Get started

UVXY

Traders Cautious Ahead of Fed MeetingGlobal Futures are notably in the red on Wednesday ahead of the Fed's January FOMC rate decision. The US majors are trading down around 1%, with the Russell taking a beating, and down over 2%. European and Asian markets are leading the way lower, with the Dax down as much as 2.25%, and the Hang Seng down around 1.5%. Vix is being heavily bid as one might expect, we hit a high of 27.76 moments ago, and we're still looking strong at a 27 handle as we approach the open. The dollar (DXY) is breaking out again, and we're currently sitting above the descending trendline, just shy of the neckline on the IHS we've been observing lately. In rates, the 10Y yield continues to lose steam, as we approach the 50 day MA at .96%. We're currently sitting just below the 21 day EMA at 1%. The Put/Call ratio is a complete disaster with historical skewness being a concrete predictor, each trading day, of contiued complacency among investors. We're hovering around 44 in pre-market trade. Gold is down notably on the week, but holding onto recent gains - we're sitting at $1,842/oz as of 9AM. In Crypto, Bitcoin continues to take a beating, and we're back at 30K handle once again, with plenty of room to the downside. Ether is also down big on the week, and is down over 10% at $1,237. The volatility in the crypto space is very attractive, but trading with caution is the name of the game. SPY is set to open below the upper band of the white ascending channel, which should bring the 21 day EMA into play at 377.75. If this level is captured, we may see some support, just as we've seen each previous time the bears capture this key support. However, a clear break would put the bottom of the white channel back in play and the 50 day MA around 370. Thanks for your time today guys, I hope you enjoyed the analysis. It's shaping up to be an excited day of trade, so stay tuned as we disseminate the day's price action in our live daily play-by-play to begin shortly (link to the website in profile). Remember, expect the unexpected. Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
32
THE NEXT WAVE OF VOLATILITYMarket volume is drying up and we're seeing historic put:call ratio's on the indices. We have the necessary ingredients in the cake for a another wave of volatility to hit the market. Please see my previous post about the VIX and the compression patterns that often occur. Volatility tends to get bottled up and then erupt. We are likely in a bottling-up zone where fear is gone, and all is calm.. I suppose this can continue but I like to think we're nearing a volatility cycle low. I am of the opinion that the VIX is in a new, giant, price wedge. If you look at this chart, I think (a) will be tagged.. but perhaps it already has? I don't know. It could be now or it could be weeks from now. I'm speculating on the pattern some, but I will be looking to hedge my portfolio with long calls in volatility over the coming weeks.. and even months if necessary. I have learned to completely ignore mainstream news and focus entirely on the data. The math doesn't lie. People do. Something to think about- Let's pretend I'm right about this being a new, giant price wedge. If this forecast turns out to hold water, then the market is likely to go significantly higher over the next couple of years.. I don't want to even mention numbers because this could be a big pattern. Regardless, I'm looking for the next wave of volatility to come rolling in. I've been around long enough to know that the market can creep & creep for weeks or months before pivots. Timing a market top is extremely difficult so one must not be too biased or emotional. Another possibility: What if the VIX is already out of the cage? What if this isn't a new compression wedge? This pattern is my "optimistic" perspective for the markets.. It's possible that the vix could take off like a rocket to new highs where markets completely unravel. In time, the fundamentals WILL take over. I have no idea how much time we have.. all I can do is analyze the data.
TVC:VIX
by gghsusa
8
Referee!After a choppy day yesterday, which looked nothing like efficient price action to me, US Futures melted up from around 1AM. We saw some weakness earlier on in the session, but the losses were quickly reversed, just as they were in the cash market. We're currently trading near all-time high's once agian, as a busy earnings week continues with Microsoft and AMD reporting after the closing bell. European markets were notably higher this morning as well, after a rough day yesterday, with Asian markets trading mixed. What changed, why the reversal in sentiment today? Central Banks. After rallying hard yesterday, and hitting a 26 handle, Vix is back in the dumps with a 22 handle this morning. The name of the game is crush volatility at all costs, and whatever happens to price action, and price discovery as a result, is nobody's problem. The dollar caught a bid yesterday and briefly broke above the longterm descending trendline, but we saw another solid rejection with conviction. We also saw the 10Y Treasury yield tank back to the 21 day EMA level (1.05%), after a strong 2Y auction saw $60 Billion in paper trade at a low yield of 0.125%. Gold remains relatively flat at $1,855/oz, and crypto is taking a beating with Bitcoin back at a $31k handle, and Ether down 10% to $1,275. We'll see Consumer Confidence roll in around 10AM, which should give us a better sense of how Main Street is feeling after what I expect was a busy and expensive Christmas shopping season. SPY is set to open at the top of the recent range, and has yet again, blown out all of the resistance levels sitting overhead. These overnight gap ups, while everyone is asleep, seem so one sided to me. If this was a game, and everytime the other team scored, the referee sent them to the bench to sleep, so the other team could score, we simply wouldn't watch that game. Well, welcome to the markets, and let's all hope this insane ponzi ends soon so we can go back to the game we all love so much. Having said that, we are at the top of the range again, and at the ATH, so I expect to see further selling today, off the back of yesterday's negative sentiment, and volatility. Let's see how the cookie crumbles today. As I've said before, the only way to prepare for trading this market, is to expect the unexpected. Thanks for your time today guys, I hope you enjoyed the analysis. Stay tuned for our live play-by-play to begin shortly! Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
12
Monday Morning Market BriefGlobal futures traded mixed on Monday morning to kick-off a busy earnings week, with over 100 companies in the S&P, and 13 in the DOW releasing earnings. We'll see the latest figures from Tesla, Apple, Microsoft, Caterpillar, and 3M to name a few. According to John Butters at FactSet, "In aggregate, companies are reporting earnings that are 22.4% above estimates, which is also above the 5-year average of 6.3%." Goldman's chief equity strategist, David Kostin, said, "On an absolute basis there is no doubt that valuations are extremely elevated. The index trades at the upper end of the historical range when measured using a variety of metrics, including P/E, P/B, EV/sales, EV/EBITDA, and market cap/GDP. These measures point to equity valuation ranking in the 96th historical percentile." He also mentioned that with low yields present, and the base case being no change in yields for at least a couple years, we may see continued support for higher equity valuations this year. The positive sentiment that we're seeing in the Nasdaq, which is currently trading up around 1% pre-market, hasn't yet spilled over into the S&P, Dow, or Russell, as they continue to trade flat. Asian markets were mixed, and European markets traded notably in the red, with the DAX, CAC40, and FTSE 100, trading down around 1.5%. Many european nations remain under strict lockdown, which is putting continued pressure on sentiment, and of course equity valuations. Vix caught a notable bid overnight, and is up around 7% to start the week. We're sitting at a 23 handle, and the ascending support trendline we've observed since December is maintaining it's integrity, for now. The dollar is trading off it's recent high's but is still showing strength just below the longterm descending resistance trendline - the DXY is sitting at 90.30 to start the week. The 10Y yield is breking out of it's flag formation, and to the downside. After hitting it's highest level since March 2020 a couple weeks ago, we're slowly cooling off towards the 21 day EMA, and 50 day MA sitting at 1.045%, and 0.957% respectively. Gold is looking awfully toppy ($1,864.59) on the monthy timeframe, and considering the fact that crypto is clearly the new favorite hedge on Main Street, it's no wonder why we're seeing pressure in more traditional hedges like the metals. Bitcoin is up about 6% on the day, and is back at a $34k handle. Ethereum hit a new ATH today at $1,475, but is cooling off a bit as we approach the open. The Put/Call ratio continues to look like a cruel joke. We've been at historically low levels for 8 months straight, and we're sitting around 50 as of this morning. That's not a skew in sentiment, that's manipulation, and imo it's not going to end well for greedy investors piling into risk at all-time high's. Finally, SPY is set to open near all-time high's, and is currently floating in orbit, above all technicals essentially. The upper band of the white channel is still in play, followed by a suite of MA supports between 380 and the top of the megaphone around 361. The key level I'm watching today is the 21 day EMA (376.43), for an indication of a change in the daily trend. The bears would need to recapture this level with conviction, and hold the line into the close. Having said that, we're living in La La Land right now, where price action leads sentiment, and Jerome Powell's favorite game is Ctrl + P. Expect the unexpected. Thanks for your time today guys, and I hope you enjoyed the analysis. If you'd like to follow our live play-by-play of markets, come visit us over at the Hedge of the World website. You can find the link in our profile. Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
10
Global Futures Taking a Beating on FridayHappy Friday, everyone! Global futures are taking a beating on Friday, as lockdowns in Hong Kong, Germany, UK, and across the euro area, tightened further. Traders have been on an absolutely ridiculous risk binge since November (really since March 2020), running straight towards a cliff, and are waking up today to realize they may be on the wrong side of risk. The ECB made mention in their latest statement, that the euro area could be heading for another recession this year. Imo it would be next to impossible for most G20 nations not to take a GDP hit this year, with much the world on lockdown, and the real economy of many of these nations hemorrhaging productivity. Bitcoin continues it's sharp repricing after hitting a recent high of over $40k. We're now back to a $32k handle, after falling as low as a $29k handle in the overnight session. Treasury yields are holding on to recent gains, and the 10Y yield is still hovering around 1.09%. The dollar is holding on to it's recent gains, and seems to be finding some interim support at a 90 handle. We're still watching the neckline just above, along with the descending resistance trendline for indications of a break out. Vix is catching a strong bid this morning, and hit a pre-market high of 23.73, after being hammered back to post March lows yesterday on a more orderly inauguration than expected. Gold is getting smacked again, and is down around 1.28% to $1,841 an ounce. As we mentioned yesterday, we're looking at overbought levels on almost every timeframe across the majors. The QQQ showed an RSI of over 80 yesterday, with the SPY showing an RSI of over 70. The russell is sitting about 25% above it's 200 day MA, which is presenting one of many fantastic opportunities for traders to profit off a potential imminent market-wide correction. After hitting new ATH's this week, key levels to watch on SPY today are the 50MA (h) around 380, which is converging with the upper band of the white channel, and also the 21 day EMA at 375.79. Then, the bottom of the white channel around 368.12 could be in play, where the 50 day MA is also sitting. It's been a while since we mentioned the megaphone pattern, but it's sitting around 361, and based on this morning's price action, it looks like the bulls may lose this important support very soon. As always, I appreciate your time today guys, and I hope you enjoyed the analysis. If you're interested in our live play-by-play, come join us over at the Hedge of the World website (link in profile). Cheers, Michael. *I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
2
Bulls High as a Kite on OptimismUS Futures drifted higher in the overnight session, with the S&P hitting a fresh all-time high of 3,859.62. We saw continued weakness in the labour market this morning, with jobless claims coming in higher than expected (exp 845k) at 900k, and over 5MM continuing claims persist. Not that the labour market has anything to do with this super cool new MMT economy. But, I figured I'd mention it nevertheless. Vix saw it's key ascending trendline break for the first time in almost 8 weeks. This may come as a surprise to many volatility traders, but as we mentioned in our live analysis yesterday, the Vix contract rolled over, and absent any negative inauguration outcomes, which was always unlikely given the incredible military presence in washington, there was potential for VIX to be sold off similar to what we saw in November. So said, so done. I'll be watching Vix closely today to see if we get support at the post March crash low, and then potentially accumulating more UVXY sub 10's. Risk protection is cheap in my opinion, and stocks are not just overvalued, that would be one thing. But, stocks are at all-time high's, with the QQQ's hourly RSI just below 85. That's extremely overbought folks. I've been looking at the Bollinger Bands a lot more lately, and I've noticed that in many cases, in the past week or two, we've seen a standard deviation of up to 3, struggle to contain the euphoric price action. This isn't going to last forever, as we all know, and so I will continue to position for the worst case scenario, and I won't let greed overwhelm my investing and trading principles. Key levels to watch on SPY today are the all-time high, of course, near the green ascending trendline around 386, the upper band of the white channel around 380, and the 21 day EMA around 375. I'm keeping an eye on the dollar as well, as we've been expecting a breakout off the back of a potential inverse HS pattern, which could be about to materialize. This would coincide with a rise in yields, which should also see the 10Y yield breakout to the 1.25% - 1.41% range. As always, I appreciate your time today guys, and I hope you enjoyed the analysis. Cheers, Michael. *I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
12
Spy Near All-time High's, Again...It was another gap up overnight (shocking), and like most of you, I'm starting to wonder if markets will ever function normally again. Yesterday, we saw freakish price action in the afternoon session, as markets flat-lined from about 1PM onward. It's been a long time since I saw candlesticks look like a line chart in the open cash market. But, here we are again, my friends, with another gap up overnight, on zero market participation, zero price discovery, and zero logic. The reality is, Biden's pick for Treasury Secretary, Janet Yellen, in her speech yesterday, mentioned the need to take advantage of low interest rates, and not focus on the national debt at this time. The example to households is clear: don't use the free money we created out of thin air to pay off debt, go spend it because interest rates are low, and you don't have to worry about the debt, or even jobs, maybe ever again. Needless to say, I disagree, and I think this is shaping up to be the biggest debt trap of all time. Bank stocks continue to rake in obscene profits as earnings roll in, while Main Street suffers from perpetual lockdowns, and an ever-evolving economic catastrophy. Governments all over the globe are looking to World Bank, IMF, and other large central banks for help, and are being handed a list of orders to abide by, if they want to be awarded the necessary relief funds. In other words, and let me form this as a question, why are banks influencing countries all over the world to enforce lockdowns? And how is it, that while we all suffer, the banks, along with a handful of "lucky" tech giants, reap all the rewards? *Bangs head on wall* SPY is back near all-time high's, and we're poised to open above the upper band of the white channel. Bears never got a chance to defend some of the key levels that were captured last week, as the never ending overnight gaps continue sneaking up to distort price discovery. The Vix contract rolled over so we'll potentially see some selling of risk protection, as investors digest the inauguration, and the most likely scenario, which is that everything goes according to plan. People don't like to think about bad things happening, so they often underestimate the likelyhood of them occuring. However, when we're all being treated like animals in a cage, there isn't much we can actually do to change the course of the future. I hope in the near future, our trust, confidence, and belief that logic will prevail in the end, will help maintain our sanity, and give us the strength to continue to fight back against the pain and suffering we're observing, each and every day. I wish Biden and his Administration luck, and I hope for all our sakes, he knows what he's doing. Key SPY levels to watch today are the all-time high, as I suspect bulls will be testing this level early on in the session in irrationally exuberant fashion, and then the upper band of the white channel (379.50), once again if we see a rejection. We're also watching the 21 day EMA at 374.65. Thanks for your time today guys, don't forget to head over to the Hedge of the World webste for our live daily play-by-play of markets. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
38
Vix Continues to Look ResilientWe're consistently making higher lows, and I suspect this time is no different. Maybe it's just me, but Vix looks incredibly cheap, considering the fact that half of America's GDP has just been replaced with a printer. We're going to run into the long-term descending (green dotted) trendline soon, and Vix will explode. The current policy path is not sustainable, and if Vix is indicating accumulation from institutional (smart) money, then that's what I'm buying. I'm currently holding UVXY, and HUV, along with a couple Nasdaq shorts. I'm paying out the ass in premiums, but I'm working my position so I don't miss the main event. This next "correction" is going to be epic. If anything changes with my positions, or outlook, I'll post an update here for you guys immediately. Cheers! Michael. PS Don't forget to check out the Hedge of the World website for our live daily play-by-play of markets.
TVC:VIXLong
by Hedge_Of_The_World
23
Futures Soar on Inauguration EveAfter Friday's volatile options expiry, global futures are surging (after a somewhat muted MLK day), erasing most of Friday's losses as investors found more risk appetite. This was off the back of a potential dovish speech from Biden's pick for Treasury Secretary, Janet Yellen, who is scheduled to speak at 10AM this morning. Asian stocks were notably higher, while European shares traded relatively mixed. After breaking above the neckline, and seeing a strong break above the long-term descending trendline, the Dollar saw a notable rejection yesterday, and is now trading below these key resistance levels, around 90.43. The 10Y yield remains elevated this morning, and is sitting around 1.107%, with strong support at the 50 day MA (0.94%). We could see some big moves in treasuries today off the back of Yellen's remarks, asthey could help indicate the near term trajectory of the dollar, as well as rates. Gold is off it's Friday lows, and is up around half a percent. We're now sitting at $1,838, while Bitcoin hovers around 37k. Ethereum is up over 12% today, as investors continue to diversify their crypto portfolios beyond Bitcoin. SPY is back at the key 378 level in pre-market trade, which puts us just above the 21EMA (h), as we approach the cash open. The overnight gap ups have seemingly become the market's new constitution, and while we're all asleep at night, dreaming about a day when politicians and tech titans finally leave us the hell alone, markets melt higher, crushing volatility, and price discovery in the process. I expect to see resistance at the 378 level today, (green horizontal line), which is support turned resistance, as of Friday. The bears job today will be to defend the 21EMA (h), and recapture the 100MA (h) around 375.25. If the bulls take advantage of the gap and bullish sentiment, they'll be aiming to recapture the upper band of the white ascending channel, now sitting around 379.50. Vix is back at a 22 handle off the back of the irrational overnight exuberance. But, the ascending trendline just below us continues to hold up against market maker and central bank forces, dead set on crushing volatility. In other news, Goldman Sachs followed JP Morgan's lead, and smashed rev and profit expectations this morning, nearly doubling their quarterly profit vs a year ago to $4.5 Billion. Anyone still confused who the primary beneficiaries are from all this "stimulus" and "liquidity"? Hint: It's not Main Street. Lastly, will Trump pardon Assange and/or Edward Snowden in his final day in office? Needless to say, this is going to be a crazy weel folks. Buckle up! Thanks for your time today guys! If you enjoyed the analysis, please head on over to the Hedge of the World website for our live daily play-by-play. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
5
Global Futures Point to an Ugly Friday SessionGlobal Futures traded lower on Friday morning, as Biden's "rescue" proposal disappointed investors, as it fell short of infinity at $1.9 Trillion. When that $1,400 is spent in a month, what next? Chair Powell mentioned yesterday that there was a possibility of rate hikes in the future and a tightening of monetary policy (room for a change in policy), but that it might not happen for a few years. Regardless, yields spiked on the remarks, and continued to rally into yesterday's close, with the 10Y yield now sitting around 1.09%, after testing a session high of around 1.135%. The dollar continues it's march higher, with the Inverse HS pattern, looking like a real possibility in the near term. We'll be keeping a close eye on the dollar and the 10Y yield. SPY is off the overnight lows, but is poised to open below the key 21EMA on the hourly, and also the 50MA (h). Our first target, should we see further downside today, is the 100MA (h) around 374.72, then the 21 day EMA at 373.37. If we lose the 21 day EMA, the lower band of the white ascending channel is in play (368), with the top of the Megaphone sitting just below, around 361. Vix is back at a 24 handle, and refuses to break below it's ascending trendline, now sitting around 21.60. We tested these levels yesterday, before a notable spike in vol into the close. Retail sales came in weaker than expected this morning, with a -0.7% print, and Retail Sales ex-auto, coming in at -1.4%. This is off the back of weak restaurant spending due to lockdowns, and a drop in online spending. Capacity utilization is still high at 74.5%, which is shocking to me. The government/FED must be picking up half the productivity tab. Gold is tanking as crypto becomes the new favorite hedge against inflation, and continued whacky monetary policy. However, Bitcoin is still notably off it's high's, and is now sitting around 37K. In other news, JP Morgan saw an approx. 40% increase in profit in the last quarter. No big surprise there, as Wall Street has been the primary beneficiary from this entire spending, and printing binge. I suspect we'll continue to see bank earnings roll in, surprising to the upside. Thanks for your time today guys! If you enjoyed the analysis, please check out the Hedge of the World website for our live daily play-by-play of markets. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
34
Will More Stimulus Save the Economy?Futures traded sideways again in the overnight session, and have been stuck in a tight range since last week Friday, when we saw a nasty payrolls print. This morning's jobless claims came in ugly with 965K new claims, the highest level since August, and 5.271MM continuing claims, a rare rise from last weeks 5.072MM. Import and Export prices came in higher than expected at 0.9% vs 0.2% prior, and 1.1% vs. 0.7% prior, respectively. The Biden Administration will be releasing it's economic plan today, along with a new stimulus proposal, which is rumoured to be "in the Trillions." The "leaked" number is apparently $2 Trillion, which as far as I'm concerned may have a positive impact on sentiment, but is a drop in the GDP bucket. I have no doubt in my mind that unless inflation takes off like a rocket, we're going to see a massive disappointment in GDP. Perhaps the ultra-leveraged robinhood crowd will use this new money to take the S&P to 4000, where they'll have their hand out again for another round of stimulus. I've never seen institutionalized ponzi schemes like this before. But, hey, if the FED does it, why can't everyone, right? What a farce. SPY is sitting just above the 21EMA on the hourly, which has provided strong support over the past week or so, but it would appear that if the 378 level breaks, we may retest the lower band of the white channel, which is sitting around 368. That's my target for the end of the week, and I'll be watching Vix for signs of continued support at the lower ascending trendline, just as we saw yesterday after we fell to a 21 handle. Having said that, the all-time high is an arms length away, and with Biden about to drop a bombshell proposal with Trillions in free money, markets may very well make new high's before we see any notable correction. Risk protection has never been cheaper imo, so trade accordingly. Thanks for your time today guys! If you enjoyed the analysis, join us over at the Hedge of the World website (link in profile), for our live daily play-by-play of markets.
AMEX:SPYShort
by Hedge_Of_The_World
33
Futures Trade Sideways, FED in FocusIt's impeachment day 2.0! US futures continue to drift sideways as Vix and the dollar hold on to a 23, and 90 handle respectively. CPI came in at 0.4%, with Core CPI rising 0.1%. Investors will be on the look out for the FED's Beige Book at 2PM, which should give an indication on future monetary policy, and may even firm up some rumours of future rate hikes off the back of rising yields. YCC could be in focus as the 10Y yield rips higher, however, we did see a strong auction yesterday with $38 Billion in demand, which sent the yield back toward the 1.11% level. We'll be watching the 30Y bond auction today for indications of long dated bond demand, which could also have an immediate impact on rates. With the US potentially planning on going even deeper in debt with the incoming Biden Administration, supply is also in focus, as increased auction frequency and size, could also drive yields higher. Gold continues to show weakness, but is nearing overbought levels, like most all assets on the planet, with a monthly RSI of 64. Bitcoin and the crypto space bounced back notably from the weekly low, but Bitcoin caught some resistance around 36k. We're now sitting around 35k. The US House of Representatives will vote to impeach Trump, again, with the "debate" set to begin shortly, and voting to be wrapped up by 5PM this afternoon. It would then need to go to the senate for approval. SPY is trading in a relatively tight range, between 378 and 380. Barring a breach of the upper band of the white channel, we're going to continue to trade sideways. If we see a break above 380 again, the bulls may use the momentum to take us back to the ascending trendline in green, which is now sitting around 383.50. Trade accordingly. Thanks for you time today guys, if you're interested in our live daily play-by-play, please join us over at the Hedge of the World website. You can find the link on my profile. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
2
Futures Flat, Rates up to BatUS futures traded sideways in the overnight session, as investors took in the view, and breathed in the thin air from the top of Mount Everest. We saw a light sell off yesterday, which was relentlessly bought into, and the moral of the story was this: bulls were able to successfully defend the 21EMA on the hourly at the open, throughout the day, and again at the close. The status quo projection by market participants, is that the Biden Administration is about to release a colossal stimulus proposal, which could potentially make the recent one seem like a weekly allowance. The truth is, Biden previously said he plans to raise taxes, and may even implement a wealth tax to fund much of his incredibly expensive plans. But, how does that make any sense if he plans to also cheer on the FED as they continue to debase the dollar, while growing the fiscal deficit even further? Why tax anyone, ever again, if you can just print new money constantly, and borrow even more if need be? European markets traded down in the overnight session, as many european nations continue to struggle with COVID-19, and the effects of lockdowns on the economy. Bitcoin bounced back immensely from a 32K handle back to 36k, no surprise there. The 10Y yield is skyrocketing (seemingly unnoticed), and hit a high of 1.175% overnight. We've discussed what the implications of this move might be, and where rates may be heading next. For those of you who haven't been following, the 10Y yield is now up 130% since the beginning of August. Having said that, there's a possibiliy the FED may continue to change the rules of the game, and institute yield curve control (YCC) in the near future, to continue to artificially suppress rates. The mere fact that everything they've done to this point, hasn't worked, is no surprise to me. How could they have solved any (real) economic problems, when they're implementing solutions that simply aren't effective for main street? According to Nomura, CTA's could turn short US Treasuries at any moment, due to the fact that we've now breached the key 1.10% level. This would result in a market correction of about 20% according to analyst projections at Morgan Stanley. We've been seeing downward pressure in the bond market in recent months, as the mere mention of tapering asset purchases by members of the FED, spooked bond investors. The dollar has held onto a 90 handle overnight, but is seeing some pressure here as the base case remains to be further dollar debasement. Oil is rallying hard, and is back to 10 month high's as of this morning, and we're now back at a 53 handle. We may see some pressure in oil markets as the week progresses, due to the anticipation of shrinking demand, and Exxon apparently finding a new massive reserve in Guyana. Gold is looking awfully toppy, and we're seeing a clear reversal on the monthly candle, with both the MACD, and RSI rolling over. SPY is back at the 21EMA on the hourly, and looking weak as we approach the open. The weakness could be attributed to the circulation of a new report by Goldman discussing the rise in real rates, and it's potential impact on equity prices. Trade accordingly!
AMEX:SPYShort
by Hedge_Of_The_World
12
Next Stop on the 10Y Yield Train: 1.41%I've been hearing from many of my colleagues, most of whom are experienced traders, that rates are not going to rise anytime soon. 2023, 2024, 2025, all common projections for when rates will rise. Yet, we've observed the 10Y yield rising a whopping 120% since the beginning of August, to 1.13% today. Morgan Stanley said in a recent report, which I've mentioned in some of my other analysis, that the Nasdaq could be in for a 22% correction if the 10Y hits 2%. If the prospect of rising rates doesn't have traders and investors hedging their risk, nothing will. Trade accordingly.
TVC:US10YLong
by Hedge_Of_The_World
24