains bullish:
(Click on Analysis below)
💲 The US Dollar is also important in this game, and in the coming months it could even surprise us...:
(Click on Analysis below)
📈 Technical Analysis
Having said this, from a technical point of view, if we look at daily chart, we do not exclude a bullish harmonic structure with an interesting potential target around 2000.
🔏 Risk Management:
As we showed in our latest intraday analysis, we went Long the last bearish leg on 1H chart, so it will only be necessary to move stop loss to B/E:
(Click on Setup below)
🔴 What could cause this to fail?
What could cause this to fail?
The FED's interest rate decision and inflation data are expected next week, these events could actually change this scenario.
In conclusion, even if this analysis will be correct, the path will be long and full of obstacles, so it will always be necessary to look for intraday supports and potential Reversal Patterns on small time frame every day.
Thanks for your attention.
Trade with care
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US 10Y TREASURY: time for relaxation, or maybe not?The US inflation figures were published during the previous week, which showed that it is not going to be an easy task for the Fed to bring it back to its 2% target. At the same time, oil was traded above $90/barrel with some analysts’ prediction that it might easily reach the level of $100 till the end of this year. Taking current circumstances into account, the market was able only to move in one direction – bringing 10Y Treasury yields back toward the 4.30% level, where the benchmark is finishing the week.
Currently there is a bit of a tricky moment on the charts. Namely, 4.3% could be treated as sort of the resistance level for 10Y Treasury yields. But, taking into account that the FOMC meeting is scheduled for the week ahead, surprises might be possible in terms of a break of 4.3% level. However, if everything stays as anticipated by the market, then yields might come a bit back down to 4.2% levels.
NIFTY: "My time, My Rules"Rules are blurred, game changes. Credit goes to the "Ground" reality. Four wickets in one over, no hattrick, but history is made. 50 looks like double century. Stunning Performance of a century by Siraj, a loss to both who spared time to watch, and those who failed to watch. Clearly, Siraj said "My time and My rules". Japan's increasing worries of Chinese aggression. North Korea cosy with Russia, just a week after China Visit to Russia are some uneasy moves. China says, not to use nuclear weapons is an outdated promise. Bulls here say, "My time and My rules". Clearly many important messages, but no peace for bears. Cues are negative, who cares them though. Crude is 90 plus, 10 Y yields cross new high. Data from US Michigan 5 Year expectation softens, but this inflation will remain higher for longer. Europe crude crosses 100 mark. Dollar remains elevated to the discomfort of the bulls. Our own trade deficit widens, one eye on the rupee is once again needed. Looks the resolve is to hold the range, as the last State Elections are around. Controversy surrounded about the economic data, whether it is based on income or expenditure, MOF gives clarifications. It's difficult to gauge the mood, as the Retail continues to buoy the economy though concerns remain on the path ahead. With tomorrow being holiday, today close is vital as that would confirm the robustness of the move ahead. It is one thing the Index moving up, it is altogether different if the mid and small caps give back or climb up further. Clearly the Index stocks are relatively positive than the NIFTY500 basket. Not suggesting a softer tone, but profit taking would remain the mantra. With the third week posting strong gains, it is important to look at the shape, size and space. Shape is strong, with relatively small upper and lower wicks, Size is large, Space is new High. The PIP graph shows the last half hour profit taking, the open cues can bring some more, but ideally should be bought. 20060 is the new base while this holds back to 20280-330 is the expectation. Tread cautiously, nothing to jump and pump. Broad range for the day remains 20080-20280
US10Y divergence suggesting "Sucker Rally" aheadDuring market crashes yields plummet along with equities in flight for safety and also they tend to lead in the decline. But here as we see 10-year yield divergence is suggesting equities can retest ATH once more before the crash. This also aligns with previous market behavior where equities rally on rate pause leading to recession - a "Sucker Rally" essentially.
Yields Spread Market Crash AstrologyYield spreads tighten and also invert leading into a recession and it is only once they start to de-invert that any sizable decline begins once all the durations have been squeezed and there is nowhere else to run/hide for market participants. The 10Y-03M curve is of particular interest compared to 10Y-02Y, which almost always leads to a crash once that cuts above 0.
Current widened spreads suggest there is still time for any black swan event to realize. I would expect long duration to rally in the next 2-3 months to narrow the spread around ~5% range, this can occur with help from TGA refill that's occurring until the end of September. Once at the end of the fall, I think we will see trouble brewing in markets from high rates and short liquidity.
Net-net, equities, and all risk assets can float around until late August/September before any major decline can transpire.
GOLD READY FOR NEW ATH?!🚀Is Gold getting ready to surpass its current high & reach a new one? Very high possibility!
Even though a little more downside is expected, this version could also play out very well. I am currently holding short positions, but will open a buy as a hedge. I will keep you updated on this move!
GOLD SHORT TO 1848🩸We have 1 final leg down on Gold, before we see the long term bullish momentum return & target new ATH'S.
We are currently in Wave C which is the final corrective move to the downside. Hoping to see 1 more retest of $1933 - $1938 zone, before we see the melt begin. Also, we have CPI data this Wednesday, so that could be the fundamental catalyst used to manipulate price action.
GOLD SHORT TO $1,877 (2H TF UPDATE)📈Gold moved lower today, putting us 700 PIPS in profit now!🎉 However, bare in mind this move down happened prior to CPI tomorrow so this could merely be a liquidity grab. We also have internal LQ sitting around $1,933 - $1,938 which we should be careful about.
I have moved Gold Fund investors SL to $1946.60 which'll bank us 350 PIPS profit if market was to reverse. Risk free trade for my investors🤙🏽
US 10Y TREASURY: reversal is still pendingThe market uncertainty of the future course of inflation and FED`s next moves continued during the previous week, especially after the news that Saudi Arabia will continue with its decreased supply of oil by 1 million barrels per month until the end of this year. The price of oil surged on this news, putting the markets back on the negative sentiment. However, Treasury yields did not make a significant reaction to this news, as investors will probably need some more time to digest potential next Fed's move. The 10Y Treasury yields started the week around 4.18% and went back to the level of 4.30%, without a strength to break this level. They are ending the week around 4.26%.
Current charts are pointing that there is time for further relaxation in the 10Y Treasury yields. In this sense, the level of 4.0% is still pending to be tested. During the week ahead yields might again revert back toward the levels from the beginning of the week, around 4.2%, with some probability that 4.10% might be reached. A move toward the upside, in terms of 4.30% is unlikely at this moment, at least based on the charts.
50DMA and TBILLS indicating when bear market hitsHere's a closer look at a highly reliable cyclical bear market indicator. Over the past two decades, it has consistently proven itself as a trusted signal, often aligning with yield curve inversions. In contrast to employing trendlines and breakouts for precision, this chart relies on moving averages. These moving averages function in a similar manner to channels, as they calculate the mean, much like a channel does in various aspects. When there's a breakdown from this mean, it typically signifies a significant loss of support.
From a fundamental perspective, this shift suggests that the market is heading towards a risk-off sentiment, leading investors towards products such as TLT due to their appealing pricing in comparison to stock valuations. The divergence we're witnessing appears unlike any we've encountered before. To return to the mean, it would require either a prolonged consolidation at higher levels for many months or a sudden and sharp downturn. I have my own theories on how such a downturn might occur, possibly triggered by an event akin to a cyber attack on financial systems, similar to the disruption caused by the COVID pandemic. However, that's a discussion for another day.
In this scenario, our focus should be on reacting to developments rather than attempting to predict them. Currently, the most crucial level to monitor is a potential retest of the 4100 range on the SPX, coupled with how the yield curve reacts when it approaches its initial resistance. If a breakout occurs in these areas, it could signify an increasingly uncertain market environment. For a more detailed analysis, please refer to the chart below, which provides insights into the points I've discussed.
This chart pattern suggests yields are going higherUS10Y remains in an established uptrend on the daily chart, and Friday's bullish engulfing candle suggests a swing low has formed and more gains are to follow.
But having looked back at price action since the April low, we note that prices are yet to break the low of a bullish engulfing candle if it has formed after a pullback or period of consolidation. Granted, there are one or two of those engulfing candles that do not fit the exact description (as an open or close is out be a few ticks, meaning it has not truly engulfed). But we've relaxed the rules to note bullish candles that show clear range expansion over the prior candle.
And if that pattern persists, it looks like the 10-year yield (and likely yields across the curve) are at least going to make an attempt to retest or break their cycle highs.
GOLD SHORT TO $1,877 (2H TF)📈Post NFP analysis. After Friday's NFP data was released, we originally saw a spike up on Gold, hitting the supply zone of $1,952. This move would have induced new buyers into the market, now in turn liquidating them as price melted back down. Would like to see a move towards $1,926 - $1,922 as the first target & see how price action reacts around that zone.