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ZB1! trade ideas

Bonds Strategy go short if PercentR is above 15 No investment advice but Larry Williams traded the Treasury Bonds pretty good in 1987 by relying on indicators like PercentR Look for his trading record where he turned 10k into 2 mil by end of september 1987 with trading bonds and S&P 500. On the Chart you can see his 1987 entry dates but applied on a 2021 chart, so there are plenty of opportunties to apply his strategy this year. Obviouly the short entries if PercentR indicator was above -17 are only one part of the equation. Position sizing is key, larry started with 1 contract but quickly went to 5,10, 50, 100 contracts to archive a 10.000%+ performance. Going Long if PercentR is below -80 is also an option but first there needs to be an uptrend in place. Back in 1987 larrys biggest winning trade was 1328$ profit per contract (280 contracts closed on 9th september) Keep in mind that his biggest loosing trade was with 400 t-bonds on 19th october (629k loss) To avoid bigger losses any strategy should be seen as a setup on a daily chart but then on the lower time frame you can place a much more reasonable trade with a pre-defined stoploss level.
CBOT:ZB1!Short
by responsibletrad8r
Bond Curve - Long End where Fiscal Funding is FundedThe Dollar has very large Trendline support as well as the 50SMA. The pressure this exerts can be extreme. The rising trend indicates the potential for an extreme move in the Rate of Change (ROC) once again. The move will be very strong as 2 events are in play: 1. DX Hoarding 2. Net Drains @ FED and US Treasury * Of Note, the future of stimulus was made clear this week as California announced their intent to provide Universal Basic Income at a flat rate of $1000/per person. YCC remains active ahead of the September Federal Reserve Policy Statement. Frankly, a non-event imho. Since the end of March 2021, the 10Yr has dropped from 1.74. The question being asked - What is the Bond Market indicating? Answer - the FED smacked their noses for attempting to call them out on their endless BS.
CBOT:ZB1!Short
by HK_L61
6
Weekly Analysis 08/23 - 08/28HTD Dollar looks like Bullish Setup, aiming for the Old Daily swing Highs, while US Equities is at overbought condition and possible SMT Divergence with Dow showing unwillingness to go higher while SP500 and NAS move higher. The Bonds are not really clear but I would say it's Bullish if I was told to walk the plank or project the Bonds. No high impact news on Tuesday, but there is medium impact for USD on Wednesday then Thursday high impact USD news at 8:30 am est. It's going to be an interesting week, I see opportunity to learn price action like never before. Stay safe dear viewers!
CBOT:ZB1!
by OpeyemiJonah
Bonds Trade Plan This is the third post about Bonds in row. This is important because what it says about the market in general - if you don't understand look at a chart of Ultra Bonds /UB (ultrabonds) in March of 2020 - then you'll understand. All the cash aside being injected, things are slowing down again. So here is actionable plan if my thesis is correct - long at the 50% retracement and out at .78% which is at the top of the triangle. Bonds are raging on the Sunday open - we may straight to the 78% retrace without passing go and collecting $200. FWIW - I'm only right 62% of the time
CBOT:ZB1!Long
by Maximilianned
August Could Be The Start Of A Bumpy Period In MarketsLast week, in an interview on CNBC, legendary trader and investor Stanley Druckenmiller sounded an alarm. He told reporters on the financial news network, “I can’t find any period in history where monetary and fiscal policy were this out of step with the economic circumstances, not one…I will be surprised if we’re not out of the stock market by the end of the year, just because these bubbles can’t last that long.” He went on to say there is a “raging mania in all assets.” Jackson Hole could send ripples across markets like in 2020 The market expects the beginning of tightening The delta variant provides another excuse What does “transitory” really mean? Fasten your seatbelts for a very rocky ride in markets- The dollar and bonds have become risk barometers than the VIX In 2021, cryptocurrencies rose in a parabolic move to record highs. Even though they corrected, prices remain far above last year’s levels. The explosive rallies reflect the decline in the faith in government and central bank control of the money supply. The tidal wave of central bank stimulus and tsunami of government stimulus has weighed on fiat currency’s purchasing power. The stock market has risen to all-time highs because, for many investors, TINA, there is no alternative to stocks. As Leon Cooperman, the ex-Goldman Sachs partner and hedge fund manager, once said, “Buying bonds amounts to picking up pennies in front of a steamroller.” Commodity prices are trending higher in a bullish relay race that began at the March and April 2020 lows. Gold reached a record peak in August 2020. Grain and oilseed prices rose to eight-year highs earlier this year. In May, lumber, copper, and palladium reached record peaks. NYMEX crude oil futures recently rose to the highest level since 2014. Natural gas traded to highs above $4 for the first time since the peak winter season in late 2018. The last time natural gas was north of $4 per MMBtu was in 2014. Ethanol moved to its highest price since 2014, and coal to a level not seen since 2008. Last week, coffee futures traded at over the $2.15 level for the first time since 2014 before correcting. Commodities, stocks, cryptocurrencies, and other asset prices are trending higher. Residential real estate is not only a seller’s market, but prices have moved to insane levels in some regions. The bottom line is accommodative monetary and fiscal policies have planted turbocharged inflationary seeds, and markets have responded. Stanley Druckenmiller knows it is not a question of if significant volatility grips markets across all asset classes, but when it occurs. August 2021 could be a very bumpy period in markets as the traditionally volatile fall season is on the horizon. Jackson Hole could send ripples across markets like in 2020 The markets are anxiously awaiting word from the US central bank at its annual August gathering in Jackson Hole, Wyoming. Aside from fishing, hiking, and other outdoor activities, the Fed tends to use the offsite experience as an occasion to roll out monetary policy changes. Even though the 2020 summer meeting was virtual, the Fed took the opportunity to introduce a not-so-subtle change in inflation targets, shifting them from 2% to an average of 2%. After the highly inflationary CPI data over the past three months and a slew of other validations that the economic condition is far above the “target,” the Fed’s tone changed. At the recent meetings, the rhetoric became subtly more hawkish than dovish. However, this week, the central bank took a dovish step back as COVID-19’s delta variant is causing infections to rise. The variant could be a convenient reason for the Fed to maintain the accommodative status quo. The market expects the beginning of tightening Recent Fed minutes told markets the central bank debated whether they would begin tapering quantitative easing with mortgage-backed securities or government bonds. When the tapering starts, the Fed Funds rate hikes will eventually follow. The subtle change in the rhetoric increased market expectations that tighter credit is on the horizon. However, the market does not always get what it expects, and the Fed and US Treasury are notorious doves since 2008. The delta variant provides another excuse If the central bank digs deep into the excuse box, which sits next to the toolbox full of accommodative tools, it may come up with the rising number of COVID-19 delta variant cases as justification for the status quo. The powers in Washington DC will not mind as Democrats desperately want to hold onto and even expand the majority in the House of Representatives and the Senate. Liquidity and stimulus continue to prop up the economy, but the flood of the pair comes with a steep price tag. If the Fed decides to delay tapering QE or set a schedule to increase the Fed Funds rate from zero percent, it will only push off the inevitable. The bottom line is that artificially low interest rates and $120 billion each month in debt purchases are transitory policies to stabilize economic conditions. What does “transitory” really mean? The Fed’s mantra in 2021 is “transitory” when describing rising inflationary pressures. After the May CPI data, all the focus turned to lumber prices and skyrocketing home prices. In the wake of the June CPI, bottlenecks in the supply chain causing a semiconductor shortage and lack of supplies of new and used cars were thrust to the center of the excuse stage. Meanwhile, markets have been in an inflationary relay race to the top, with one asset passing the baton to the next. The stock market remains near record highs. Cryptocurrencies exploded, reaching incredible peaks in April and May, which is a direct challenge to the central bank and government control of the money supply. Commodity prices have been a merry-go-round of increasing prices. Real estate levels are out of this world. My wife and I bought a new home in late 2016. This week, smaller houses on our block were selling at over 100% above the price we paid. “Transitory” means temporary, and that a condition will pass. The Fed refused to define its measurement period for the “average 2% inflation rate,” calling it “discretionary.” Uncertainty is growing, and markets appear ready to respond. Fasten your seatbelts for a very rocky ride in markets- The dollar and bonds have become risk barometers than the VIX The price of any asset is always the correct price because it is the level where buyers and sellers meet in a transparent marketplace. The Fed may control short-term interest rates via the Fed Funds rate, but long-term interest rates reflect the market’s perception of credit. Ironically, the bond market has been taking on the Fed since August 2020. In a series of counter-intuitive moves, the US 30-Year Treasury bond futures fell from 183-06 in August 2020 to a low of 153-29 during the final week of March while the Fed purchased an average of $120 billion each month in debt securities. As inflation data began to make the Fed think about tightening over the past few months, the bonds have risen, reaching the most recent high at 167-04 in mid-July. The bond market has been moving contrary to the central bank’s signals with the futures near the highs at just below the 165 level as of July 30. Meanwhile, the dollar index reflects the US currency’s value against other world reserve foreign exchange instruments. Since the euro is the second-leading reserve currency, the dollar index has a 57.6% exposure to the European currency. The dollar index tends to move higher and lower with interest rate differentials. In the wake of last year’s pandemic, the rate gap between the dollar and the euro narrowed substantially. As the weekly chart illustrates, the dollar index fell from its highest level since 2002 at 103.96 in March 2020 to a low of 89.165 in early 2021, a drop of 14.2%, a substantial move for the US dollar. Since May, the index rallied, reaching the 93.195 level in July. The dollar index was at just over the 92 level on July 30. The index fell after the July FOMC meeting when the central bank appeared more dovish than the prior month. The high in March 2020 was a flight to quality during the worst period of asset liquidation caused by the pandemic. The decline came as US rates fell. The latest rally is on the back of the prospects for rising US rates compared to European rates and the potential for volatile markets over the coming weeks and months. The dollar and bond market are likely to reflect volatility better than the VIX index. The VIX reflects implied volatility of put and call options on S&P 500 stocks. Since market participants tend to panic during downside corrections, the VIX rallies when stocks fall. However, the stock market’s rise could be a symptom of inflationary pressures where all asset prices are rising, and that could continue given the tidal wave of central bank liquidity and tsunami of government stimulus. Even if the Fed bites the bullet and tightens credit, the process will be laborious. The central bank does nothing quickly unless it faces an unprecedented event, as we witnessed in 2008 with the financial crisis and 2020 on the back of the pandemic. Going from hawkish to dovish is a short-term affair while reversing course to a tighter approach to credit is done at a snail’s pace, in the interest of “market stability.” Meanwhile, with the 2022 midterm elections on the horizon and a green and progressive agenda in Washington DC, the spending will continue. Government stimulus in the trillions overwhelms any tweaks the Fed may make over the coming months. The price tag for inflationary policies is massive. The market is waiting for the Fed to unwrap its plans at the August Jackson Hole event. The FOMC got a lot more inflation than it bargained for when it boosted its target to an unknown and unmeasurable “discretionary” level last year. Fasten your seatbelts; markets are in for a wild ride over the coming weeks and months. The fall tends to be a volatile time in the stock market. Corrections in 1929, 1987, and 2008 came during the fourth quarter. Follow those trends as they are your only friend. The central bank and government policies may have been friendly for markets since the early 2020 lows but feeding the inflation beast with liquidity and stimulus is like giving bigger fixes to a junkie. According to Stan Druckenmiller, a rude awakening could be on the horizon. I can’t disagree, as all the seeds of financial insanity have begun to bloom. Either raging inflation or raging stagflation would roil the markets, and one of the two conditions seems unavoidable. We could look back at August 2021 as the beginning of an unprecedented and volatile period in markets. Fasten those seatbelts, hedge your bets and investments, and prepare for a head-spinning ride. It is far better to be safe and ready than unprepared and sorry when it comes to your assets. Get free early access to articles using the designated link below. Sign up for the Monday Night Strategy Call using the link provided below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
Editors' picks
CBOT:ZB1!
by Andy_Hecht
19
Long Bonds... and here's why? As the stock market is blowing up its been the Bond Market that been rising as of late. This is a chart I wished that I had seen sooner. Clearly the market is saying hey maybe things aren't as great as we think and maybe we'll just put our money in low yield bonds rather than risk. This backed off with rally this week but if you look at the direction and you think that we aren't going to push back what is VPOC and least touch it I would be surprised. This means more uncertainly in the stock market so we might go now where quick from here as equity is distributed and or possibly a significant move downwards. Hard to see the markets climbing higher with more conviction from the Bond market. However looking this profile even if everything is going to be ok - there going to scare the market - this a daily chart so this could be a couple weeks. This visible point of control (pink line) runs there for about two years and that was deemed support. Its not coincidence that there a a VPOC at the top and the bottom - this indicated to the market this is the turn. Its perfect if you know what look for - and that is the thing about bonds they do a good job of ticking back to the previous days VOC to strike it out. If you don't strike it out - it means it may be revisited. So I think you can go long bonds or TLT - maybe this could be a pretty good Iron Condor or straddle in the options market as most likely Bonds will sit here for a while they figure it out. While in the US there has been growth and inflation this not true in the rest of the world. This is what it boils down too - so until growth picks up outside the US the markets will stall or at risk. Of course putting Covid behind would go long way. There is a great video attached that explains what's going on the bond market from Jeff Snider. If you really want to know what's going out in broader scope it's incredibly informative. www.youtube.com
CBOT:ZB1!Long
by Maximilianned
Bonds - An Assured Negative Negative Return As M2 plateaued during 2006 / 2007 / 2008 - we saw an aggressive deflationary collapse. A far more insidious Deflationary Event is approaching. The absence of Collateral, A shortage of T-Bills, M1+M2's sudden reduction in May, Geo-Political Risks (Extreme), Budgetary Crisis, Stimulus Bill(s) Passage Risk, the End of the Moratorium on Mortgages, Rents, Subsidies - Jobless claims rising, Wages rising and many more crosscurrents creating an undertow the Federal Reserve suggests are "Transitory" with respect to "Inflation" with ZERO discussion of Health of their "System." None. Very ominous warnings appear and are ignored in this unusual environment. Protection is bought every day, even though the VIX is trading a Large Daily Sell, Intra-day there are clear signs there is a group whom is very concerned.
CBOT:ZB1!Short
by HK_L61
Long Bond Bull market of 2021-2022 Trend ChannelThe channel is at the lower end - levels of 180-200 on the long bond within reach of a new long bond bull market that may be just beginning. Last one was brief 306 days and ended with COVID19 starting in March 2020. Past bull markets have lasted between 12-18 months. Also possible that the current trend will fizzle out. The eurodollar futures curve seems to signal that the long bond bull market is a true phenomenon. Disclosures: Long TLT. Long ZB1 (30 year bond futures).
CBOT:ZB1!Long
by 1Creekdoc
/ZB - T-Bond Futures - More upsideThoughts and ideas are for educational purposes only. Similar to the TLT idea I posted not that long ago, I'm also expecting these T-Bond futures to have continues upside in the near future. Within the next month, I'm expecting a move into the mid 160s. The entire corrective cycle is complete from what I can tell and we've attempted to break through this resistance at 158-159. Helen Keller herself can see this resistance (which I've labeled in green). Once we break through this, it should be a clear path (after a small retest possibly) up to my targets. I'm expecting this to hit in the next 28-35 days.
CBOT:ZB1!Long
by bitdoctor