US10Y - US02Y = Crash ZoneCrash Zone highlighted in Red. Fair warning is given as well; "Sell Sell Sell"
Us10y-us2y
📊US10Y: probable fall📊 The yield on 10-year US bonds has increased by 105% since February of this year. During this time, market participants have paid special attention to the level of 2.74%, that currently acts as the main support. The current trend towards the strengthening of the US dollar would continue to put pressure on the yield on US 10-year bonds and on the economy as a whole. The spread between 2-year and 10-year bonds adds more fuel to the fire. The yield on 2-year bonds is higher than on 10-year bonds:
This graph shows clear signs of a recession, which is no longer in doubt. All signs of the deepest crisis on the face.
☝️ It is necessary to remember:
🔴 In a favorable economic situation, the yield curve has a convex shape, namely, short rates are lower than long ones, that reflects the positive economic expectations of the market❗️
🔴 Inversion - when short is higher than long - this is a signal of an impending recession, but this type usually does not last long❗️
🔴 A flat curve indicates that the market sees hopeless stagnation, which is what we are actually seeing now❗️
Technical analysis speaks more in favor of sales than longs: the right shoulder of the "head and shoulders" reversal pattern is being formed, the base of this model is just the same at the level of 2.74% mentioned earlier. The final moment in this "sell history" is the breaking of the Moving Average down, which indicates the beginning of at least a downward correction. Prospects for downward movement are at the level of 2.39%.
In any case, an alternative scenario assumes a pause in growth, but a downward correction is more likely, that may be less than the declared movement according to the main scenario.
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Tut Tut - US10Y-US2Y rises to highest in 3 yearsCurve Steepening is alive and well as the basis point difference between the US 10-year bonds and the US 2-year bonds reaches its highest level since 2017. This largely due to the Fed purchasing of shorter term bonds every month as part of its QE program to support the economy. Expect this trend to continue as the Fed maintains its support and refrains from purchasing longer dated bonds. However, should the Fed announce they are now going to purchase longer dated bonds, then a quick reversal is on the cards.
Yield curve 10's and 2's - uninvertingI wouldn't be long any stock market index from here. Long PM's gold and silver with silver overweight. *Not financial advice just opinion*.
US2y to stay below 1.500The chart patterns indicated that the US2Y yield is going to break and stay below 1.500.
The implications are that the spread (or difference) between US10Y minus US2Y is getting smaller. This, in turn, is suggesting reversion or a correction in US Indices towards the mean
You can see the initial chart pattern A, which led to the corresponding drop to point 1, and chart pattern B, which led to drop point 2
I think the US2Y will hold at 1.418 and then fall to 1.365 as the maximum potential drop
