US10Y Extremely overbought on Bearish Divergence. Sell longterm?The U.S. Government Bonds 10YR Yield (US10Y) is having the first red month (1M) after rising non-stop since May. It has been on extremely overbought levels for the last 12 months as the price established itself above the multi-decade Bearish Megaphone pattern, the same way it was oversold below it following the March 2020 COVID crash. As you know the price quickly corrected back inside the Bearish Megaphone in a pure technical harmonization process of the extreme levels.
Technically it should follow a similar reversal now again, as the most important technical development of the year is October's Lower Highs formation on the 1M RSI. This is a huge Bearish Divergence as the price during the same period is trading on Higher Highs. The same kind of Bearish Divergence has only been spotted another two times in the last +40 years. On both occasions, an aggressive decline started. As a result it is only natural to expect a 1M MA50 (blue trend-line) test before 2024 is over, which right now is a huge early sell signal.
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US10Y
US 10Y TREASURY: yields have peakedThe final breakthrough for the US Treasury yields was the latest FOMC meeting where the Fed decided not to increase further interest rates. Although, they are leaving the possibility for further hikes in case that inflation remains persistent, still, the market perceived it as the end of the Fed's rate hikes.
At the beginning of the week, the 10Y US Treasuries tried for one more time to test the 5.0% level, reaching only 4.92%. There was clearly no market strength to push the yields further to the upside. After the Fed's meeting, yields dropped to the level of 4.6%, while after the Friday`s jobs data, yields ended the week at the level of 4.57%. There is still space for yields to relax and move to the downside. Actually the level which is currently pending testing is 4.4%, which might be tested during the week ahead. Further supporting level stands at 4.0%, but currently there is no clear indication on charts that it might be tested in the week ahead. Evidently, the yields started their reversal path, and they will certainly not return back to the previous levels around 5.0%.
US10Y - Is it a "sea change" or a strong buy for TLT and TMF ?In December 2022, Howard Marks told in an interview that a "sea change" is underway in markets.
When I have seen below charts of TVC:US10Y , I have remembered that interview:
(Unfortunately I needed to remove the graph due to lacking reputation points. Maybe you can view with //x/HZKlWa8U )
TVC:US10Y was in a downtrend in a channel since 1980 and this long lasting channel has been broken at April 2022, and upper line of the channel became support at July and August of 2022. So there are some signs that it's not a fake going out of channel like the one in 2020 March.
Does Howard Marks right by saying it's a "sea change" ?
And in this weekly chart of TVC:US10Y , we can see it has formed a new uptrend in a new channel:
(Maybe you can view the chart with /x/DHeM0t8W )
See how good it has used that upmoving support. Now, we are again hitting that support and if that support line is broken, it would be a "strong buy" for NASDAQ:TLT and AMEX:TMF .
Both graphs have given bullish divergence recently:
(Maybe you can view the charts with /x/2jGkJkCJ and /x/5NGqJ3Ze )
This week we will see if TVC:US10Y will break the channel and confirm the bullish divergence of TLT and TMF. If the support would been broken at TVC:US10Y , then 4.20 and 3.40 and 2.75 are the levels to watch for the bullish trend of NASDAQ:TLT and $AMEX:TMF.
In conclusion, if TVC:US10Y will break the channel this week, I'm long in NASDAQ:TLT and $AMEX:TMF.
If not, we will keep watching if Howard Marks was right and it's really a sea change.
US10Y ~ November TA Outlook (Weekly Chart)TVC:US10Y chart mapping/analysis.
US10Y getting dumped off combination FOMC decision, US economic data + US Treasuries update triggering institutional short covering.
Bond & equities market squeezed higher, in-line with seasonality.
Possible bearish H&S in development on lower timeframe, pending pattern confirmation.
SPX | Balance of PowerNot all is equal. And nothing is static.
Entropy is the foundation of our world, and it is the bane of a rich man's existence.
You collect in one spot, then nature comes up and spreads your work around.
Entropy is the unbeatable power of justice. In the end entropy always wins.
One has limited amount of time to temporary evade it.
Panta Rhei - Heraclitus
Everything flows. Money just like water, tends to move around. It is what it is meant to do.
Rich men need poor ones to collect from. In the end, there is nothing else to collect from the poorer ones. But the cycle must continue. No rich man could ever possibly give out wealth for free. Instead, they let nature do its trick and rebalance things.
I will now try to make a rough model of the changes in markets. Divide markets in distinct periods so as to have a better understanding on the progress of a bull market.
Energy Conservation
Money and entropy tend to spread out. When the stock market was "invented", few had the stocks and many had the money. Trading is a way to manipulate entropy to our advantage. We let nature spread what we don't need, and as a repayment we accumulate what we need. The stock market is like a free energy machine .
The invention of the stock market resulted in a massive wealth transfer, and ended with a painful crash; The Great Depression. The peak of the Roaring '20s was the peak of wealth accumulation from the few.
In the post-Great-Depression economy, money spread out again. From the few to the many.
In these decades, DJI (the big 30) stagnated while SPX (the 500) progressively got stronger.
But the big-30 had an ace up their sleve.
In trading the game must always go on. There is always a way to get richer.
And so, commodities became the new place for wealth to accumulate to.
From all of the above we have come to realize that bubble tops come when the few have accumulated the maximum possible from the many. DJI/SPX measures oligarchy, while the inverse SPX/DJI measures democracy in the spread of wealth in stocks.
Many bubbles and many crashes have followed after the Great Depression. The .com bubble crash and the GFC are memorable to young and old alike. And they all exhibit the same base structure. It is all the same, with one crucial difference.
The 2020 economy is vastly different from the 1920 economy.
The role of SPX and DJI has changed in the last few decades. DJI used to represent the companies that shaped bubbles and SPX the ones that followed. Now NDX and SPX are the indices that represent fast growth while DJI has taken the role of the "index of stability".
The modern balance-of-power measure is the following:
SPX-equal-weight divided by SPX-market-cap.
www.tradingview.com
Since I couldn't find an SPX-equal-weight index in TradingView, I have constructed a similar chart using two ETFs, RSP and IVV. The RSP/IVV chart is a good analogue to the standard chart.
And so, where do we conclude?
After much analysis we can say the following in retrospect.
The 2008 bubble was quick but with big repercussions.
Money democracy shows signs of impeding financial weakness.
And as for the post-2009 Bull Market...
We realize that it progressively turns into a bubble. While there is no definitive way to "normalize" SPX, SPX/M2SL proves a good candidate for absolute SPX cost.
Yield rates tell many tales.
Usually yield rates increase as the wide economy needs them. Strong economies need a lot of money and they can withstand high yield rates. And contrary to popular belief, yield rates are positively correlated with yield rates. Now however, the wide economy refuses to absorb such high yield rates. High production cost and high rates can destabilize the economy.
Money Democracy is Positively Correlated to Yield Rates.
Now we witness the wide economy refuse to absorb these yields.
This has resulted in unprecedented wealth accumulation from the few.
Speculation Chart:
While this type of analysis is subjective, it is interesting to see patterns repeat.
Composite Chart:
An experimental chart attempts to calculate the scale of the derivative bubble we are in.
We realize that equity prices are now lying. They are simply too inflated and riddled with derivatives to believe in.
All of that was quite complex to follow through, and even harder to make a conclusion.
In the end, the simplest analysis might be the best.
A massive bearish upward channel has formed. Now price has rejected once again off the ceiling. The real recession may have not even started yet...
Tread lightly, for this is hallowed ground.
-Father Grigori
Bonus Charts:
Have we reached a golden ceiling?
US 10Y TREASURY: waiting FOMCThe US Treasury yields eased a bit during the previous week, as inflation data are showing further relaxation in inflation figures. The 10Y US benchmark tested 5.0% level at the start of the previous week, however, the week ended at level of 4.83%. The FOMC meeting is scheduled for November 1st, but current expectations are that the Fed will not further increase interest rates due to the latest posted inflation figures. However, Fed Chair Powell's statement after the meeting will be closely watched, which might bring some volatility back in Treasury yields.
The 10Y Treasury yields will start the week ahead by testing 4.8% level. At this point on charts, there is no indication that yields have opted to return to the levels of 5.0% and above, in which sense, some further relaxation to the downside is probable. In this case, 4.6% might be a probable target and a short stop on the road toward 4.4% in the weeks to come.
Raising Rates Here Will Blow Japan Up. Blowing Up US Yields
Up coming Federal Reserve meeting, there's still underlying inflation in the USA but the amount of interest on debt + Japan buying US debt while their currency is almost completely free falling.
Would be one of the worst fiscal policy disasters since 2009.
Looking at Japan's society they're completely clueless of how close they are to blowing up.
US10Y: Channel Up intact but first time on a Bearish Divergence.US10Y continues to rise inside a long term Channel Up, with its 1D technical outlook bullish (RSI = 57.618, MACD = 29.942, MACD = 0.116). The 1D RSI though is for the first time in the recent months under a LH bearish divergence so for the first time the probabilities for a bearish reversal get stronger. Consequently, if the price crosses under the Channel's bottom, we will see and target the 1D MA50 (TP = 4.600). Until then, we will but on the first 1D candle that closes under the S1 level, aiming at a +10.70% rise (TP = 5.185).
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EURO VS U.S. DOLLAR. TO LOW, OR NOT TO LOW. THIS IS THE QUESTIONThis publication is for Euro against U.S. dollar, and quick and simple as well as all other publications by @Pandorra
2023 is about the end, so let's take a look on technical perspectives for FX:EURUSD .
The main graph is EURUSD semi-annual 6-month chart (yes, they also exist on TradingView, as well as quarterly 3-month charts and annual 12-month charts).
EURUSD is being concentrated on multi year floor, with lowest levels at semi-annual close around 1.05 (actual again in this time).
Well, recently being inspired with finding NASDAQ:TLT multi year floor, I guess that breaking down the 1.05 floor in EURUSD can turn the price much and much lower.
Maybe to 1.6 Euro for 1 U.S. Dollar somewhere in mid or late 2020s, or early 2030s.
Patience.. Patience.. and once again Patience..
The Time will show.
#US10Y Yields perhaps a little extended here short term?Got to be brave trying to run infront of this steamroller, but we are starting to see signs of bearish divergence where price(yield) is making higher highs, not confirmed by the RSI and MACD which are currently making lower highs. This could be warning of a short term reprieve in yields which could be bullish risk assets. However, given the current environment with conflict in the middle east, one has to becareful
US 10 YEAR YIELDS (UPDATE)🚀Despite hitting our target, the US10Y has kept pushing much higher due to economic uncertainty. Biden has requested for an extra $100 billion in Congress to fund the Russia & Ukraine war, to give money to Taiwan & more money to Israel, to carry on their genocide against Palestine.
If this $100 billion is approved, then we can expect Bond prices to carry on crashing, while the US10Y keeps reaching new highs.
How the Fed affects long Bond YieldsInverse chart of US10Y Yield to show changes in Bond prices.
Overlayed with the following:
Fed Funds Rate
US Treasury Deposits to Federal Reserve Banks
Increase/Decrease Rate of change to Fed Balance Sheet
Balance Sheet Total in separate pane below
The USCBBS Percentage Change shows the money raining down :-D
It's clear to see the relationship between the Fed buying Treasuries, i.e. Quantitative Easing (QE) and the increase in US10Y prices.
Quantitative Tightening (QT) is the name of the game now. There is A LOT of QT left to do, we're at most 25% into QT since the Fed has only rolled off roughly 1Trillion. They likely have 3+ Trillion to go. Expect US10Y to be under continued pressure as long as QT is in effect. Even when Fed Funds rates are lowered it will have little effect on US10Y while the biggest buyer of Treasuries is on hiatus.
US 10Y TREASURY: has finally topped?It was a sort of game of nerves during the previous week, watching the US 10Y yields reach the level of 5%. This occurred for the first time after 2007, but the difference on charts was that no one was sure whether yields would stop at this level. It was such a strong push to the upside, after Fed Chair Powell's speech at the Economic Club of New York on Thursday. Although he said nothing new with respect to potential further rising of interest rates or inflation, still, the markets did not want to hear that jobs and economic growth need to suffer in order to bring the inflation down to 2%. Adding to it the developments within the Middle East crisis, the perfect storm occurred with US Treasuries.
Friday`s trading session brought some ease in 10Y Treasury yields, so they finished the week at the level of 4.91%. In case that they continue to ease in the week ahead, then the level of 4.80 might be the next stop for yields. However, in the case of any potential negative news which might bring yields to the higher grounds from 5%, it would certainly not be at all a good sign for the future prospectus for the US economy.
Bitcoin decopule with US10Y ? Where to look in bull cycle ?It has been commonly accepted that when yields and rates rise then higher risk assets should fall in value as money is tempted by yield returns
This relationship seems to be getting tested as Bitcoin and US10Y moves up together. It does give impression that bitcoin is not as risky as potentially imagined and can be seen as a flight to safety or "quality" to quote Fink.
If bitcoin continues then it is commonly accepted that it will lead out smaller caps in the cryptosphere
Its important to note that Bitcoin (on average) moves first. Why this is important is because it flies in the face of those who say Bitcoin will give less return then 'X' coin because in the very end X will ultimately move up more in % terms. However, if Bitcoin (on average) leads out the rest then the opportunity to reallocate lays mostly with those holding bitcoin. If you have to wait and watch as the rest of the market booms to see smallcap X coin eventually make its move.. then you have little chance of redistribution and any compounding. Whereas Bitcoin holders can take profit during btc move and redistribute into smallcap X coin pre its own breakout and essentially compound growth in that cycle.
Where after Bitcoin?
I believe that safe bets beyond Bitcoin that will move well post bitcoin runs are the sub sector monopolies within the cryptosphere. Coins that dominate their sector. Clear example is Uniswap's UNI.
US10Y Bearish Divergence tells us it may be time for correctionLast time we looked at the U.S. Government Bonds 10YR Yield (US10Y), it gave us a technical bounce and profitable buy signal (see chart below) as the Higher Lows trend-line held:
This time we get an opposite signal as the 1D RSI formed Lower Highs, while the price is on Higher Highs, which is a technical Bearish Divergence. The asset is still supported both by the 1D MA50 (blue trend-line) and the Higher Lows 3 trend-line since the May 04 Low.
Our strategy is to sell and target a price slightly above each Higher Lows trend-line, then re-sell if a 1D candle closes below that Higher Lows trend-line. Target 1 is 4.745, if a 1D candle closes below Higher Lows 1, we will re-sell and target 4.645 (expected contact with the 1D MA50). If Higher Lows 2 break, then re-sell and target 4.465 on Higher Lows 3 and a projected contact with the 1D MA100 (green trend-line).
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10Y & 30Y Yield losing more steamGOOD MORNING!
#interestrates look like they want to slow down a bit, short term top.
We see the 10Y & 30Y pulling back a bit...
But this is better seen intraday.
We'll see how that unfolds...
IF IT DOES, it could cause a sharp rise in #Stocks.
Coincidentally, DJ:DJI @ support & TVC:NDQ is near a major support.
TVC:TNX AMEX:DIA NASDAQ:QQQ
The bear steepener and when we will get our scripted eventWatch this curve because the market always knows, and the market isn't as free as many think. Gives us a sign when the true risk off kicks in. Might be due for a short relief soon, and then it starts. A potential bounce area is market as white, might not match and steepen now, but the breadth indicates that more likely than not we will get it in a matter of weeks now since we've technically broke out from the pattern.
Citizens Financial Group. Possible Upside on Q3'23 Earnings CallBond pressure...
Pushing' down on me,
Pressing' down on you,
No man ask for...
Technical graph says that possible upside with NYSE:CFG stocks could be possible, with projected/ targeted line at 52W SMA.
With 6.20% dividends yield, double-digit operating yield and P/B just at 0.6, NYSE:CFG securities can be considered as quite undervalued.
The protection level can be considered as multi months (6-, 12-months) low.
🐹 Caution To All TLT Hamsters - TBT Has More Room to DeliverTBT is a UltraShort 20+ Year Treasury ETF.
This Fund seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the Daily performance of the ICE U.S. Treasury 20+ Year Bond Index.
1. Always look first. Never rush into a trade or investment blindly.
2. Wait, and wait again, for the pattern to develop.
3. Be patient and use alerts to get notified when the time is right.
4. Measure trading ranges and adjust your plan for sideways action.
5. Look for bases and consolidations.
6. Zoom out and look for historical levels of support and resistance within those bases or consolidations.
7. Markets can go sideways longer than traders can stay solvent.
8. Adjust your stop loss and take profit targets for the choppy price action.
9. Be prepared for false breakouts and false breakdowns.
10. Choppy markets do not trade like trending markets.
Technical picture in AMEX:TBT indicates it has possibility to further upside price action, up to 57 - 60 U.S. dollars per share, as key multi year resistance (5-years simple MA) has been successfully broken at the end of 2022.
Long Term Yields catching a bidGood Afternoon!
Long Term #interestrates are PUMPING today!!!
The 10 & 30 Yr have been struggling in this area.
They are currently forming a negative divergence. We'll see how that goes.
3Month - 1Yr haven't moved much.
2Year #yield is also moving. This is "good"! That means that the normalization of yield curve is not happening yet.
#stocks #gold #silver