20 Year Yield: Bullishthe 20 year yields has also recaptured all of the key daily moving averages.
The yield charts on the weekly and monthly chart look ridiculously strong.
Yields
30 year yield: Bullish as everThe long end yields have been climbing recently and many stock market participants are not recognizing this.
The long end yields market may be signaling to us that inflation is going to be entrenched longer than what mainstream experts are calling for.
On a technical basis the 30 year has now recaptured all the key daily moving averages and looks primed to head higher.
Market correlationI'm testing this correlation and looking at the bounce-up for the 10-year yields
To buy indices and sell gold, let's see :)
Let me hear from you..
TLT H4 109/110 To Break On Next Test Targeting 116In this update we review the recent price action in #TLT and identify the next high probability trading opportunity and price objectives to target
Fed v.s Market: the fight may last for a whileAfter the Non-farm payroll event last week, which saw 236,000 jobs added through March, it is clear that the job market is still creating many jobs compared to pre-COVID levels. However, the market has been experiencing some short-squeezing from yields to the dollar.
The reason for this short-squeezing can be attributed to the mispricing between Fed fund futures, which are giving a dovish perspective beyond May, and the Fed's view from its last meeting, which hinted at least one more rate hike.
However, with two holidays in a row right at NFP last week, the short-squeezing action was impaired after the news, and the market quickly came back to price in the CPI tomorrow, as well as retail sales on Friday. The Fed fund futures dropped a few percentage points for a 0.25% chance of a rate hike in May and the dollar also retreated.
While tomorrow's CPI's headline may slow down and be close to the market forecast with a 0.1-0.2% m/m gain due to some correction from the energy price for the period back then, the service and rental costs are back, and they will continue to haunt the core CPI, which may print a 0.4-0.5% m/m gain for last month.
From this perspective, the market is likely to price in the headline instead of the core, as the media would cover that number more, and it may continue to extend the mispricing between the Fed fund rates and the reality that the Fed may continue to have at least one more hike provided a still-hot labor market and stubborn inflation.
Another reason for expanding the mispricing is retail sales on Friday, which may not meet expectations and give the market another reason to beg for Fed to ease. However, it is unlikely that the Fed will reduce that soon. Remember how eagerly people talked about a 0.5% rate hike for the last meeting before the banking crisis? It has only been a few weeks since the latest news on the bank, and things are calm, and the Fed is confident in containing liquidity issues.
So things will be back on track, along with Fed's hiking. The more mismatching there is between the market's expectations and reality, which the Fed may continue to do, the more significant the opportunity when going against the crowd. In short, the yield will gradually come back, provided that the banking crisis is over and there are no more or fewer deposit drains. Then, the other assets follow the yields then.
HD: bearish breakdown or Bullish reversal?HD has broken support but has not completely broken down yet.
HD bulls need to recapture the orange trendline on a weekly close or else the bearish trend will break the 200 Weekly MA.
XLU outperforming...What you need to know. When the XLU outperforms the broad market, you better be taking note as an investor or trader.
What does it mean when Utilities outperform the S&P500?
The better question to ask is why do people buy Utilities?
We have informed our members of this important signal and why its critical to understand this price action.
A hint, most investors buy Utilities for Yield & protection .
US10Y: Rising short term inside its Channel DownThe US10Y is trading inside a Channel Down on the 1D timeframe with the 1D technicals neutral (RSI = 46.172, MACD = -0.046, ADX = 31.478). With the 1D RSI coming off an accumulation that we've seen on the December and January bottoms, we expect the price to rise and approach at least the 0.618 Fibonacci. Our TP = 3.750.
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Trade Idea: AVB looking weakAVB has a death cross that is approaching.
This pattern still favor's a near term bounce but will likely resume its longer term downtrend once buy the dippers are exhausted.
This is a trend that is not your friend.
Capital One....technical Breakdown loomingWith major weakness in the banking sector we are still seeing the contagion play out. Some banks are more at risk than others.
Based off of a blow out in Credit Default Swaps. The bond market is showing there is tremendous risk in this bank.
Just like Credit Suisse CD's blew out befroe the collapse, we are watching COF credit defaults blowout.
#UK 10Y Yield tests it 200-day maYet another example of a market mean reverting to its long term 200-day ma at 3.13 and attempting to stabilise.
We have seen SVB collapse and UBS take over Credit Suisse and during this market turmoil, as at other times, we are likely to see markets mean revert to their long term moving averages - particular attention should be paid to the 200 and 55 week moving averages.
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$TNX is weakening, no longer holder better vs short term Yields$TNX has held better than short term #yields but could this be changing now?
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The 2yr & 1Yr are holding.
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Of course, it's early in the trading day so we'll see tomorrow morning how things go.
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In reference to the post last week on #yield in 2008, we need to keep an eye on TOPS in these #bond yields.
It took 1 year at that time before there was a lower high. IMO will happen MUCH FASTER. Perhaps 6 months tops, no pun intended. :)
#stocks #cryptotrading #rates #interestrates
QQQ/Nasdaq Breakout?Are we about to witness a technical breakout in the QQQ?
Yields have softened, Disocunt window opened, heading into options X...lots of catalyst to rip higher.
However Tech is overbought and into technical resistance.
Dollar & VIX ripping, Yields cratering, Stocks fallingGood Morning!
We've been mostly cash when it comes to #stocks. Been defensive as we have #GOLD #SILVER #BCH #BTC (#crypto #altcoins in personal) some $VIX & some bigger VALUE names, added some more today $AMGN $VZ as examples.
We've reduced the exposure as the direction seems south but anything can happen.
FEAR is the word. #Dollar ripping again & bond buying.
$DXY looks good & bounced off of support.
Look @ yields CRATERING again.
1Yr & 2Yr #yields COLLAPSING!
10Yr HOLDING MAJOR SUPPORT & back at level it was 2 days ago.
We noticed something some time ago & will post soon.
$VIX is trading in a new range now & closing in on the TOP part of range. 2 things can happen here. Either we rip through, likely causing a COLLAPSE in #stockmarket OR IT pulls back to the 23ish range and keep in this new range & fear eventually subsides.
TLT 600point Pop From Previous Pattern, What Next?In this update we review the recent price action in the TLT etf and identify the next high probability trading opportunity and price objectives to target
$TNX Bouncing nicely as are shorter maturity YieldsWas kind of expected to get some bounce from #Bond #Yields.
The last two days, especially yesterday, was RARE in yield price action. It happens but it's rare.
The buys could have been investors trying to take advantage of higher rates being that they are "expecting" the Fed Reserve to lower rates.
We mentioned that most yields, when we posted, were at or close to support levels.
So the bounce we are getting today is not unexpected. Furthermore, the gap from two days ago attracted and it is filled today.
$TNX was also oversold.
Yields from here are tough to gauge but likely go a bit higher.
Biggest Drop since 2008 - Right After our Post 🙄Good that I always TRUST my Charts:
US Government Bonds 10 YR Yield has dropped 'nicely' since my last post, which was 'against the stream' since when i posted it Powell was being extra-Hawkish and situation was different.
News:
The yield on the 2-year Treasury note fell sharply on Friday as the shutdown of Silicon Valley Bank sparked a flight to safer assets such as government bonds.
The yield shed at least 46 basis points over a two-day period, a sudden decline not seen since September 2008 , when the markets were in the throes of the global financial crisis. Perhaps by no coincidence, the flight to bond safety this week was caused by the biggest bank failure since the financial crisis.
These were supposed to be 'Good news', rates could ease and markets (and crypto) could do better but unfortunately it all happened for the wrong reasons: Some Banks going bust.
Better check my other posts today.
Everything changes FAST so watch out for the CPI tomorrow: If inflation is better the Feds are saved...if inflation persists we could ALL be in DEEP trouble.
One Love,
The always optimistic Professor
So... Recession Confirmed?
With oil breaking bullish support, it's safe to say that demand has been cratering around the world. As Jeff Snider has discussed for months now, if the supply constraints on oil aren't driving oil higher, then there must be a serious demand problem. Overheated economy? I think not.
Add to that Gold up and Yields down and that means low growth + low inflation. Also not good.
So what's the trade?
Well, I think we might be at the start of what Alex Gurevich has called the mother of all bull markets in bonds. Some of these options on bonds could pay out 10x to 20x (i.e., eurodollar futures, SHY, TLT, etc).
Interesting times to live in.
Side-step a potential storm!Just when we thought the hawkish narrative was pretty much priced in, SVB’s fallout basically threw a spanner into the hiking cycle.
You’ve probably read quite a lot about the whole SVB debacle since Thursday’s trading session so we won’t harp on that. We instead want to turn your attention to two other markets that moved significantly since the SVB episode. Interest Rates & Gold.
A sharp repricing has occurred in the expected rate path as markets digest the onslaught of SVB-related events. As a result, we saw the probability of a 50bps point hike jump from 30% to 80% and then back down to 20% as of today.
Additionally, further rate hikes have also been priced out indicating market’s expectations of a more cautious Fed. Most importantly, the implied aggressive rate cuts starting from the end of 2023 caught our eyes here.
As a reminder, the last time the fed paused and then cut rates, Gold responded with a 60% rally. As the potentially lower terminal rate and faster pace of rate cuts narrative begin to pick up momentum, we think Gold deserves more attention now than ever. The next FOMC meeting is only 10 days away. From there, we will get a sense of what the Fed thinks of the current situation. If they start to show signs of retreat from their hawkish stance, we believe it will be a catalyst for this trade.
Another point of worry is economic data still coming in hot, at least for now. For those not keeping count, Non-Farm Payrolls numbers have beaten estimates to the upside for the past 11 months as the economy remains unusually strong. With the next set of CPI numbers coming out this Tuesday, a hot print could drive inflation worries further. If the Fed shows signs of easing on the hawkish narrative while Inflation numbers continue to be hotter than expected, higher Inflation expectations could once again drive investors into inflation-protecting assets like Gold.
Key volatility gauges have pointed higher over the past few days and major indexes have edged closer to key price and technical levels. Given these, volatility is likely to compound from here as Commodity Trading Advisors (CTAs) potentially flip sides and funds rotate out of the banking sector.
In such uncertain times Gold’s status as a safe haven asset could attract flows as investors sidestep the market turbulence.
Looking at the price action, Gold still trades well clear of the 500 Day EMA mark which has marked the support for the price action and well clear of the 1800 physiological level. RSI is still middle of the road indicating that there is still room for Gold to run higher.
Gold’s relationship with interest rates and position as an inflation-hedge/safe haven asset could very well position it for further upside from here. For now, we think it provides enough upside to sidestep the potentially volatile times ahead. We set our stops near the previous level of support and the 0.618 Fib level, 1755, and our take profit levels at 2065. Each 0.1-point increment in COMEX Gold future is equal to 10 USD.
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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.
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SIVB Meltdown- Canary in the Coal mind?Today we saw a systemic risk in the financial sector. The regional banks were hit extremally hard and as a result the Major banks saw sell side liquidation.
Where there's one cockroach, there's usually another.
Risk in the banking sector is the worst type of risk investors can ask for. Credit liquidity crisis is not something to mess around with.
SIVB looks like its in serious trouble potentially being exposed to fraudulent crypto loans that will likely default as well as failed speculative startups in the tech and health care space.
Japanese have been selling bonds, have Yields peaked for now?One of the reasons US Treasuries, and other bonds, have been selling off is the dumping by Japanese investors.
All duration #YIELDS have done well but more so the shorter term. The Inverted Yield Curve has widened over the last few months but has been significantly lately.
However, today we see the 1 & 10Yr ($TNX) selling off but the 2 Yr is CRATERING! Interesting.
Also interesting is that volume has been waning for investment grade and high yield bonds. Liquidity could be an issue later on if this continues.
Quick analysis on Switzerland 10Y BondsGood afternoon Swiss investors, today I made an analysis on the Switzerlnd 10 Year Government Bonds Yield, it shows that it's too early to put your money on the market since we're waiting for it to cross the golden point to see whether you put your money on it or no.
For any more analysis on a specific market don't hesitate to ask and I'll be answering with pleasure.
