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Predictive Correlation the SG10Y Bond Yields on S&P500I have posted about this correlation previously. Perhaps this time it might be clearer to see... This uncanny correlation between the SG10Y Govt Bond Yields as a leading indicator for the S&P500 was noticed some time ago, and tested since. As shown, the major turning points were seen in trend changes of the SG10Y GBonds first, before the S&P500 reacted. The vertical time markings show when you would short or long depending on the trend breakouts of the SG10Y GBonds (see lower panel, blue line), Comcomitantly, comparing what happens from that point, you can see the S&P500 in the upper panel with yellow line. The lowest panel is the MACD... and this shows the correlated pattern of a (lagging) technical indicator. Since 2023, there are at least six instances with 100% hit rate. Now... that brings us to TODAY. It appears that we are given advance warning of the next couple of months. For now, there should be a quick pop up to the very recent high followed by a failure of support in the S&P500; and then the expected trends should play out...
TVC:SG10YShort
by Auguraltrader
10Y - 02Y outlookMy recent assessments have been negated. I am mostly skewed to the idea it will break negative again, correlating to sentiment fuel for the blow off top in the SPX (no recession sentiment short term?). Once it flips negative again, to back test the purple bull penant, I strongly expect that to correlate to the markets topping and will potentially exit if I see further confirmation across other instruments. Reason for exiting prior to it flipping positive again if it goes negative, is because my research has shown me when the 10-2 yield spread is truly trending upwards to break 0%, the market falls with it, as I imagine "smart money" will know what's coming and exit. Not financial advice. Just my prediction for now.
TVC:US10Y
by pleasedApple81507
DRUCKENMILLER TIPS: Shorting Bonds and MoreInvestment Strategy Stanley Druckenmiller, a renowned investor, shared his market insights at Grant's Annual Fall Conference. He revealed that he is shorting U.S. government bonds, representing 15% to 20% of his portfolio. While he is unsure when these bets will materialize, his strategy is based on the perception that inflation could return to levels similar to those of the 1970s. Disinterest in China Druckenmiller also expressed disinterest in investments in China under Xi Jinping's leadership. This view contrasts with the recent trend of many investors betting on the Chinese market following the People's Bank of China's economic stimulus. Rather than following this trend, Druckenmiller is skeptical about the sustainability of the rally in the Chinese market. Opportunities in Japan and Argentina Despite his caution towards China, Druckenmiller was optimistic about Japan and Argentina. He believes Japan could offer attractive opportunities for investors, given that the Japanese economy has shown signs of recovery. As for Argentina, he praised the new president, Javier Milei, describing him as a “brilliant leader,” which has sparked investor interest due to his liberalizing economic policies. Focus on Natera Currently, Druckenmiller has focused its attention on Natera, a genetic testing company that has experienced a remarkable increase in value, highlighting a 191% growth in the last year. This choice reflects its strategy of seeking companies with high growth potential in innovative sectors. Fiscal and Political Perspective Druckenmiller, famous for shorting sterling during “Black Wednesday” in 1992, maintains a cautious approach to fiscal policy in the U.S. He declines to vote for the major political candidates, Kamala Harris or Donald Trump, noting bipartisan fiscal recklessness as a key concern. Conclusion In summary, Druckenmiller's investment strategy is characterized by a skeptical approach to the U.S. bond market and Chinese equities. In turn, it shows interest in economies such as Japan and Argentina. As the global economic outlook becomes more uncertain, his ability to anticipate market movements and adjust his portfolio accordingly remains critical to his success as an investor. Ion Jauregui – ActivTrades Analyst ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
TVC:US10YShort
by ActivTrades
US 10Y TREASURY: pricing the PCE easingThe inflation measured through the Personal Consumption Expenditure Index showed signs of further decrease in August. The Index was standing at the level of 2,2% on a yearly basis, which was a bit lower from market expectations. The US Treasury yields eased after the release of data, bringing the 10Y US benchmark to the level of 3,75% as of the end of the week. During the first half of the week, the 10Y yields were exploring higher grounds, reaching the highest weekly level at 3,82%. At the same time, released final GDP Growth data for Q2 showed no changes on a quarterly level of 3% growth, which pointed to investors that the US economy was growing in a moderate pace in the environment of high interest rates, and that further drop in interest rates will be supportive for the boost of the economy in the coming period. Current charts are pointing to a probability for further easing of the US yields in a week ahead. The non-farm payrolls are set for a release, which might bring back some modest volatility on the markets. Still, some significant moves in yields should not be expected. The levels around 3,7% might be tested in the week ahead.
TVC:US10Y
by XBTFX
US02Y/US10Y Uninversion & RecessionsThe dynamics of the US Treasury yield curve, particularly the spread between the 2-year and 10-year yields (US02Y/US10Y), have long been studied as potential indicators of economic health. One phenomenon that garners significant attention is the inversion and subsequent uninversion of this yield curve. Lets delve into what these terms mean, their historical significance concerning recessions, and how investors might interpret these signals. What is the Yield Curve? The yield curve is a graphical representation showing the relationship between interest rates and the maturity of US Treasury securities. Typically, longer-term bonds have higher yields than shorter-term ones due to the risks associated with time, such as inflation and uncertainty. This normal upward-sloping curve reflects investor expectations of a growing economy. Yield Curve Inversion An inverted yield curve occurs when short-term interest rates exceed long-term rates. Specifically, when the yield on the 2-year Treasury note surpasses that of the 10-year Treasury bond, it suggests that investors expect lower interest rates in the future, often due to anticipated economic slowdown or recession. Historically, an inversion of the 2-year and 10-year yield curve has been a reliable predictor of upcoming recessions. Before the last several recessions, the yield curve inverted approximately 12 to 18 months prior. An inversion indicates that investors are seeking the safety of long-term bonds, driving their prices up and yields down, due to concerns about future economic conditions. Uninversion refers to the process where the inverted yield curve returns to a normal, upward-sloping shape. While an inversion is a warning sign, the uninversion phase can be even more critical. In many cases, recessions have followed shortly after the uninversion of the yield curve. This occurs as the Federal Reserve may begin cutting short-term interest rates in response to economic weakness, causing short-term yields to drop below long-term yields again. The uninversion can signal that monetary policy is shifting in response to economic stress, potentially validating the recessionary signals that the initial inversion suggested. The uninversion of the US 2-year/10-year yield curve is a critical event that has historically preceded economic recessions. By understanding this phenomenon and considering it alongside other economic indicators, investors can make more informed decisions. It's important to approach such signals with a comprehensive analysis and a prudent investment strategy that aligns with individual financial goals and risk tolerance.
TVC:US02Y
by kesor6
US10Y Look for a 1D MA50 rejection.A month ago (August 21, see chart below) we argued why the U.S. Government Bonds 10YR Yield (US10Y) would go lower with the Fed having no choice but the cut the Interest Rates: Well the Fed did it and cut the rates not just by -0.25% but -0.50%, initiating the new cut Cycle. Now let's look at the US10Y's price action on a smaller time-frame, namely the 1D. As you can see the pattern is a double Channel Down, with the price trading below the 1D MA50 (blue trend-line) since July 03 2024. That is the current Resistance and until it breaks (1D candle closing above it), we should be looking every time for a sell near it. Assuming the Bearish Legs of the diverging (dotted) Channel Down are symmetrical like those of May and June, our Target is 3.450%, representing a -10.50% decline (same as August's Bearish Leg). ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10YShort
by TradingShot
Five Market Correlations You Can UseAs a trader, I've discovered key market correlations that provide valuable insights. Here are 6 you can use: 1️⃣ US Dollar Index & Commodities (DXY & Commodities ): The US Dollar Index often moves inversely to commodities like gold and oil. Monitoring this correlation helps gauge potential moves in commodity prices based on the USD's strength or weakness. 2️⃣ S&P 500 & Volatility (SPX & VIX): The S&P 500 and the VIX (CBOE Volatility Index) exhibit an inverse relationship. A rising VIX indicates higher market uncertainty, influencing my risk management decisions when trading the S&P 500. 3️⃣ Bond Yields & Currency Pairs (BondYields & Forex ): Strong correlations exist between government bond yields and currency pairs. Higher bond yields may lead to a stronger currency, and vice versa. This correlation helps in forex analysis and trade setups and we use it in our program's bias matrices. 4️⃣ Crude Oil & Transportation Stocks (CrudeOil & Transportation ): Crude oil prices and transportation stocks, like airlines and shipping companies, often move together. Understanding this correlation provides insights into both oil demand and economic trends. 5️⃣ Gold & Real Interest Rates (GOLD & InterestRates ): Gold is often influenced by real interest rates (nominal rates adjusted for inflation). When real rates are low or negative, gold tends to perform well as an inflation hedge. 6️⃣ USD/CAD & Oil Prices (USDCAD & Oil ): The Canadian dollar (CAD) is sensitive to oil prices due to Canada's significant oil exports. As oil prices rise, USD/CAD tends to fall, and vice versa. The Norwegian Krone (NOK) also exhibits a similar behavior at times. By recognizing these correlations, I make more informed trading decisions and anticipate potential market moves based on the pre session biases. I also keep a close eye on updated correlation matrices in case any have de-coupled recently. Utilize these insights in your trading arsenal to gain a competitive edge!
Editors' picks
TVC:US10YEducation
by AlexSoro
5
US 10Y TREASURY: surprising 50 bps cutAlthough markets were divided on whether the Fed will cut interest rates by 25 bps or 50 bps at their September meeting, still, the Fed brought some sort of surprise by cutting interest rates more aggressively, by 50 bps. Considering Fed's dual mandate, to keep inflation at targeted levels and a stable jobs market, the analysts are now noting that, with the latest rate cuts, the Fed switched attention to the US jobs market. The US yield reacted to the Fed's decision in a mixed manner. Still, the 10Y US yields turned to the upside, despite Fed Chair Powell's comment that more rate cuts are coming till the end of this year. The 10Y US yields reached the lowest weekly level at 3,6%, and soon reverted to the upside, ending the week at the level of 3,74%. While digesting Feds comments, the market is currently seeking an equilibrium level for the US yields. Based on current sentiment, there is some probability that yields might shortly revert back toward the level of 3,8%. However, on a longer time scale, the trend for 10Y US yields is on the downside.
TVC:US10Y
by XBTFX
Long Term - US 2y with SPYThis 2 year plan is explained below. Chart = US 2 year on the top // SPY on the bottom To understand my charting and thought process, if you wish to, it’s best to start with the macro idea here. I’m tracking the US2 year yield. The peaks in ’89, ’00, ’06, ’18 and ’23 have created overturned cycles leading into recessions. Sure, the 2023 peak has not yet resulted in a confirmed - back dated - recession but the data is thick enough to predict one in my opinion. I think an equally important point here is to understand that putting a chart together with as much information as you can on an encompassing idea over a longer period of time is beneficial. It is to me anyway. I’ve chosen to focus on the largest market in trading…the bond market. So that being said, it’s probably best to just explain the lines and y’all can make your own conclusions. Ingredients: Vertical Lines Red = SPY market tops. And note the following % loss Green = SPY market bottoms that note the following % gains (it’s hard to read yes…anyone can build the chart and see the #’s if they want) Black = when a recession was officially declared. It’s always too late…FYI😊 Purple thick = when a 50bps reduction was mandated during FOMC. What I think is interesting here is that a -50bps cut happened 4 times during the ’07-’08 GFC, 9 times through the DotCom era and even 3x in the early 90’s. We’ll see a few more -50 in 2024-25 for sure and when interest rates are at 3.75-4.0 I’ll be mostly out of equities I think. If 2y doesn’t dead cat bounce from here I’m looking at as early as Q1 2025 to exit. The rest is self-explanatory. Bond yields are getting ever increasingly more volatile // 370% swing low to high post Dot-com to 5000% post covid to 2023?!. WTF…lol. We can see it clearly in the RSI. S&P is getting more volatile since 2018 too. Nice for trading but not ideal for recent long term investors. Horizontal Lines Blue = the bottom channel-ish on the 2y yield. It’s my own idea, so take it with a grain of salt please. I’ll be borrowing money at 1.5% or so in mid 2026 and going long AF. Of course as the charts evolve the thesis may get massaged but as an overall macro trend I don’t see a flaw in it yet. I think that’s it. Stay well traders and all the best. MR
TVC:US02Y
by Mr_Robbers
US10y-US02y Yield Curve Reversion - Watch StocksUS 10y and 2y yield curve has reverted (i.e. is no longer inverted) and historically this has been a bearish signal for stocks in the months ahead. Whilst stocks have continued to gain for a few weeks to months, ultimately there seems to always have had a precipitous drop to follow. Keep a solid cash position and potentially look to hedge longs moving into October/November and onwards. These drops have presented FANTASTIC buying opportunities, but ultimately you can only buy if you have dry powder set aside.
TVC:US10Y
by Profit_Link
Lower Rates Expected by 9/27/24Ahead of the Fed meeting Wednesday the market was pretty much 50/50 split on whether the fed funds rate would be cut by 25 or 50 basis points. After the 50bps announcement the counter intuitive move occurred, which was rates began rising, but this should have been a surprise. This was as straight forward "buy the rumor, sell the news" gets. Today however it appears the rates attempted to rally past 3.76% but failed. 3.76% happens to be the 50% fib level from the recent highs to lows and now we'll look to see the 10-yr break below 3.70 for a sustained move lower. Marking this as a "Long Investment Idea" since lower rates imply higher bond prices, don't be fooled by the rate chart.
TVC:US10YLong
by jpoma13