When it will Come down?When 1-dgs10/dgs2 closes below the orange line at 0.1013, it all comes tumbling down.
DGS10 trade ideas
Stagflation is comingReal interest rates will probably start to fall soon because of stagflation.
Real interest rates can be measured by subtracting inflation expectations FRED:T10YIE from US treasury yields FRED:DGS10 .
Treasury yields will likely fall along with unemployment as measured by initial claims FRED:ICSA .
Initials claims has started to slowly rise and when it does treasury yields will probably go down.
Inflation expectations will likely take longer to fall because it takes longer to get prices to slow down than for unemployment to rise.
Businesses will more likely fire people than lower their prices to protect their profits and now inflation expectations are probably well anchored.
This should be bullish for silver OANDA:XAGUSD and gold OANDA:XAUUSD and negative for the dollar TVC:DXY .
When looking at the charts for primary metals and DXY it also looks like they are ready for a major turnaround.
A description of the above can also be found here:
www.forbes.com
will silver rise along with a drop in real rates?Real rates look like they are about to turn over.
This should mean that interest rates should drop faster than the inflation.
A good proxy for this is silver which looks like it is touching a support line and the 100 MMA.
$spy $tlt It's not the inversion that kills the marketIt's when it normalizes you better watch out. I think we've put in a generational top and we go lower. Can't rule out a continued rally as the state of inversion can last a while.
Real yield, DGS10-T10YIEcalculating real yield, DGS10-T10YIE
reference
fred.stlouisfed.org/series/DGS10
fred.stlouisfed.org/series/T10YIE
10 Year Treasury Elliott Wave Analysis10 Year Treasury Elliott Wave Analysis. The Big question here, is Wave (A) actually Wave (1) ?
$spy $tlt THE top is coming, but $ to be madeWhere spy tops out is questionable. 4800, 5000, 5250 ? Who know, We are now in the later stages in my opinion. Keep bets small and use stop losses and options to manage risk. A lot of money can be made or lost in this final stage. Don't be greedy and manage risk. Volatility will remain high so keep positions smaller than usual.
$spy $tlt $tnx Inverted beans & frank patternIf this pan out and the frank gets erect it could spell trouble for risk assets
10-Year Treasury Hiding StrengthFRED:DGS10
Thought I would check out the the 10 year after some crazy price action and decided to analyze this on a longer term time frame.
The Laguerre RSI doesn't show much weakening compared to price which indicates to me there could be a possible pop up even making higher highs.
Synchronized marketsSo we have synchronized movements between long-term treasury yields (5, 10 and 30 years) and cyclicals (airlines, oil companies, carmakers, cruise lines, etc.) regardless of the fundamentals. If these yields are expected to continue increasing in response to a higher rate of inflation, a continuation of the trend in cyclicals would also be expected.
The peak of June 8 of last year was the clearest proof of this interrelation between markets. Oil prices could continue to rise, I would not be surprised if it reaches $ 100 a barrel.
10 year minus fed fund rateFed lost some control from March 1969 to Sep 1981. Since then, they are master or the ring, and the curve! Notice how gold behaved inversely during the 1970's.
Expect the unexpected.
Obscene gesture?I sometimes feel the big dogs send messages through chart patterns, I wonder if this is one of those times.
The Great Deflation (Corrected)Deductive Thoughts: Global interest rates continue their decline towards zero. Soon, most major economies will be under the pressure of deflation. On the one hand, negative interest rates have shown to be not viable to boost inflation , risking a debt crisis of the private sector piling up "free" loans. On the other hand, quantitative easing also shown to be not viable, risking a debt crisis of the public sector piling up private debt.
Inductive Thoughts: Global economic policies will need to change this coming year, or a reason to inflate must be put forth. Major economies cannot sustain previous growth rates as they begin to fill in to all the available room. Two possible solutions: War; or Mars. Wars are infamous for their spur of inflationary periods. However, a global effort to colonize Mars would prove just as potent to spur growth.
The Trade: Sell USD and buy GOLD into the devaluation of the dollar. Sell stocks, sell bonds (interest rates are not returning to previous levels, so bonds no longer safe haven).
$spy $tlt Market should fear steepening of yld curve This is not 95' or 98' two completely different rate cutting cycles with completely different economic conditions. You should focus on 2001 and 08' for more accurate assessment. If fed cuts more than 3 times we could see an acceleration of the steepening of yld curve which would not be greeted well in my opinion.
$tlt $spy Starting to look familiar?Market can still go higher but this is just a precursor of what's to come. GFC II
Its when the yield curve un-inverts.....Each time the Yield Curve (DGS10-DGS2) un-inverts; the stock market crashes and we have a "Crisis".
Keeping my eyes on it.
Completely Inverted!As you can see, we are now completely Inverted on the 2 and 10 year. Remember, there wont be a crisis until we un-invert. See my earlier post on this for clearity. Link is below.
Not a Coincidence....Its not possible to be a coincidence. This is the US Bond 2-10 Year yield chart with Bitcoin overlayed.
Its simply not possible to be a coincidence and is 100% proof that the Federal Reserve is the owner/operator of Bitcoin too, along with everything else. Its long been known that the Federal Reserve has been buying and selling bitcoin based on the premise that there are "Whales" out there.
Predict Bitcoin with the Yield Curve...This chart shows very clearly how Bitcoin Bottomed at the exact same time that the 10 and 2 year yields inverted....
