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Yields

Bonds rolling over but what's up with $TNX?#Bond #yield has been moving well lately, but today. SO FAR, they're rolling over, and some hurting more than others. We've mentioned that steam has been running out for some time. Look @ the RSI negative divergence on almost all of the #yields 6M weakening. 1Yr RSI CRATERING. 2YR hurting & RSI DECIMATED It is at major support. TVC:TNX is the lone wolf. Must keep👀on this one to see how it plays out. See data posted. Did the 10Yr peak already?
TVC:TNX
by ROYAL_OAK_INC
2
How to position for yield curve un-inversions!It has been some time since we delved into the intricate world of interest rates and their prospective trajectories. With the yield curve experiencing significant movement in recent weeks, it's high time we reassess our stance. Following a staggering 500 basis points increase, we now find ourselves potentially nearer to the end of the rate hike cycle than ever before. The recent hawkish pause announced in the last meeting has left market participants on tenterhooks, pondering the future course of action in the ongoing battle against inflation. Given the downward trend in inflation and the possibility of at least one more rate hike, 'real' yields have ascended beyond the 0% level, as depicted in the chart above. Since the 2010s, real yields have consistently struggled to surpass the 1.2% level. However, the recent lower inflation prints place the 'real' yield at a new decade high of 1.25%. So, how does the yield curve inversion behave during periods of real yields? Interestingly, in three of the past four instances, the curve 'un-inverted' once real yields exceeded 0. Of greater significance is the yield curve's response after the Fed cuts rates. Since 1989, this has been a key signal of the yield curve un-inversion. Given this event's proximity and the current 2Y-10Y yield curve, we contemplate the optimal strategy to capitalize on this likely un-inversion. One approach is to examine all possible inversion combinations between the 2, 5, 10, and 30-year yields. All these combinations present an inverted curve, except for the 10Y-30Y segment. Upon dissecting the analysis to focus solely on 2-year inversions, we observe the following: The 2-year inversion is generally the steepest, with the 2Y-10Y ranking as the most inverted segment of the yield curve. All inversions anchored with the 2Y are at their all-time highs, plunging us into uncharted waters. In contrast, the 5-year and 10-year yields exhibit more subdued movements. Their inversions have yet to reach all-time highs, and the overall range of movement is relatively restrained. Therefore, to maximize returns on the un-inversion move, one could position to short either the most inverted section of the curve, the 2Y-10Y, or the 2Y-30Y, which typically experiences the largest movement upon un-inversion. Handily, CME has the Micro Treasury Yield Futures, quoted in yield terms, which allows us to express this view in a straightforward manner allaying the complications with DV01 calculation. By creating a short yield spread position, we are not merely speculating on the direction of individual yields but rather on the relative movement between them. Trading the yield spread instead of just an outright position in a single part of the curve also protects us from parallel shifts in the yield curve, especially in volatile times like these. This strategy takes advantage of the yield curve dynamics, particularly the inversion trend we've been observing. We create the short yield spread position by taking a short position in the Micro 2-Yr Yield Futures and a long position in the Micro 10-Yr Yield Futures or Micro 30-Yr Yield Futures to express the curve un-inversion view, with 1 basis point move equal to 10 USD. 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. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com www.cmegroup.com
TVC:US02YShort
by inspirante
Bond Yield Inversion vs. SPXThis is nothing new, really. People who have been in markets long enough know that when short term bond yields (3 month and 2 year, for example) come up to meet and invert to a higher yield than longer term bonds (like the 10 year, 30 year etc) that it often precedes a large market sell off as well as a recession that affects most everyone, not just stock prices. On this graph, I maybe got a little carried away. I have the 1 month, 3 month, 1 year, 2 year, 10 year and 30 year as well as the actual Fed Funds rate with SPX in the background. This goes back to the mid 1990s, you can see the dotcom boom, you see the yields invert, SPX tops and then takes near 3 years to finally find bottom before reversing course. Unfortunately for long only stock holders, the treasury yields started to climb with stocks as well until they inverted in 2007 once more. Stocks started to come down, and, well, then 2008 happened... You can see that in general, the fed funds and the shorter term yields find a plateau at their top, tend to stay there for awhile (sometimes for a whole year), then as they start to come back down, the stock market tends to be near its highs, and then the stock market starts to come down. Big money tends to see higher treasury yields as a safer haven for their money than stocks at this point. If you have the ability to hold the treasury to expiration, you're guaranteed to get 100% of the money back plus whatever the yield % was at time of purchase as interest paid to you by the government. Furthermore, there is an inverse relationship between bond yield percentage going up, and the value of bonds on the open market. As yields go up, the value of bonds goes down. Vice versa, as yields start to retract, bond values go up. So, there is high incentive to start buying a lot of bonds as the rates plateau near the top. Maybe some of these large hedges start to sell some equities as a hedge and buy more bonds as we get to that point. Rebalance their portfolio to be more bond-heavy. Higher short term yields, higher fed funds rate also generally mean that the cost to borrow money for anyone is higher. Higher interest rates means more money out of the pocket of anyone borrowing to pay interest. Bonds themselves are just government debt. The stock market is generally forward looking, so it's often making moves in response to moves in the bond market before main street really starts to feel the effects of the tightening in a meaningful sense. As time has gone on, it seems the market is reacting earlier and earlier to rate hike cycles. Take 2018 for example, the yields didn't really invert until they all were already on their way back down. 2018 had volmeggedon to deal with to start the year, then came back, set a new high, then had a very rough second half of the year as bond yields plateaued. But, as the market saw that this small rate hike cycle didn't do any meaningful harm to the economy and started retracting, stocks took off again: Then COVID happened, yields plummet, cost to borrow was as cheap as it ever has been, the government pumped money everywhere to try and prevent a complete collapse of everything, stocks were off to the races harder than ever before after finding bottom just a few weeks into the pandemic. But, mentioning the market kind-of getting ahead of itself again, we had all of 2022, as it became apparent that inflation was now raging and bigger rate hikes than we've seen since the Great Financial Crisis would be necessary, the stock market sold off despite the economy still showing very solid recovery out of the pandemic. But now, treasury yields are still climbing, but so are stocks. Treasuries hit a little hiccup in March as a couple regional banks were found to be overlevered in treasuries that had too low of a yield, and as more people began withdrawing money and those banks needed liquidity, they had to sell those treasuries at a loss. If they didn't have to come up with that liquidity and were able to allow those treasuries to mature, they make that small percent of interest for holding them. But because they were forced to sell them as treasury values were at a low because they had inadequate liquidity to cover deposits being withdrawn. But, now maybe surprisingly, despite some of the troubles and the market sell off for most of 2022, we're now not all that far off of CBOE:SPX 's highs from the end of 2021, start of 2022. But, we still don't know what the full effect of the current high interest rates are going to be. It's possible the old mechanism where when we finally reach the top for interest rates, right as we get the precipice of rates starting to fall, equities top out and start to sell off shortly thereafter again. For how big and how long? Who knows. Despite the recent 'skip' from the federal reserve, opting to not hike at the June meeting, the 3 month yield, which typically is what most closely matches/leads what the fed is going to hike to, has in recent days made it look increasingly likely that we see at least a quarter point hike for July. The market probably won't like that news, maybe we get a few red days, but if economy data coming in still looks solid and inflation is showing a slow, steady reduction, it may not be long before the market decides to go back up again. We might even go past the 2021/early 2022 highs this year. But, eventually, we'll find the top for yields, and I have a feeling a bigger correction for stocks will loom at that point. For right now, seems like a bad idea to go against the bulls. But, keep an eye out for when we finally reach the top in treasury yields, look in particular for the 3 month, fed funds and the 2 year to go sideways. Once all 3 start to go down, pay closer attention to economic data coming in. Also take a look at www.tradingview.com for evidence of lower highs off the lowest point for the current cycle. You see the combination of the two, we may be in for a big correction. Again.
TVC:US03MY
by dieseldub
$TNX in range and a comparison of Yields around 2008#Yield is moving well today. 1Yr is bouncing back better than 2 and 10Yr. $TNX is not bouncing as much but has not sold off as much as the others. The 10Yr is trading between 3.80 - 4.08. Did we see the top in short term #yields a few days ago? 10Yr on the other hand did not break the most recent high. Interesting to say the least. The last picture shows the highs of the 2 yr and 10 yr right before the crash of 2008. Interesting that almost everything happened in the month of June. Even when it was 3 different years! Hmmm. *** Now let's compare what yields did around the 2008 crash. *** The 2yr yield peaked @ 5.28% and it did it much earlier. It was almost 2 years before the 10Yr yield did. The 2yr also formed a lower higher in 2007 (5.13%) & peaked in June 2008, much lower @ 3%, before the real crash happened. The 10yr didn't peak until June 2008. way after short term rates peaked. We also see that the peak was around 4.3%. Stocks peaked in Oct 07 and the lower high was May 2008. *** We are seeing something similar today. However, IMO everything happens faster today. We're keeping a close eye on lower highs in short term yields and we could be seeing this now. Time will tell. This data is just like other data. Just past info to help weather the current & future storms.
TVC:TNX
by ROYAL_OAK_INC
8
Yields are mixed but all point higher, history repeating?🚨🚨🚨 Going to make a stink about #yield again. Short term #interestrates have been creeping higher. Let's👀@ #bond Yields. 6M = holding steady, trading slightly higher. BUT, 1Yr = BROKE RECENT HIGHS. It's at resistance but shows momentum. 2Yr = Closing in on TSX:SVB closure high. This is where #banks began to break down. 10Yr TVC:TNX @ current downtrend is being tested. Break through is good. HUH? Higher = good short term for #stocks. Markets have a history of breaking AFTER rates begin to trade lower and yield curve normalizes. This can take a year or so. Not saying markets will be pumping for a year. Just saying this is historical. We could be setting up for much more upside but with RISK. We posted on the 2008 yield crisis some time ago.
TVC:TNX
by ROYAL_OAK_INC
Yields are Yelling: Recession is comingIt looks like we are turning over. Coupled with gigantic short positioning of speculators on bonds (highest in history bsed on the COT Data), the chart indicates that yields will fall again. Why would they fall? Because of a flight to saftey and/or a recession. I am keeping it very simple, I just buy Bonds via ETF. I am long TLT, IEF and SHY. With that trade, I am also long USD, since my native currency is EUR. If we have a weekly close above 3,5% on the US10Y, I will exit my positions. It might also be lucrative to go short stocks now, but I wont do that too much. This might be a great trade, but I am viewing it as a set up for an even better one. We might get a great opportunity to buy stocks soon.
TVC:US10YShort
by Cyranus
2
The most important chart...What are the conditions we need for a crash? In my opinion we need to see these conditions coming together before we can say that we are in a crisis environment. History showed us that before we had a crisis we 1. first saw the yield curve (US 10 year bond yield - 2 year bond yield) inverting. 2. then we saw the unemployment rate rising. 3. the yield curve steepend again. Then the SPY had a significant correction or a crash. So currently one of three conditions are active. The inverted yield curve. Unemployment rate is slowly rising. The market is still very strong. Don't step infront of a high speed train.
SP:SPX
by Cashflowjaque
1
Inflation, Yields, and FOMC in Focus This WeekS&P 500 INDEX MODEL TRADING PLANS for MON. 06/12 The precarious rally of the last month has been baffling many with its lack of the breadth - the rally concentrated in just a handful of big-tech names. In the last trading plan - published on Thursday, 06/08 - we wrote: "If the rally does not dissipate this week, then it could be indicative of yet another leg up that could obliterate the shorts". The rally did NOT dissipate last week, but rather accelerated. With heavy economic calendar this week culminating in the FOMC rate decision on Wednesday, the focus will be back to the inflation and interest rates (potentially being confirmed as not a concern anymore, IF the FOMC pauses rate hikes as widely expected). Any concerns of potential recession seem to be not on the market radar for now. As can be expected, our models are flashing heightened probabilities for spikes in both directions, with no clear directional bias yet. As we first stated to start this week, if you are a bull, it may be prudent to take some profits off the table; if you are a bear, you might want to wait for confirmation of downside bias. Positional Trading Models: Our positional models indicate no trading plans for today, as they are in an indeterminate state. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today. Aggressive, Intraday Trading Plans for MON. 06/12: For today, our aggressive intraday models indicate going long on a break above 4323, 4305, or 4275 with a 9-point trailing stop, and going short on a break below 4320, 4302, 4297, 4290, or 4270 with a 9-point trailing stop.  Models indicate explicit short exits on a break above 4314, 4299, or 4293. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:46am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #softlanding
SP:SPX
by TradersAIDotCom
Markets Celebrating the Obvious? Day 2S&P 500 INDEX MODEL TRADING PLANS for THU. 05/18 Our stance last couple of weeks has been: "Our models are indicating an initial bias towards an inflection point coming soon. Barring any unexpected bullish development showing up on the horizon, chances are that this could be unwinding to the downside". Looks like potentially arriving at some kind of agreement on debt ceiling and avoiding a potential U.S. default is being masqueraded as that "unexpected bullish development" (which almost everyone expected anyway). Whether this move is going to be the start of the next leg up or to be a classic pump-and-dump remains to be seen. For now, the force appears to be with the bulls, possibly aided by the squeeze of retail, leveraged shorts. Positional Trading Models: Our positional models are flashing a potential bull trap ahead if this morning's move up proves unsustainable. Models indicate going short at the close if today's close is to be below 4147 (activated at 3:59pm). If opened a short, models indicate instituting a hard stop at 4187. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today. Aggressive, Intraday Trading Plans for THU. 05/18: For today, our aggressive intraday models indicate going long on a break above 4187, 4176, 4165, 4155, or 4143 with a 9-point trailing stop, and going short on a break below 4183, 4173, 4151, or 4138 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4161. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:16am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #regionalbanks, #debtceiling
SP:SPX
by TradersAIDotCom
TLT - Intermediate BUY Set-UpHere is my road map for TLT... T-Bonds This will have significant ramifications across many correlated markets. Think ES, DXY, Gold etc... I believe we close to embarking on a C wave move up to the opposing upper channel line. This could take on a variety of shapes/slopes. Time will tell. The bigger move ahead is down... although the move ahead will be worth participating in. See my published ideas linked below covering TBonds yields and ES/SPX pathways related to this supposition. Weekly view of TLT here:
NASDAQ:TLTLong
by oliverrathbun
US 10 Year Yield On The Cusp of Breaking DownThe 10 Year Yield has been trying to hold this B point level as Support for the longest time but everytime it tries to bounce it gets pushed right back down and in the most recent try we saw it come up to test the moving averages while it Bearishly Diverged and began a Death Cross. If we can get a serious BAMM Breakdown from here it coulkd go down all the way to 1.4% which would likely coincide with a huge decline in the DXY and a rise in the stock market.
TVC:US10YShort
by RizeSenpai
1
US10Y: Last dip before a medium term reboundThe US10Y is trading inside a Channel Down ever since its market peak on October 21st. The 1D technicals are neutral (RSI = 54.601, MACD = 0.300, ADX = 17.030) giving a mixed tone to the price action but based on the December-January Lows we can see the the Channel Down has one last dip to make before it bottoms and rebounds on the medium term. We will wait for that pullback around 3.250 and buy targeting the 0.618 Fibonacci (TP = 3.750). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:US10Y
by InvestingScope
1