Us10y!
US10 YAND US30YBoth US 10 year and 30 year charts looks identical and in a downward spiral - great for PM sector
50DMA Support Held, Bounce in Bonds Over?The US10Y yield has seen persistent support at the 50DMA since August 2020. Let's see if the 21 day EMA converges with the 50 potentially reversing the recent rise in yields, or if we see a strong bounce off the 50DMA, and continue toward the 2% level, putting pressure on growth oriented equities.
BONDS 10year yield formed the 1st 4H Death Cross since SeptemberThe US10Y has just formed a Death Cross (the MA50 (blue trend-line) crossing below the MA200 (orange trend-line)) on the 4H time-frame since September 24, 2020!. That is technically a bearish formation. It gets even more bearish if we count the fact that the price got rejected on the 4H MA50 after the bounce. The last time we had such a rejection on a 10-20 day selling sequence was on June 16, 2020.
This pattern has the capacity to stop the uptrend of the recent months and initiate bearish momentum on the medium-term. The green zones indicate potential Supports. Personally, I expect the price to drop all the way to the 1W MA50 (yellow trend-line) which is the pivot between being bearish or bullish on the long-term.
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UVXY Double Up to $10?UVXY looks poised to double in the immediate term to a 10 handle. Let's see if we get a Vix breakout (above 19.70) by the close of trade today. We'll need to see it hold for the previous resistance level (18.80) to act as support going forward...
It's Make or Break for the Burning DollarThe Dollar (DXY) is seeing support at the lower band of the wedge, and if it holds, we could be looking at potential upside to the 95 level, where our monthly target is sitting. If we lose this support, the dollar has downside to the previous low from February around 90.
Vix Ready for Lift OffVix is seeing consecutive rejections at the 21 day EMA, which is sitting just below a previous support level turned resistance. If we see a breakout above this level today, we have initial upside to the 50DMA around 20.9.
XAUUSD potential sellXAUUSD has been bullish for the first two weeks of April, with the overall general trend being bearish since August 2020 it's expected that Gold price will decline for the last two weeks of April.
SHORT POSITIONUS10Y;TECHNICAL
FORECAST:BEARISH
The 10-Year Treasury yield slips to a fresh monthly low (1.53%), and recent market dynamics may keep the Greenback under pressure as the economic docket remains fairly light ahead of the Federal interest rate decision on April 28.
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QQQ/M2: *Rubs Eyes* That's Better!QQQ divided by M2 (QQQ/M2) shows us at critical, multi-year resistance. This could be the end of the line, folks...
According to Nomura, UST Shorts are Still CoveringWe're seeing a not so unexpected bounce in Treasuries, which could potetially see the 10Y yield back at the 1.50% level as early as today. Having said that, on the monthly timeframe, we're looking at an RSI of 53, so we still have room to run, potentially to the 2% - 2.25% level by EOM. Let's see how the cookie crumbles as bond bears potentially get ready to take advantage of the new liquidity...
US 10 Y Yield Wave Analysis US 10Y Yield has shown ABC Correction & completed @ 1.782 ,
Which 50% Fibonacci retracement of Prior wave.
Now fresh downtrend may intake till 1.11.
Correlation of US Dollar & US 10 Yield is direct proposional. If Yield decrease, Dollar weak.
Stocks Rally on Positive Data, as Money Now Grows on TreesWe're seeing a massive landslide of wins across the economic data spectrum this morning, with Retail Sales coming in hot at 9.8% vs the 5.3% expected, Retail Sales ex-auto coming in at 8.4% vs the 4.9% expected, jobless claims coming in at the lowest level since before the pandemic at 576k vs the 695k expected, and finally continuing claims came in at 3.73MM vs the 3.72MM expected. We'll see Industrial Production at 9:15AM, as well as Capacity Utilization. Isn't it interesting how quickly those stimmy checks made it to families, and then went straight out the door? So, no what? We're gonna need another stimmy cheque asap!
After some light weakness to end the trading day on Wednesday, followed by some further weakness in the overnight session, futures are skyrocketing higher on the positive data prints. As of 9AM, the S&P was trading up around 0.65% to 4,141.75, the Dow up 0.50% to 33,784, the Russell up 0.80% to 2,262.70, and the Nasdaq up 1% to 13,940.25.
Gold, Silver, Platinum, Copper, and Palladium, were all higher on the day, as the dollar burns to the ground on perpetual easy monetary policy, and "free money" fiscal policy.
The Vix is back near the post March crash lows, and is trading around 16.8 as of 9AM. We're seeing the most vicious decay in risk protection I've ever seen in my career. Risk is a bad word, and has seemingly been cancelled by Wall Street. Let's see how this progresses as Main Street lines up again with their hand out, for another round of stimmy cheques.
According to Goldman Sachs, “We are probably entering the last stage of the pricing of the growth acceleration, and we see encouraging signs suggesting the ‘reflationary’ environment can continue and be supportive for risky assets in the near term." This comes after Goldman, JP Morgan, and Wells Fargo posted stellar quarterly results. Wall Street is just loving this bail out. They're simply never held accountable for their actions and their systematiclly threatening and reckless derivatives behaviour.
European stocks were mixed this morning with the Dax up half a percent to 15,264, the CAC40 down 0.64% to 6,170, and the FTSE up 0.69% to 6,941. In Asia, the Nekkei 225 was up 0.36% to 29,718, while the Hang Seng was down by 0.30%, and the CSI was up by 0.78% to 4,979.60.
Considering we're sitting at the ATH's, it appears we're in for another day of sideways PA, with markets having no other option but to catch all that free money, and levitate yet again. Stay patient as the ponzi nears the end, and free money begins to put pressure on the Fed to hike rates sooner than "expected".
Our live analysis begins at 9:30AM! Cheers, Michael.
*I am/ we are currently holding positions in UVXY, HQD, QID.
US 10 Year Yield Impact on Value vs. Growth Dynamic
Here's a monthly chart of $IWD /$IWF (black line, rhs) and the US 10yr yield (orange, lhs) going back 15 years or so. The bottom panel here is the rolling 36month (aka 3yr) correlation between these two. As you can see, the rolling correlation currently sits at 0.88. While not quite as high as a few months ago, it seems clear that yields are still very much influencing the value vs. growth dynamic in equities.
BTC / Bond yeildsUS 10 yr yields and BTC. Seems when there is indication that yields are going to be rising, BTC moves up, while when yields drop BTC remains relatively flat. This makes total sense, but wanted to visualize it for myself. I wouldn't use this for anything except documentation.
IWM/M2 - Potential Head and Shoulders ReversalWith M2 up around 25% since last January, leading to higher equity inflows in the past 5 months, than in the past 12 years combined, price has become quite distorted. When you divide the indexes by M2, you'll notice that price action looks a lot more like it did pre QE days, when Fib retracements actually worked to indicate the strength of a "bounce". With the previous high showing us a solid rejection on the Russell (IWM), and with the S&P, and QQQ both showing potential tops with a 1.618 Fib test, and a double top formation, respectively, we could finally be seeing the last November like, face ripping rally to new ATH's. With long delta exposure in the 92.8th percentile, we're more than due for a correction. But, unfortunately, everyone is sitting on the same side of the boat, and is completely blind to risk. Just look at the Vix, no one wants risk protection right now. It's quite shocking to witness...
SPY is Within a Few Points of the 1.618 FibSPY is within a few points of the 1.618 Fib (over) extension. Are we finally seeing the top on SPY? Who wants to buy at these levels? With QQQ forming a possible double top, RSI's of 70 - 80 across multiple timeframes and indexes, everything and the moon priced in, we can't be far from a correction now. The question is, what happens when dumb money gets trapped at the ATH, and hold for the bounce that never comes...
