Why did I know that bond yields were going to fall?To obtain this information, we need to look at four things:
-Fed Rates: The Federal Reserve's interest rates decisions can have a significant impact on financial markets and the overall economy.
-US5Y (US 5-year Treasury bonds): Yields on US 5-year Treasury bonds are an important measure to assess market expectations for short-term interest rates and investor sentiment regarding the economy.
-US10Y (US 10-year Treasury bonds): Yields on US 10-year Treasury bonds are also a key benchmark to evaluate investor expectations for medium-term interest rates and market risk perception.
-US30Y (US 30-year Treasury bonds): Yields on US 30-year Treasury bonds provide insight into investors' long-term expectations for interest rates and confidence in long-term economic stability.
Monitoring these indicators can provide valuable information about the direction of interest rates, market sentiment, and the overall health of the economy.
If we observe these three together, we can see that the maximum point marked with a red rectangle, the US5Y, is the only one that violated that high. This suggests that the movement in the US5Y was a manipulation (liquidity pool), as none of the other bonds violated the high. Also, the DXY (US Dollar Index) did not violate it and has already created a lower low. This indicates that we can expect the completion of this move in the DXY and a more aggressive decline in bonds.
Us10yr_sell
ridethepig | US 10Y Yields (Weekly)Markets are focused on three topics this week: (i) The 4Q 2019 Earnings season, (ii) coronavirus spillover concerns and (iii) Sanders performance in Caucuses. In US Yields the picture is crystal clear on the Long-term chart, for those following the 1.50% support level we are tracking on the daily you will note where the strength in defence comes from in the medium term:
On the technical side the same levels to track:
Support : 1.50% / 1.45% / 1.32%
Resistance : 1.68% / 1.75% / 1.95%
In my books the impact of the virus is going to have a major impact on US GDP growth, tracking for 2% drag on Q1 growth. Chinese spending offshore is expected to drop by 0.6% (which is a conservative estimate). This is weighing on investor decision making as the impact will come through valuation changes rather than the earnings. If you are a believer in the virus having a short lived impact, then you can increase exposure on this dip in cyclicals and value companies. The industries hit hardest are airlines and travel with gaming to a lesser extent receiving a hit via Macao shutdowns.
All the best guys, and as usual thanks so much for keeping your support coming with likes, comments, charts, questions and etc!!
ridethepig | US 10Y Yields At SupportA quick update that I will try to keep relatively short for those charting the US10Y we have important updates after markets struggled to shake off risks from China. The support in Yields is starting to form a bullish basing pattern, although the medium term structure is weaker the immediate horizon looks strong and stable above the 1.50 line in the sand.
The bounce from 1.50% support was widely expected, here noting the key levels for our map:
Support : 1.50% / 1.45% / 1.32%
Resistance : 1.68% / 1.75% / 1.95%
What is typical of the big leagues, and this of course is no exception in US10Y which is where the biggest sharks are found, it is and will remain advanced playing fields for advanced swing traders only. Retail making use of the weekly close looking soft and betting on the continuation will provide the fuel for a spike as they cover and become trapped in a squeeze. Remember.. even when smart money appears to have a gun pointed at the head, it always finds the time to mass his troops in defence (now you see why this weekend was vital!!!!)... If you are keen to learn, you should model yourself around these premises.
All the best guys, and as usual thanks so much for keeping your support coming with likes, comments, charts, questions and etc!!