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Yieldcurve

Prediction of next financial downturn Pt.2Dow Jones dropped over 1200 points in one day, that's the biggest downward move ever happen. Interest rates are going down FED Watch Tool shows over 99% that FED will cut at least 25pts. More cuts will come soon, please check www.cmegroup.com I follow this website and 3-5 days ago there was only 10% for a single interest rate cut. Unfortunately, due to the Coronavirus outbreak global economy suffers and the whole world will soon enter Great Depression!
TVC:US10Y
by Simon_says
2
Yield Curve and the SPYIf we take some of the information that past yield curve signals have shown us we can expect about 18 Months of correction. Funny enough the average bear market is about a year and a half as well so there's a bit of confluence with what the charts suggesting and what we know as good trading rules of thumb. Based on this information i'll be letting part of my SPY Put position go into next month and look for reversals to exit and begin hunting long setups into April-May 2020. As with all trading the market can and will do anything it wants to haha so keep that in mind as well and be good about risk management ALWAYS. More Info: www.investopedia.com www.investopedia.com
AMEX:SPY
by JoshuaMcGowan
Macro Deep Dive - SPX, Initial Claims, Yield Curve and Fed FundsCharts: - Top left = SPX - Bottom left = Initial jobless claims (unemployment metric) - Top right = US 10 year and US 2 year spread (Yield curve inversion metric) - Bottom right = Fed funds rate (short-term interest rates) It is no secret that US equities are grossly overvalued, from Warren Buffet to Stanley Druckenmiller to Ray Dalio, the smart money has made their case for why US stocks simply cannot justify their valuations indefinitely. Yet Stocks continue higher, largely due to massive CB liquidity, spurred on from fears of a global slowdown and the ensuing economic impact this would have on such indebted nations and consumer, this coupled with the supply chain shock that the Corona-Virus is undoubtedly having on global trade is a recipe for disaster. So what are the macro/ recession indicators saying? They are flashing red. The Initial claims are at record lows, which sounds fantastic, until you realize that most major recessions and even depressions are accompanied with low, not high, unemployment. Recessions strike when everyone is complacent, when they are fat and happy and when they have their blinders on. I will be watching the initial claims and will look for the the claims to spike and reverse trend, as this is a much stronger indicator of structural weakness within the economy. Moving over the the US10y/ US02y spread, it is well known that the yield curve briefly inverted in 2019, however, the initial inversion is not the point to sell, this is due to the yield curve inversion being a leading indicator of recession. Historically, from the point of first inversion to the inevitable decline in equities, is roughly 12 months to 18 months. We are 7 months into the initial inversion and the yield curve looks like it is going to invert yet again. Finally we have the Fed funds rate, the targeted overnight lending rate for the Federal Reserve. The trend is clearly down, down, down with rates this has been rocket fuel for bonds which are now traded akin to equities for capital appreciation, rather than the interest bearing assets they were designed as. Furthermore, and perhaps most interestingly, it is not the point where rates are raised that signal trouble for stocks, but rather once the Fed pivots and reverses course and begins easing and lowering rates, THIS, not the rate hikes is the signal to watch for. It comes as no surprise then, that interest rate cuts have not only begun, but are in full swing, with further rate cuts this year, already being priced in. The macro outlook looks bleak, this bubble CANNOT last forever, however i firmly believe that the Banksters will not let this bubble burst without a fight, a global slowdown, coupled with global equity markets crashing would cause widespread panic and in some places, riots. So keep an eye out for the helicopter drop of money coupled with bail ins, bail outs and of course, more QE. -TradingEdge
TVC:US10Y
by Profit_Link
4
The Japanese 10yy is turning back to the downside. Sell AUDJPYHey all. I've been an avid fan of selling rallies on AUDJPY for the last year or so. Over the last few months, we saw the Japanese 10 year yield push higher from its lows (the Japanese 10 year bond was being sold). This was probably due to a slight recovery in global data, leading to a more risk on environment... And we eventually saw the Japanese 10 year yield push up to positive for the first time since March 2019. I do not believe the yield can sustain above 0%, however, due to the extensive QE push that the BoJ have conducted over the last 2 decades, since causing this debt to become relatively more expensive would be suicide for the central bank. On top of this, I do not believe that Abe's fiscal stimulus will create the desired increase in inflation expectations in the short to mid term. If it were to occur, however, we'd likely see a front end steepening of the Japanese yield curve. The BoJ have a policy of YCC (Yield Curve Control) where they want to keep the 10 year yield at or below 0%, since it's believed that the central bank is only able to control short term rates - this is why they introduced this measure. If we look at the chart of AUDJPY with the Japanese 10 year yield overlaid in orange, we can see that we are at a turning point, and this is potentially a good place to sell the Aussie versus the Yen to action this macro theme. What to watch out for as well could be a greater proliferation of the Chinese flu epidemic which is likely to lead to Yen being bought, potentially as a safe haven. I do not necessarily think this will have an effect on US stocks, since USD can also end up being a safe haven, and with the Fed essentially supporting the US markets, it may not make a valid case to be short AUDUSD - the idea is best supported by using JPY as the counter pair in the trade.
Short
by FinkPro
1
Gold Indication of Market Retrace :: 10YR Yield and S&P 500This post was encouraged because of the Economic Forum being held in Davos, Switzerland. The last 3 years (roughly since mid 2017) contained talk around trade war. This has caused chaos within the markets. We have moved up and down 1000's of points with no specific direction. It seems that September 2019 has shown the true colors of the market sediment. We can identify the percent returns of the 10YR yield, gold and S&P 500 from this date. Things have not been adding up and has been blurred by the DOW hitting new highs every other week, misleading investors. Nobody is saying to liquidate but a rotation of wealth is underplay. I do believe that this is a rotation of wealth that is not our normal move into commodities/metals but potentially something larger. Impeachment trial proceeds today during the start of the Economic Forum. Is this to sway attention towards Davos? We will never specifically know until everything pans out. The chart speaks for itself with presenting the data. I would like to hear anyone's thoughts, ideas and/or theories.
FX:XAUUSDLong
by MarketPointAlgo
USDJPY and the US 2 YEAR YIELD CORRELATION 'CRACK'Since the YC inversion in August last year (2019), there has been a "crack" in correlation between the US02Y and USDJPY. I expected the YEN to strengthen as the Japanese short the dollar against the YEN to hedge against the rising US Govt bond prices (due to the rate cuts) considering Japan holds a significant amount of US Govt debt. My initial thoughts on this is that the BOJ is focused on keeping the YEN weak to stimulate its export sector which accounts for a significant amount of its trade. At the expense of its debt ballooning ????? I'll be looking into this during the weekend. -Surecapital
by Txnytradesfx
1
SHY-1 to 3 year Treasury ETF-Trendline breakdown Forming H&S TopTreasury yields have been rising over the past two months, with 2-10 treasury yield spread reaching 29 bps on 12/20/2019, highest level since June 2019. The 1 to 3 year Treasury ETF - SHY broke below the June-November 2019 trendline last week, forming a head-and-shoulder top. Based on the project, the treasury bond ETF prices could target 83.95 area, retracing 50% of the 82.85 (November 2018 low) and 85.12 (August 2019 peak) swing in the next few months. Happy Trading!
NASDAQ:IEFShort
by novvoll12
SHY-1 to 3 year Treasury ETF forming H&S top Treasury yields have been rising over the past two months, with 2-10 treasury yield spread reaching 29 bps on 12/20/2019, highest level since June 2019. The 1 to 3 year Treasury ETF - SHY broke below the June-November 2019 trendline last week, forming a head-and-shoulder top. Based on the project, the treasury bond ETF prices could target 83.95 area, retracing 50% of the 82.85 (November 2018 low) and 85.12 (August 2019 peak) swing in the next few months. Happy Trading!
NASDAQ:TLTShort
by novvoll12
1