The Gold-Yield GapSince 2018, Gold has pretty closely tracked the inverted real yield on 10-year US Treasury bonds. Recently, however, a fairly large gap has opened between the two. Will gold close the gap with inverted bond yields, or vice versa?
Generally speaking, it looks like gold has led bonds for most of this period. That suggests that gold investors are a little quicker to react to news that might affect inflation expectations. Honestly you might be able to do pretty well for yourself by going long or short bond funds based on signals from the gold market.
Gold has weakened partly in reaction to US dollar strength in the first two months of 2021. The dollar index broke out of its downward wedge and looked like it might move higher:
There are signs of deflationary pressures on the dollar, including a couple recent overnight repo shortages of the sort we haven't seen since the early stages of the pandemic. The Fed has been responding to this pressure by growing its balance sheet and increasing bank reserves. Janet Yellen currently has plans to pump an additional $1 trillion into bank reserves. All of that's bearish for gold and bullish for the US dollar and bond yields.
However, there's some potentially game-changing news this morning: Congressional Democrats are talking about passing a $3 trillion jobs and infrastructure bill. A $3 trillion spending bill could significantly weaken the US dollar and could cause a nice bump in gold. With gold at a very significant support level, I think it's ripe for at least a short-term mean-reversion play, if not a swing all the way up to meet the inverted real yield line.
Long gold, long dollars, and short bonds is a potential way to play this until we've closed the gap.
Yield
CAKEBUSD Update! Still Bullish ;)Hey all,
Just an update as our previous setup was Stopped out by just a tick. Given that the Correction Channel is still valid, I am still bullish and have entered on this setup.
PLEASE manage your risk tightly here. This pair is extremely volatile.
ENTRY 1: 13.3 (already triggered)
ENTRY 2: 11.35
STOP LOSS: 9.88
TARGET 1: 25.25
TARGET 2: Trailing Stop
Happy Trading, always manage risk.
10YR about to pop.. again Possibly a wedge forming for this little consolidation day for the 10 year, seems like it doesn't want to really go lower.
I don't think that people are really expecting this thing to continue to rise especially after the circus show at the FED minutes.
Seeing a lot of different people talking about the 1.3-1.6 range where it will actually mean something, we'll see about that.
The reflation trade is on lol.
lets see how it goes.
That's all folks
Yield smeald YUGE gap up to start the regular trading week.
Looks like another flag has been born out of a consolidation breather.
Still going nicely from the cup n handle eye spotted on this and has a little ways to go as well.
RSI has a little room on daily and weekly before being overbought.
Lets see how high this flies.
Thats all folks
Cycle is up for treasuries and down for the yield.One picture is better than a thousand words, everything is seen on the chart. We should see weakness soon and a weekly close below 0.9 could lead to a retest of the lows at 0.36. Cycle is down till mid February. In April when the triangle ends we might see a total smoke show, possibly on the upside - looking at cycles but that's for another time...
Buy silver.
Buy gold.
YFI road to 100k and beyondHere I show you a pair that might be interesting.
The problem with the team got a solution backed by the community (whales) and the devs.
They are gonna mint some tokens to reward the team.
Imo isnt the best solution, but the weekly chart seems leet and the market seems to react positive to this new.
Macro breakout could be a matter of time.
Dont overlvg this position, but might be good to the since here to average entry if 40k are broken
Thx!
ECPG a good play on the financials sector. Great risk/reward.With growth and inflation rising, leading to a steeper yield curve, financials should continue to perform. One name that sold off meaningfully last week was ECPG. The debt collector should continue to do well in the immediate term given the macro tailwinds to the sector. I'd be a small buyer here, playing for a return to the recent range.
YIELDS GO UPZN futures broke the 200 EMA for the first time since the end of 2018.
Higher yields on the 10y treasuries are on their way.
But let's be clear. Government debt isn't a bad sign in general, but it will be interesting to watch how the FED will (or if they will) react to this new development.
Canadian banks offer high-yielding cushion in a correction.If you're worried that growth stocks (the tech and now healthcare stocks) are just ridiculously valued, then perhaps you should think about Canadian bank stocks as a potential cushion against a potential market correction. Earnings beat analyst expectations. Yields are in excess of 4%. Loan loss provisions will gradually find their way back into bank earnings as the economy recovers next year. The steepening yield curve also bodes well for future earnings growth.
A "surge" in yieldsWord on the street is that real rates are surging. SURGING, I tell you!!
The financial press gets caught up in the moment, swept along in the excitement, elation, and fear of any directional market move. During such times, it is especially valuable to step back, look at the bigger picture, and ascertain if the long-term prevailing trend is at risk of a breakout or reversal.
Take the US 10-year yield:
Looking at a monthly chart, we see 40 years of a very clear downward trend.
That "surge"? Well, look for yourself.
Barring something as extreme as China throwing a firesale on US paper, I expect this trend to continue for quite a while longer. There is a lower bound to yields, but that bound is continually being pushed lower as rates are cut, other central banks foray into negative rates, and investors/funds begin seeking the 'least-worst' store of value.
This demand shift pushing the lower bound lower is what has formed the lower bound of the downward trend channel on the chart.
I'm dubious about this 'reflation trade' story:
The search for yield, and even simply 'least-worst' store of value is the prevailing force in this market.
US treasury yields can only outperform so far in the broader market of debt instruments before they attract more buyers. Negative rates in other nations have intensified this effect.
This behavior forms the upper bound of our downward trend channel.
Perhaps we'll see by the end of December if this "surge" is an actual SURGE.
For myself, I will be respecting the strength of this 40 year trend, and expecting any strong upward move in yields to only tag the upper bound of the channel, (if even that far), before reversing to the downside.
A hidden gem on Uniswap: OvOa TokenThis is something...
the token allows CEX (Bybit in the case) to regain the Market-Making scenary bring back funds from DeFI to their exchanges
the investors can farm a faster, more profitable marketmaking strategy than yield farming on DEX. Instead of paying fees, CEX like bybit are PAYING 0.025% for marketmaking service providers.
more details on andr3.gitbook.io
info.uniswap.org
SUSHI - LONG, Slowly Climbing BackUNI farming will end soon (at Nov 17) and sushi looks like a hot buy again, flipped the first S/R at $1.3 it seems.
It's not just a farm anymore, it has stable yielding cashflows (sushiswap fees, xsushi stacking), constantly rising TVL and future products (Bentobox (Margin trading any alt pairs), Gusoku, MISO).
I'm long from $1.19 avg, targeting $2.0. Let's see how it plays out.
Information is just for educational purposes, never financial advice. Always do your own research.
Hit the "LIKE" button and follow to support, thanks!
Bond Yields point to recession....or this time it's different?The 10y-2y bond yields are important because it is the long-short of market expectations; that is, how people view the near-term market vs. their perceived evolution of the market (that also anticipates the FOMC's likely reaction. It's several signals in one). The 10y2ys (blue) is the 10 year Treasury constant maturity (now at 0.96%) Minus the 2-Year Treasury constant maturity (now at 0.19%). The higher the number (and greater the difference), the more people value long-term certainty over the short-term unknown.
Currently, the 10y-2y is at 0.8 and rising which last happened in December 2007, April 2001, December 1990, July 1986, October 1971... you get it. It's a reliable indicator, and in the past, a negative 10-2 spread has predicted every recession from 1955 to 2018 (SOURCE) , but has occurred 6-24 months before the recession occurring. The last time it went negative was in August 2019.
THE ANALYSIS
Notice that we're approaching a golden cross (yellow 50ema crossing the white 200ema). The last time this happened was January 2008, and May 2001. I've overlaid the S&P- you can see it's crashed.
So is this a new paradigm of monetary policy? Or does nothing change? Is this time really different?
Here's the historical US Yield Curve source.
MORE ABOUT THE YIELD CURVE
Bond prices and yields move inversely of each other. When bond prices go up yields go down, and vice versa. The reason that lower yields in the long term are a indicator for the economy is because longer term bonds are seen as safe investments meant for preserving wealth; while stocks, forex, and derivatives are riskier and used for growing wealth. When investors have a good outlook on the economy, they will sell their long term bonds and put that money into the riskier investments listed above. This flight from longer term bonds to riskier investments causes demand for the longer term bonds to fall, causing bond prices to fall ,and yields to increase. In times of bad economic outlook, people will start moving their money from stocks into the longer term bonds as a way to protect themselves from potential future downturns. This flight from stocks to longer term bonds causes demand to increase, causing bond prices to increase, and yields to go down. The change in bond yields is based on bond price, which is based on supply and demand.
HISTORICAL CONTEXT:
The 10-2 spread reached a high of 2.91% in 2011, and went as low as -2.41% in 1980. During recession, central banks lower rates pushing down the i.r. curve. When the spread starts contracting, market expects a coming cut of the i.r. and a future lower curve. For this reason, real world curves (vs academic ones) are decreasing on the long terms: a kind of economic cycle is implied. You may also read the spread under a credit risk point of view: a tight spread means "if an issuer can survive 2y, it is very likely that it will survive also 10y therefore a small extra premium is required". This is very clean in distressed bond issuers: implied yields usually form a reversed term structured (decreasing like an hyperbola).
See more:
Bond Yields point to recession....or this time it's different?The 10y-2y bond yields are important because it is the long-short of market expectations; that is, how people view the near-term market vs. their perceived evolution of the market (that also anticipates the FOMC's likely reaction. It's several signals in one). The 10y2ys (blue) is the 10 year Treasury constant maturity (now at 0.96%) Minus the 2-Year Treasury constant maturity (now at 0.19%). When the spread increases, it means there's falling demand for long-term Treasury bonds, which means investors prefer higher risk, higher reward investments. Investors think interest rates will now rise in the short term.
Currently, the 10y-2y is at 0.8 and rising which last happened in December 2007, April 2001, December 1990, July 1986, October 1971... you get it. It's a reliable indicator, and in the past, a negative 10-2 spread has predicted every recession from 1955 to 2018 (SOURCE), but has occurred 6-24 months before the recession occurring. The last time it went negative was in August 2019.
THE ANALYSIS
Notice that we're approaching a golden cross (yellow 50ema crossing the white 200ema). The last time this happened was January 2008, and May 2001. I've overlaid the S&P- you can see it's crashed.
So is this a new paradigm of monetary policy? Or does nothing change? Is this time really different?
Here's the historical US Yield Curve source.
MORE ABOUT THE YIELD CURVE
Bond prices and yields move inversely of each other. When bond prices go up yields go down, and vice versa. The reason that lower yields in the long term are a indicator for the economy is because longer term bonds are seen as safe investments meant for preserving wealth; while stocks, forex, and derivatives are riskier and used for growing wealth. When investors have a good outlook on the economy, they will sell their long term bonds and put that money into the riskier investments listed above. This flight from longer term bonds to riskier investments causes demand for the longer term bonds to fall, causing bond prices to fall ,and yields to increase. In times of bad economic outlook, people will start moving their money from stocks into the longer term bonds as a way to protect themselves from potential future downturns. This flight from stocks to longer term bonds causes demand to increase, causing bond prices to increase, and yields to go down. The change in bond yields is based on bond price, which is based on supply and demand .
HISTORICAL CONTEXT:
The 10-2 spread reached a high of 2.91% in 2011, and went as low as -2.41% in 1980. During recession, central banks lower rates pushing down the i.r. curve. When the spread starts contracting, market expects a coming cut of the i.r. and a future lower curve. For this reason, real world curves (vs academic ones) are decreasing on the long terms: a kind of economic cycle is implied. You may also read the spread under a credit risk point of view: a tight spread means "if an issuer can survive 2y, it is very likely that it will survive also 10y therefore a small extra premium is required". This is very clean in distressed bond issuers: implied yields usually form a reversed term structured (decreasing like an hyperbola).
See more:
LONG AAVE/USDT on breakout of downtrend!LONG AAVE/USDT on breakout of downtrend! Aave is an open-source and non-custodial protocol to earn interest on deposits and borrow assets with a variable or stable interest rate. It also enables ultra-short duration, uncollateralized flash loans designed to be integrated into other products and services. Aave began as ETHLend in 2017 after it raised $16.2 million in an Initial Coin Offering (ICO) to create a decentralized lending platform. Later, they announced a parent company, Aave, which would house multiple different products including EthLend, Aave Lending, Aave Pocket, Aave Custody, Aave Clearing, and Aave gaming.
LONG YFI - Oversold with Positive Divergences... Yield farming LONG YFI - Oversold with Positive Divergences... Yield farming aggregator. In fact yEarn.finance is a decentralized asset management platform that has multiple uses ranging from liquidity provision, lending, to insurance. The most prominent product in its ecosystem is Vaults which maximize users' yields by through various yield farming strategies proposed by the community. yearn.finance
LONG YFI - yEarn.finance - Oversold with Positive DivergencesLONG YFI - yEarn.finance is a decentralized asset management platform that has multiple uses ranging from liquidity provision, lending, to insurance. The most prominent product in its ecosystem is Vaults which maximize users' yields by through various yield farming strategies proposed by the community.
Token
Yield Aggregator
Decentralized Finance (DeFi)
Governance
Yield Farming
Yearn
KAVA - Retesting Key Support, Quick 20%+ likely!KAVA has been crashing around it's key support for a few weeks now, in a declining triangle; which as we've seen can go either way.
As we've seen with the last two bounces, we're likely to hit up from where we're at now to the upper resistance line.
RSI is ripe for reversal
MACD has shrinking bearish deviation and is heading to bull cross
volume has been dropping over the sell
EMA's 100& 50 are both by the upper resistance line,
We just went below EMA 200, which has been a pivot line 3 times in the last month and a half.
Should be pretty clean; set your stop loss below the support level , if it goes south it'll be a hefty decline.
There's a chance we'll move up to the green demand zone as we have been ranging here for a good while. But safe bet is catch the upper trend-line as TP.
--
I'm a guy that you don't know posting his ideas on the internet for the sake of improving as a human being. If you take this as financial advice, that's on you.
If you like my analysis, then leave a like and feel free to follow for more free content. Feedback, criticism and crude humor are welcome :)
YFII Again Rejected By Resistance | Was It A Bull Trap ???Hey friends, hope you are well and welcome to the new update on YFII token.
Previously the price action broke down the support of the pennant on daily chart. But in a very next candlestick we can observe a powerful buying volume therefore while re-testing the previous support as resistance the price action of DFI.Money re-entered in pennant. Finally the price action of YFII token also broke out the resistance of this pennant. But the priceline is still below the exponential moving averages with the time period of 10 and 21. For confirmation of the change in trend from down to upside we need crossing above these EMAs 10 and 21 and a bull cross between these EMAs as well.
In my previous post we have seen that on small time period 4-hour chart the priceline of YFII token broke down all simple moving averages with the time period of 25, 50, 100 and 200 and there was a big distance between all these moving averages and the candlesticks. At the moment the price action is again breaking out the 25 SMA and soon it can also breakout the other simple moving averages as well. For complete trend change from down to up we need the closing above all these SMAs.
On daily chart the price line is also completing final leg of bullish Butterfly. But the priceline cannot complete this leg because if we see the trader’s interest as per volume profile of complete price action of this butterfly. Then it can be clearly observe that trader’s has no interest to trade below $800 and this can be last support as well. The priceline has also a very strong resistance at $2600. In my previous article I also mentioned this resistance and now the priceline is rejected by this resistance. So the previous short rally to the upside worked as a bull trap for many traders. However the priceline is moving with the pivot 1st support and point of control of the volume profile.
Conclusion:
The priceline is moving with pivot 1st support and point of control of volume profile therefore is the priceline would be moving here sideways and in the meanwhile if it will cross up the EMA 10 and 21 on daily chart and simple moving average 200 on 4 hour chart. Then it can be possible that the trend will be completely changed from down to up side. And if the volume profile will start showing interest of traders below the $800 level in coming days then more drop can be possible as well.