US01Y just diedPublishing this just so you are aware.
Ofcourse must be some kind of bug, right ?
..RIGHT?
Yields
US10Y Elliot Wave Analysis (fun might be over) **WHERE DO WE START**
At this point it is nearly unarguable that the move up form the Covid lows looks impulsive, meaning we are in some sort of a new bull cycle.
In the past, since US10Y's inception back in the late 1970s the path it followed had a downwards trajectory that made new lows after each bull cycle was done. The US10Y would then correct those lows over the next 2-4 years or so and retrace to .5 fib or .618 fib of the previous high. It did this every single time, however in 2022 it is acting very different. For the first time in history since inception the US10Y blasted through the .618 fibonacci retracement of the previous top which was in November of 2018.
My view was bearish for most of this year since we were coming up against strong resistances, however since the price pierced through them all with little effort and continued up makes me lean bullish on the Macro outlook.
**TRUNCATION**
Truncation (definition) - What is truncation in trading. In most impulses, the fifth of the Elliott waves extends beyond the extremum of the third wave, but sometimes the fifth wave may not reach the end of the third wave . This phenomenon is called truncation or truncated wave.
The next event I need to go into is the truncation of the 5th wave down that took place in August of 2020. Truncations are rare events in Elliot Wave Theory and require very careful analysis to ensure the count is not something different. It is more likely to see a truncation in very volatile environments, and Covid crash of 2020 was undoubtably one. This truncation does not show up on US05Y or US02Y leading me to believe the actual bottom on US10Y was in August of 2020 and NOT in March of 2020. However this doesn't change the current count, just some clarification for those using Elliot Waves.
**WHERE ARE WE NOW**
Since the bottom we see an impulse up of which waves (1) and (2) are complete and wave (3) is in progress currently finishing it's 5th subwave. I expect the price to come to 4% or even 4.5% before the likelihood of a pullback for wave (4) becomes highly likely. The wave (4) retracement should be relatively large pulling back to .236 or .382 on the fibonacci levels from the top of wave (3). The price could come down to 2.75% - 3.5% on US10Y depending on how high wave (3) ends up going, although wave (4) pullback is allowed to go as low as .5 fib which could bring the US10Y down even below 2.75%, but I must say I find that unlikely considering how bullish this move up is coming to be.
**LIKELY PRICE PATH**
What's beginning to look clear is that after we finish wave (4) in a 3 wave structure down or perhaps a triangle formation (common in wave 4 pullbacks), we are still going to need to complete the impulse sequence and start a wave (5) up. Yes, I expect US10Y to hit and possibly go past 5%. Once there we have a completed wave 1 on a Macro outlook since the crash of 2020. I will then expect government treasury bond yields to enter a short term "bear market" and correct the entire move shown in the chart as red ABC down. This could then be last great pullback... and an opportunity to buy a house at a very affordable rate. Why? Because once this ABC that will correct this entire bull move up is done, we should see continuation in rising interest rates in a new bull cycle up. A 5 wave Elliot impulse is not a complete sequence, it should be followed by a 3, 7, or 11 wave down correction. Typically retracing to .5 or .618 on fibonnaci retracement levels and continue up again in a minimum of 5 waves.
**CONCLUSION**
The era of cheap rates might be coming to an end, and 2020 covid crash might have marked a long term bottom on treasury yields.
Cheers,
Reverse Head and Shoulders Breakout in 30 Year Bond YieldVery clear reverse head and shoulders, a very strong chart pattern indicator for long term tops and bottoms, target is 3.6% yield on the 30 year bond. A retest of the neckline will confirm a very strong possibility of the target being reached.
On the macro side, I think yields will be forced lower over the next 1-5 years.
I'm looking to go all in on leveraged bonds if and when the the 3.6% yield is reached, or if CPI starts showing significant weakening.
SPY - Larger ContextLet's dispense with the Master O' Obvious stuff straight away.
Pick an Adjective - it won't rhyme with Bullish.
It may, however, be cringeworthy.
NQ below 200 W SMA.
What lay ahead remains up to 3588 for the ES Futures, *Note the 200SMA Weekly is just below
this most important of level @ 3585.55.
Powell - simple... NO CHANGE.
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There has been a very orderly decline since The Terrible Tetons.
The Monthly Gaps below remain wide open for Business, but - the Gaps above, not so much.
It would take an extraordinary/non-binary Event to Fill those for now.
We will see what further Fiscal attempts at remedy appear as we approach the Mid-Term Elections.
I have November 7th as an important Pivot in Time, unsure as to why. It is however extremely
significant as it keeps making appearances in Time on a great many studies.
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Risks remain to the downside Short Term. Intermediate-Term will depend on an October Communique
from the Market Overlords aka "Behnchods".
The Chart is self-explanatory / it illustrates the Risk / Reward clearly.
What was most interesting this week was how Wall Street was extremely agile in positioning. Options
positioning was done with extreme Velocity / Scope / Scale. Executed perfectly to cause maximum
confusion until it was too late for the boat to right itself.
They capsized small Specs, repeatedly by loading the woodshed on the Sell in record time.
And then, proceeded to close out Open Interest as quickly as it appeared once Payment was secured.
Unfortunately, the House continued to press the SELL once they'd squared @ 365.06 on the SPY.
The VIX and SPX, ES, NQ, YM - Inverse Gamma Hedging was NOT unwound but pressed quite hard.
Gold - Lower for the nearer term, it is a broken trade, it can RT, but it will fail.
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Here was the Implied Skew and Range I calculated Thursday for the Friday Dance Mix:
Call Skew ATM
$ 53,140,489.00 384.94
43.41% 365.06
Range 19.88
IV% Gamma Dependent
PUT Skew ATM
$ 122,410,005.00 384.94
230.35% 365.06
Range 19.88
IV% Gamma Dependent
The Close came off the Pivot after dipping in ever so slightly with 368 for the SPY Close
based upon the collapse of Open Interest - closing at 367.95.
Wall Street ran the implied range @ 19.88 by 1.79 - a small expansion to 21.67.
Close enough, MaxPain had the SPY pinned @ 387... their data sets were off by a very wide
margin - an absurd failure on their effort.
Here is the Open Data Set:
Calls O/I $ Multiple Notional $
375 179749 2.23 100 $ 40,084,027.00
376 155605 1.77 100 $ 27,542,085.00
377 115204 1.37 100 $ 15,782,948.00
380 175276 0.56 100 $ 9,815,456.00
$ 93,224,516.00
Puts O/I $ Multiple Notional $
370 218394 0.89 100 $ 19,437,066.00
372 110857 1.43 100 $ 15,852,551.00
373 116496 1.77 100 $ 20,619,792.00
374 165461 2.18 100 $ 36,070,498.00
375 247727 2.64 100 $ 65,399,928.00
376 95994 3.17 100 $ 30,430,098.00
$ 187,809,933.00
In Sum, do not ever trust MaxPain, do your own work.
It is garbage.
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The important points in the Chart:
Notice where the 55 EMA resides.
Observe the Shorter duration of EMA crosses.
EMA slopes and ST Fib Levels as both are Neodymium Magnets.
Gap Fill Extension Range to and from recent Gap Highs to Implied Price Objective.
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On to the Fundamentals:
AAII Sentiment has crossed 60%
Fear Greed is now 24 breaking into the Extreme Fear base camp
The Dollar has its sights set on the 121 / 125 region, please observe the EuroDollar Chart. As well,
consider the Dollar's response to BOJ interventions.
Bonds are showing immense stress in the system. UST Settlement Failures are a disturbing account
of reality. Defaults are mounting Globally, (See UK $500B recent Default last week).
Yield Inversion simply continues to accelerate in fits and starts. Forwards for 1, 2, 3, 5, and 7's are heading
to 5%. A 40-Year Freak Out as Yield Inversion has exceeded 50%.
FX - Default dislocations throughout the Markets can lead to a near Instant Spike in the Dollar contrary
to those who are Bearish on the DXY. Yes, it will indeed collapse - your timing... it's off is all.
Bitcoin - SUB 10K IMHO with ease - see Trendline.
It is important to remember with EPS ahead - the Mega Caps breaking down... after 3 reductions
to lower guidance since August... Sellers are piling into Apple once again, with good reason, it looks
horrific. Weakness is everywhere in MegaCaps.
Breadth - collapsing
TRIN - Horror Show
TRIX - Ditto
Market Internals - No Nieno
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Contrarian Traders are likely early, hopefully, we see a small RT Monday for Wall Street to reposition.
Have a great weekend. if you enjoyed this and found it of value, please give it a thumbs up and do share your
thoughts - it is appreciated.
Effective Fed Fuds 2023 - Powell's War on You
Growth, Employment, Inflation - aka what's left of the Economy.
1. Employment - seeking roughly a reduction of 12 Million Jobs.
2. Growth - reduction of 50% for S&P 500 from Highs.
3. Inflation - Leads until Rate Lag breaks everything.
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Capital Stocks
Powell - Bonds are going to see a Yield Curve Inversion, larger than usual. There is no single
condition, what is the term premium on Longer Rates is what matters most.
Powell - Housing will see a significant correction, we want the housing market back on a
sustainable path.
Powell - Equities are overvalued, period, the end. We're committed to "Price Stability"
Powell - The US should not return to a Gold Standard - Digital Currency is the path.
Powell - We flooded the System with Money (Digitally) by buying Bonds now we are selling them.
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Forward Rates are indicating he is very serious.
I've warned about this for well over a year now - safe to say its come to pass.
DXY Makes New Highs After the FOMCThe DXY got a strong burst of momentum from yesterday's FOMC. Although we got our 75 bps hike (as expected), the press conference that followed was a lot more somber. Powell forecasted more hikes, despite the markets expectations of a more dovish forward guidance. This fueled an interest rate spike in treasuries, and bolstered the DXY's meteoric rally to break through highs and hit our target of 111.37 exactly. Recall that we have been projecting this level for weeks. Currently we are seeing a bit of a pullback which is anticipated. We should see support at 110.20, and potentially a sideways correction from here.
The Bond Market Reacts to the FOMCBonds have slid further and there is no relief rally insight. The markets were hoping for a 'dovish hike' in the sense that the 75 bps hike would be followed by dovish rhetoric. In fact it was the opposite. Yields have maintained highs pressing prices further down. We are hugging 113'12 and expect support there. If not, we will use Fibonacci extension levels to determine support levels further down. Our targets are 115'03 and 115'29 if we get our relief rally.
SPY - Apres Powell & The Double DipJackson Hole, CPI, and FOMC are rearview.
Are you a Dip Buyer - with Powell stating the FED is on the low side of the
Target Range?
That is a suicide, assured.
See Chart - the obnoxious Bots are far more intelligent than us and gaining
further ground exponentially. We closely observe their programs daily and
make adjustments among our small group of live traders each and every day.
That Chart is simply NASTY.
The June bottom is where Traders are now focused. I'm looking lower.
It's not going to hold IMHO, 3588 for the ES will be tested and panic will
become a brushfire.
Yesterday's SPY frenzy failed 8 times... it whipsawed all the degenerate
gunslinging gamblers - all in the last 150 minutes.
Degens were buying calls into the closing... which in turn provided the
fuel to wreck them for the 9th time into Globex.
Amazing to watch, but disappointing as we traders need Liquidity.
Net/Net the CBOE Equity Put/Call Ratio closed the day @ 0.71 for Sep 21, 2022.
Technically the Markets do not support Buyers.
Liquidity does not support Buyers.
Margins do not support Buyers.
Volatility does not support Buyers. A larger Gap Fills overhead.
Yields do not support Buyers.
The Dollar does not support Buyers. Look for my 111.71 Po to be hit, should
it snap higher... 112.27 to 144.11 come into the Trade,
I have been patiently waiting for the real Panic event, where the Algos
simply pull the Bids and let gravity take hold.
Is there a setup here?
No, there is however a great many trades.
Options positioning has played an important role in Intra-Week to Monthly
expiration. I trade the O/I Setups and imbalance as a better guide Intra-day
and Intra-week.
It's a nose-biter, but it is what we are given.
3810 on the ES is gone 380.11 & 382.67 for the SPY - goners.
NQ's 50 FULL HWB 50% @ 13415 - nearly 2K overhead.
Dow/YM - 28.4 / 28.2 Gap Fills ahead.
VIX - Term Structure... Backwardation I wanred of...
arrived.
Bonds - my implied "Return of Capital" trade is active. They will be wrecked
again, the same traders buying TLT since 180, 155, 145, 130, and 120 will simply
be hammered again. Flight to Disaster Trade will fail again as it has 7 times.
You do you traders will be crushed again. Flight to Safety will get caught
up and distend Value and Price once again. I'll be Seller into the next CT in
TLT.
Bitcoin - rejected, Sub 10K ahead - the larger Long Term trendline, IMHO
will not provide lasting support.
Gold - Horror show continues. After being repeatedly told by a few traders it's a
buy @ 1930... 1900, 1872, 1850, and 1800... they are now about $300 out of the money
since bringing out the Bullhorns... GOLD is heading a great deal lower. Ya'll were
warned by a person who has traded Gold for 44 years now. Projecting sophomoric
experiences from YouTube... fails every time. Trading on the Comex back in the
day isn't some dumbass projecting, it's wisdom. You do you aka... wrong again.
Energy, we remain patient for the 77 Full HB Test to see the lower extension.
Sentiment - Terminal.
In Sum - charts are pretty much useless as Fundas take hold, yes they'll instruct
on Possibility/ Probability - but that is rather obvious is it not?
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Powell promised to Break "Something" - "Everything" appears more appropriate.
Fixed.
Powell indicated the FED sees further Risks to Inflation and needs to bring
Fed Funds move aggressively towards the Inflation Rate.
Will Technical Exhaustion provide a small Counter-Trend this week... possibly,
but that appears to be an event for Friday. Powell speaks @ 2 PM EST Friday.
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Calculating the Yield Push forward for 6 Months, I currently have 4.53% for
Effective Fed Funds into April / June of 2023. This is subject to change as
my Dot Plot is now ~480/490, unfortunately, it extends to 500/510 into
March of 2024.
The Yield Curve will see 6% into October of 2023 IMHO. The Pullback to 2.71 on
10 Year was a very limited YCC intervention from the Federal Reserve.
My projection, the Federal Reserve is relying on Inflation returning below 6%
into 2023.
It is important to remember the BLS reset the BASE for CPI on January 1st, 2022.
2019/2020 is the present Base.
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I have referenced the FSR repeatedly for 10 Months - If you have not read the
Federal Reserve's Financial Stability Report since last November and again
for the May 2022 release - it requires traders' attention.
Here is their SPY Objective - 240 - it will likely exceed this level over time
filling the Gap at 235.
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Good Luck & Trade Safe.
7-10 Year Bonds May be Ready To Go Up due to the FOMC ActionsI will be buying bullish exposure to 7 and 10 year treasuries as a result of topping out inflation and the fed's aggressive actions to kerep it down.
Bearish Divergence on the US10 Year YieldIf we can see tthis begin to come down from here we will see stock continue up and the dollar return down.
SPY / ES / SPX - Market Structure & PostureWeekly Engulfing Charts are clearly not a preferred look for the Buy Side and those
riding the Bullish Tilt-O-Whirl - Bodies are being flung everywhere.
The Dollar is doing its thing, it ran to our PO at 107.65 with a 107.67 print and
reversed yet again. it's been a pattern as the EuroDollar continues the ties that
bind, Dollar shortages create demand until the Dollar is dethroned.
Sell Side has lifted the CBOE P/C to (.82).
Please note after the brutal June 17th 4X - we reversed very hard the following Monday.
For Roll out the Options Curve - it's muted Frankly. Traders took their Bags, packed up, and headed
off to parts unknown.
That said... Bulls may have a chance to hold and to have... "may" - as horrific as it looks,
Wall Street may surprise with a short Countertrend to shake off the Late chasers. Again it
is "may" not will - It is, however, exactly what I would do.
There simply isn't enough Capital to transfer in the leveraged deep end of the Pool. It
seems there is another attraction elsewhere for now - unaware of any real contests outside
of the Lounge, but the lizards are somewhere, for certain.
Sentiment everywhere is pure doom, gloom, and kaboom. Understandably so after Teton
Jerry and CPI - it's been a brutal month for Buyers. Wrecked and Raked at every turn.
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Here's O/I for SPY into Month End by Expiry:
SPY 9/19 Exp - Very Low Participation
SPY 9/21 Exp - Moderate Participation (FOMC) / VIX Roll/Settle Complete 4 PN EST on 9/20)
SPY 9/23 Exp - 360 Participation @ ~70K
SPY 9/26 Exp - Very Low Participation
SPY 9/28 Exp - Very Low Participation
SPY 9/30 Exp - Very High Participation @ 390 @ 102K / 385 @ 134K / 370 @ 143K / 350 @ 120K
October Monthly Expiry needs those traveling to parts unknown, requiring some time to re-engage.
It is important to note the early & largest entry for October was 372 Puts.
On to the Chart
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Charts are simple messy, mixed, and have the appearance of that "double bottom" in trade
and quickly... which may be why it doesn't happen.
The KEY Line in the Sand is not the Lows, it is the dip in below 3588 - that is a number
so please commit it to memory, breaking it.. assure a return to far lower lows, but
over time.
We completed Day 21 of this downside Crush from Wall Street. The Financial Media has been
abuzz about multiple contractions after spending weeks supporting "Pivot Chatter" and, surprise,
"Multiple Expansion" - remarkable anyone listens.
For "Time" we need a breather... soon. it's important to remember the ES defended the
FHWB - all-time highs to lows @ 3849.50 @ 3853.
Structurally - it looks bleak. I mean look at it... it's terrible. Longer Term, even worse - but
that is for later, for now, it's interesting... and it is quite possible we get a larger counter-trend
Squeeze developing this week. A very nasty one... quite possibly.
RSI STO supports its development near term. Best to be agile and not be caught offsides, as
fear is grinding lower - currently @ 36 as the September Vix settles on - Powell the 21st.
Jerry's arrival Wednesday with 75BPS most likely, as 100BPS I was looking for may be split to
the November FOMC as it appears to be 75BPS as well. The Ministry of Financial Truth was
out early in the week touting100 only to hear JPM quash that with "The Fed isn't going to raise
100BPS, but 75BPS".
We will see, I'm non-plussed with Forward Rates trading @ 4.5%. Yields have gone vertical... never
a good thing, not ever. Institutions apparently now consider the 1 & 2-year pristine collateral.
I had to laugh when Bloomberg touted - "Yes but the 30/90 Day are not inverted~!" Oh, Hooray
for this - perhaps it's the fact Yellen curtailed issuance to non-existent and the Market for the
very short end of the Curve... is not trading any real liquidity.
Something is going to give - but in a most unusual way. Yes, valuations will be corrected further.
Of this there is little doubt, it's how it occurs that traders seize.
Wall Street enjoys a nice lift ahead of EPS Season... with Powell stuck squarely in the middle.
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Capitulation IndicatorThe 30:10 Treasury Bond Yield Spread is a simple Ratio difference between the 30-Year Treasury Bond Rate
and the 10-YearTreasury Bond Rate.
A Large exodus from high Beta/Rho correlated Assets to perceived Safe Havens.
Presently the best-performing and most stable Asset of 2022 has been Cash - The US Dollar Index was 94.63
in mid-January to a high of 110.78 - a return of 17.066%.
Both the 30:10 Ratio and DXY performance are indicating an extreme lack of confidence in the strength of
the Economy.
Quite recently Cross Flows among Capital Stocks - largest Inflows this week are 2-year Treasury Bills @ 288%.
The flow was Net Cash to the Curve by Institutional Investors.
Concerns are rising with respect to both the return of Capital as well as the return on Captial.
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$3.196 Trillion across - Stock Index Futures, Stock Index Options, Stock Options, & Single Stock Futures.
P/C remains elevated @ .72 with .76 being the Pivot.
The LIS for 4X Expiry is SPX 3900, we will need to see Open Interest activity as the Day progresses.
It will either be supported for the Close or it will not as the next support is the Lows in June.
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It is important to observe the steep decline in Open Interest.
The largest SPY Roll was into the OCT Expiry @ 372 Puts.
SPX shows a parallel Roll.
Please watch the Globex Lows - the NQ and ES can trade lower, it will be important for the NYSE Open.
I focused initially on CASH for TECH - QQQ's 285 had the largest Roll period. In addition, all Strikes with a few
exceptions up to 310 had retail rolling from 287.
At the moment the O/I is churned for tomorrow, with both ROLL and SWAP to Retail, BUT Retail was a net
BUYER of Calls.
383 is the Primary Support now that we crushed the trend lines, the Fibs line up there for the SPY.
The ONLY issue I see is the Algos took the ES Futures up and over its Pivot trendline at the Close by a
very small amount.
Whether or not we open Up and then backtest or fall away will depend on several indications from the
VIX VVIX $ 2YY... Volumes will be enormous.
I'm looking over correlations and ratios and then swinging back around to Futures Options.
This is what sticks out at present, the concern, of course, is Retail Longs who thought yesterday was a
great day to enter Calls.
What stands out is the size of Roll skipping the weekly expirations for both the SPY, SPX & QQQs.
Intra-Week Roll is almost non-existent.
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**** This week matches a record from 1930 -the lowest raw number of Stocks Up as a percentage.
I warned of the 4X Expiry being a large Risk, for revview -
SPY BEAR MEGAPHONE heading into 13.19.22 (thesis 2)Bearish Thesis catalyst CPI / Inflation data, rocket in yields and VIX.
SPY/SPX - $8 Billion Press to Downside Protection - 4X Expiry
Institutional Protection (Hedging) reached an All-Time High on the September 16th
Quad Witch Expiration.
This position dwarfs prior hedging Highs by 103% and is rising by an additional $8 Billion
added to the hoard of Puts Friday.
Not only are the positions outsized - it was 308% of 2008's Hedging.
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Intense Volatility will return in September.
Of Note, with the declining Volatility Complex, VX Hedging has not dropped within a
concurrent Cost Correlation.
Options Writers are set for 3.19% IV for September... which may portend significantly Higher VX
on any significant change in arrangements.
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On to the SPX/SPY and what is ahead. Of Note, I am Using the SPX as Large traders and
Institutions are most heavily positioned here. Levels for the SPY are contained below.
Trader Sentiment began the Week at 18.1% Bullish & 53.3% Bearish for the next 180 Days.
ISM Price Paid Component declined 34.6% on the latest print as Commodity Intermediate
Inputs have declined significantly.
Interest Rate Forwards are indicating the FOMC will be @ 4% by January. The short end of
the Curve continues to confirm the Fed Fund Futures. The DX took a breather on the Effective
Rate Tussle between the EU and US.
Powell will not do anything less than 75Bps and should the CPI be above 8.1 - 8.2, odds favor
Powell stepping up the odds of 100 BPS, anything below 8 and 75Bps will be the LIS. The
Fed is "data dependent" - ie. they bought themselves time and have already indicated it
will be, at minimum, several months of observing the Data and not one nor two.
Market Internals were solid with 90% Up, 10 :1 Advance peaking at 17 : 1 Intraday. Breadth
improved as well, not significantly, but an improvement pushing the Closing Basis above the
10-Week Moving Average. Friday's rally was broad as was Wednesday's.
NQ's Up/Down was higher as well, with a slight broadening after coming very close to putting
in a lower low.
The Put/Call ratio fell from 1.01 on Tuesday to .80 on close Friday - a 3-day decline.
The ViX has 19.46 wide open again as we move into Roll through Settle, expect a surprise
soon. It is ahead. The VVIX came up to its Pivot and failed badly.
Extreme awareness of the UST Curve and Futures is vital to success as we are seeing 4%
come into our view. DX, same considerations, the Ball is in Powell's court now that LeGarde
has made her tit for tat. FX Disruptions were not considered not all that long ago. I pointed
out they would be arriving shortly back in August of 2021. Very large disruptions were
promised and delivered. 100% Ditto Bonds and their impending implosions.
Dung was Flung then, not so much now and it is quite far from over for Bonds.
As for the Levels in Trade this week, they can be observed on the Weekly Chart in a larger
context.
For Sunday Globex / Monday, here are the levels:
NQ - Range Expands from 12,438 to 12,866 with 12508 as the Pivot.
SPY - Range Expands from 405.44 to 415.22 with 406.17 as the Pivot. The 407.37 Gap is filled.
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*Options have continued to play an important role in Price over the past decade. Presently,
they drive prices significantly.
I will produce a thorough explanation, in detail, in the next few days. It will include:
1. The 5 Greeks and how they function - Delta, Gamma, Theta, Vega & Rho.
2. Alpha and Beta relations from the Underlying to the Derivative.
3. The Yield Correlations.
Have a great weekend, Good Luck on the Open - Trade Safe.
BOTTOM IS IN LONG TERMLooks like corporate yields say the bottom is in for the weekly chart. Corp yields are rolling over. Link to high yields is attached.
Corp. profits are up which is good
Housing market needs to be watched, could be what tips us.
Real money supply is shrinking which is good since we printed so much money 2020
US10Y. P-Modeling Pt 1. Yields of Cajun Welcome Hyperspace Travelers.
Proposition development is rendered.
SPX is going to fresh multigenerational lows.
The cybernetic era of advancement is upon us.
The 4th industrial revolution is imminent.
Things will get better.
But first they must get very bad.
Massive co-variate weight distribution imminent.
Wealth distribution will be forced from top 1% into lower 90%.
Technical Complexity is defined by linear and cyclic domains.
Each domain combined created this gorgeous technical formation.
Complex Technical Formation on 1 Week Macro Analysis of US Government Bonds 10 YR Yield.
Harmonic Handle string sequencing.
Defined Cajun Cup.
Defined C-A harmonic equalization.
Defined Linear Root.
Defined Cyclic Root.
____________________________
Start: 1980.
End: 2025.
Tap: Mean Reversion at minimum.
Thanks for Pondering the Unknown with Me,
Glitch420
Bond Market Reacts to Nonfarm and FedBonds fell again, hitting our next target at 115'29. Yields are creeping up as the markets are pricing in the next rate hike, expected to be 50-75 bps . Nonfarm payrolls gave us some insight into economic conditions: unemployment rose to 3.7%, with a headline miss and downward revision. This suggests that the economy is weakening further, and we are in a period of stagflation. Yields subsequently weakened and we are seeing a slight pivot off 1529. If we rally, we could hit 116'20 or even 117'08. If the figures are hotter than expected it should bolster the Fed's hawkish rhetoric and we could break through 115'29, to 115'03.
SPY - Volumes fell off on Decline
Many Sellers (Bears) missed the Selloff, and many Buyers (Bulls) failed to take profits at the 199 EMA tap.
Frustration abounds and will remain leading to many emotional trades being placed for both sides.
Indices traded into the Lows of their ranges and held for 3 days.
Buyers need a TOSS to get things going to the upside for 420+.
Buyers need to not hear Powell so much as mention QT. This needs to be avoided with Rates the primary
focus. Should he deviate into Quantitative Tightening - all bets are off.
We see the rounded lows in the 1 Hour Chart and the Couuntertrend channel - now we simply see if the
throw over short squeeze (TOSS) holds on GDP.
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After yesterday's -1175 NYSE Tick @ 12:15 PM EST - doubts began to arise once again.
The SPX dragged everything lower in several minutes. Volatility intra-day spiked and created further
uncertainty.
4164 was the Key Pivot for the ES - the front run 4162. During Globex, it crushed this level by 21 Handles.
NQ Pivoted over the Ghost Level @ 13013 during Globex.
Tesla crossed the $300 Level with New POs for 2022 $333 to $425 issued by Investment Banks.
NVDA had issued enough forward warnings to be mildly impacted after issuing its EPS / Guidance.
Debt Forgiveness in an Election Cycle is purely Political theatre.
Powell is due to provide clarity on his position through September tomorrow beginning at 10 AM EST
during a day of very heavy Macro Data.
Fundamentally - it will be an extraordinary day for trading, so best of trading in advance.
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Of Concern:
2YY - 2 YEar Yield Futures are approaching 3.5% - for now and again this is the power of Now - The
Effective Federal Funds Rate is 2.53%.
The 2 Year is getting close to pricing in a 100 Basis point Hike.
DX/DXY remain in a structurally sound uptrend, pullbacks are quite normal. Until the EU issues its
next rate decision on September 15th - the DX is free to roam about. It is important to acknowledge the
prior Highs were bested... this is important as it implies the 112s will be arriving in the near future.
Although the 10 Year is being permitted to lift in assisting the Yield Curve's reduced inversion, it's frankly
not a material concern as Yields continue to rise across the Curve.
FX Traders took the 6E (Euro) downtown below Par due to Economic conditions and not Rate Parities.
The NatGas to Crude correlations are disturbing - $410 - yesterday the Media upped it from $520 to $1000.
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Patience into Powell will be the best Trade imho.
Good Luck, the Bigger setup is 25 hours away ;)
Forget All Other ChartsIgnore all the other charts right now. They are based on DOLLARS. The dollar is permanently unstable and your imperialist overlords are here to take away your spending power. We're due to see bearish action similar to April 5th (pink dot). The question is, will we see a lower high in relative yields, or will we set a higher low and possibly become uninverted, and return above 1.0 once again? Consider that we just set a higher high in the S&P medium term and it could have simply been a move to fool the crowd. On the other hand, debt is at all time highs, and rates even at this level mean systemic insolvency. Raising rates further means quicker insolvency. I say just get it over with or don't do it at all. Inflation year over year is, realistically, 20-40%, each year since 2020. Key interest rates aren't even 10% of that. There is no way they will be able to control this in any way, shape or form, or manufacture a so called "soft landing".
Rates rise >1.0 = total collapse, then easing
Rates bounce <1.0 = unrealistic rally blow off top, more tightening to trigger the crash
I think I used too many arrows but hopefully it makes sense.
Good luck and don't forget to hedge your bets.
Not a silver lining.Silver is special as it is both an industrial and precious metal. So, let’s look at Silver from both points of view to identify what seems to be dimming the shine on this metal.
As a precious metal, we can compare silver with the dollar and yield as both affect the demand for precious metals. Dollar and silver are generally negatively correlated, with a stronger dollar leading to weaker silver. In the chart below, we see this relationship at play until the start of February 2022, when it started to weaken. It seems the effect of a rapidly strengthening dollar has not been reflected in the prices of silver and we expect this gap to close, resulting in lower silver prices.
The 10-year yield also provides us with a reference to understand where silver might trade at. A high yield environment is often considered headwind for precious metals as investors prefer holding yield-generating assets in such periods. In the chart below, we see can observe the roughly negative relationship between yields and silver, with periods of lower rates showing higher silver prices and vice versa.
With the Federal Reserve indicating that they are still not done with the rate hikes to combat inflation, silver might take a dent in upcoming rate hikes.
Secondly, we can look at business and consumer confidence to gauge the potential demand for silver as an industrial metal. Generally, higher business and consumer confidence indicate expansionary periods, which translate to higher demand for industrial metals. With the University of Michigan consumer confidence index at a low and United States Business Confidence Index turning lower, such negative outlook will slow demand for silver as a form of industrial metal, potentially adding resistance to prices.
On the technical front, silver is sitting right on the 19-dollar level, which has acted as a key support & resistance level over the past 10 years. An attempt to breach this level a few weeks ago was rejected and prices are now back to retest this support. On a shorter timeframe, we also see silver in a descending channel pattern indicating a downwards continuation pattern.
With the dollar strengthening, higher yields, and downbeat business and consumer confidence, the macro backdrop for silver does not look rosy. Overlaying that with the bearish technical price action, we think Silver is likely to struggle.
Entry at 18.960, stops at 20.160. Targets at 16.620.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
DXY's delayed reaction to yieldsI had this confusing idea and I will show it to you with this confusing chart.
1. First we define the blue vertical lines. These are the drawn on the date of the peak of yield.
( Even though yields drop, dollar continues to grow. Like a delayed reaction. Unsurprisingly, yields lead DXY growth. )
2. Then we draw fib retracements, with 1 being the DXY value at the time of yields peaking. And 0 being the bottom of the DXY jump. The peak of DXY is conveniently at 1.618. (or maybe I conveniently drew the chart such that 1.618 appears every time, to further validate myself)
3. When yields return to "normal levels" (red vertical lines), DXY dives.
The location of the red vertical lines, as well as what is defined as "normal yield level" are defined by the arbitrary target of 1.618 I put.
IF yields have already peaked, and if my theory is correct, DXY will reach 120, and when yields return to where they were. Even if the price target is inaccurate, the fact that DXY continues to grow after yields peak, cannot be ignored.
$NQ1! - What's next?NQ1! - What's next?
It's time to for PB as I stated at start of the week, imo it seemed over extended and I looking a LT positioning with NQ & ES at this moment of time 13250 for NQ is the next support areas. However, if we break above 13 and half areas, I will be re-thinking the idea of execution. We have DXY heading higher, and perhaps re-test highs on DXY. Overall, the key important information will be Jackson Hole.
TJ
Bond Yieds RiseBonds have fallen further, breaking down past 119'01 into the vacuum zone below. We are still hovering above 118'04, the next level of support, but the Kovach OBV is looking pretty bearish. We are starting to see some green triangles on the KRI around 118'20, but we should have strong support at 118'04 if current levels do not hold. If we can pivot, then 119'01 should provide resistance.
