Ustreasuries
Is it Time to Short Bonds and Long Stocks? With TLT at nosebleed heights the question obviously becomes, is it time to switch into equities yet?
As you can see TLT (red line) reaches fever pitch levels almost always at excellent entry points into equities, going back all the way to the GFC this has held true.
TLT for what it's worth is also extremely extended, driven to these heights on trade fears, slowing growth and a litany of over issues including the abundance of negative yielding debt, leading to increased interest in US treasuries.
But as traders we all know that nothing can go in one direction forever, what goes up must come down.
Stocks for their part look to be in 'hurry up and wait' mode, the September FOMC meeting will likely be the catalyst for the next move (both for stocks and bonds). If the fed provides the desired outlook (or direct rate cuts) that equities want then stocks will be the place to be, bonds too will benefit from lower rates (premium wise that is), but the liquidity will undoubtedly support higher equities.
Until the FOMC meeting, best to be cautious, but i for one would be careful about staying in bonds for too long.
Possible correctionThere are some important signs of correction scuch as new top formation and the price presence on steep slope of diagonal support line. The price existence in a pseudo symmetrical triangle is confirmed in also H1 and 30 min. I will be happy if you share your ideas in comments. Best regards
Eur-Usd, May 2019 = August 2015?Does anyone else see a simile with August 2015? In that month Usd-Cnh jumped from 6.20 to 6.60, S&P 500 -15%, copper -9%, and Eur-Usd has reached a gain of over 700 pips.
“China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China. Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically,” Hu Xijin, editor-in-chief of the Global Times, said in a tweet.
For the first time, I read about boycotting US government bonds. A taboo has been broken, which so far few have taken into consideration given that China is the largest holder of government bonds. We see that something is changing in this commonplace. We must recalibrate all the Chinese reaction function!
The markets are likely to be more frightened by this reference to government bonds than to 60bn of duties.
Treasuries Going Higher StillDespite the roller coaster in the stock markets, the treasuries could still be pricing in a contraction in the economy. The higher the 10 Year and 30 Year Treasury prices go, the lower the rates get on the longer end of the yield curve.
With the current setup in the US 30 Year T-Bond, there is support on the Minor Pivot Stack and the Monthly Pivot Range high. This is a setup I call an Almost Super Pivot Stack, which is higher probability trade setup.
There will need to be confirmation though, of enough strength to warrant a long position.
Hence, go long the March contract of the Ten Year Treasury if the price exceeds 146'01, then place your stop loss at 144'25 and a profit target at 148'22, for a good risk reward trade.
Use the CBOT contract, symbol USH2019, with any NFA registered U.S. futures broker, both regulated by the U.S. Commodity Futures Trading Commission.
TY1!: ABCB completion on structural multi-decade trendlineIn a world where bunds and JGBs are zero bound, why wouldn't 3% yield and an appreciating USD be attractive to global investors? There is a weekly ABCD completion in the TY1! on high volumes which coincides with a major multi-decade structural uptrend support. A break above 119.40 in the 240M chart would be confirmation. A long in the UST10 can be hedged off with a short in the ES1! where momentum is waning off.
COW / Live cattle 2018yr setupBased on US-T as well as "cash cow" yield rising in 2017/18 current draw in live cattle could be continue.
Looking forward to buy the dip in COW, time horizon - early summer.
US 10YR T-notes. Bear Flag. Sell on breakdownFED announced balance trimming.
The technicals perfectly match that decision (always a matter of disputes between tech analysts and macro analysts).
We got large correction before and broke below it.
Now the price made a perfect pullback to the broken line shaping my favorite Bear Flag pattern.
Watch to sell on breakdown.
US 10 year Bond yield / note .. preparing for fed hike ... Analysis of important data ametrics for 13 December fed rate hike based on fedwatch - fed funds futures - > www.cmegroup.com
COTs data used: non commercial long and short data as % of open interest ...
US 30yr T-Bonds Ideal EntryEntry plan is based on the US 30yr T-Bonds Topping Pattern .
Watching the fib retrace area for a high that would establish the right shoulder within the monthly head and shoulder pattern.
Quarterly bull cycle counts point towards a high during Q1 '18 which aligns with the monthly target of February '18. My trading account would welcome an earlier high with open arms but it's entirely up to the market.
Ideally I'd be able to hop in around $160-$161 after a rejection of that fib area and then ride the move down to my first target at $128 (2013 low). I'll probably take profit there and then go long back to the neckline of this pattern before the next move down to $89 (2000 major low). We still have awhile before we see price prepare to turn so this is a watch and wait.
My target reward:risk ratio is at least 5-6:1, again that depends on what price action appears.
I'll publish a more detailed plan as well as my entry if/when that time comes.
For more in depth analysis on this trade and others checkout my site, PatsTrades. Link is in my profile status box.
Thanks!
Sell the hell out of LT treasuries if we pullback to the meanOne of the most obvious trades out there. Pullback to mean would be KILLER value. Will be watching this closely and using Marty Armstrong's Socrates levels for confirmation.
There is certainly a chance we continue down further to that next support trend line before pulling back. In that instance we may see a H&S formation occur with the right shoulder at fib.
Treasuries/Gold Ratio 6/24/2016Watch the lines - this is the perception of long term Dollar value divided by Gold.
Treasuries/Gold Ratio 4/28/2016These lines help us see how quickly people are switching from Treasuries to Gold.