BArt ThingssssLooks like the bart is a real possibility here. This pattern is famous by now, you all know what it is.
US02Y trade ideas
2 year yield keeps pushing higherThe final exhaustive push higher in a subwave -c- of wave -v- up quite often comes as a strong rally resembling the heart of the rally in a subwave -c- of wave -iii- up.
us Treasury yields with 30 year mortgagesimple chart if someone needs it for us treasuries and also added in the 30 year fixed avg mortgage. nice chart to track yields moving
💸😰2 Year Treasury Bond @ - 0.2% in Uptrend 📈When investors invest in short-term bonds
it means they expect inflation
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to arrive inside the current economy
this means higher food prices
and tough economic living conditions
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for the poor and middle-class
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inside this video, you will see the yield curve
and where to buy Bitcoin to save you
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from inflation
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2 year yield keeps pushing to the target at 5.50%2 year yield keeps pushing to the target at 5.50%
We are in the final wave v up. Upon completion of that five wave up rally we should get a large corrective a-b-c pullback to re-test the low made by the wave -iv- down
US02Y bullish move stopped by a fibSharing how Fib extension can catch tops and bottoms / support and resistance.
Here we have the 2yr bond yield with the 3 pivot points (marked by blue price notes) for the fib extension at Mar 24 low, Mar 31 high and Apr 05 low.
Last nights .5-ish move was suppressed by the Fib 3 boundary.
From an elliott wave perspective, there are so many 1-2 waves from the May 04 low...it would seem, if this is a correct analysis, the 2yr is headed higher...much much higher. I believe this is the 5th wave just starting and to confirm, we'll have to watch for a significant break(IE a few green non-retracing candles to be the confirmation - something like the push from 13-sep-2022 to 26-sep-2022)
2 year yield - breakoutThe yield market is going absolutely bonkers tonight in the futures.
What is the bond market telling us?
likely inflation is entrenched. If the 2 year yield closes at or above the Fed Fund Rate before we hear from Powell expect the fed to do a surprise rate hike or remain extremely hawkish.
This will no be good for stocks if this is the case.
2 Year Bond Yield Up By +0.85%
-Bonds offset volatility for equity prices
-Even though Bonds Are An Inflation Risk
-Bonds Are Also At Risk Of Interest Rate
TVC:US30Y are budget friendly even though they offer low returns
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2 year yield can top at 5.50%Top complete a five wave up structure of the rally off the March'23 low it should stretch higher to 5.50%. Upon completion of the five wave up structure yield should drop back down to 4.80%-4.70%
Is the 2y bond telling us something? HAS THE CRASH BEGUN?Bonds yields have been moving up at a fast pace recently - the 2 year bond yield moved between may and now nearly a full percentage point. Currently at the levels seen around 2008 right before the markets crashed. With real rates on the 3 Month bill actually reaching the exact rate before 08 crisis.
One thing I noticed is that the longer end of the curve, i.e bonds with longer maturity have risen at a faster pace as well in the recent weeks.
Hedge funds put massive bets in the last few weeks that yields would go higher ( shorting bonds) and I wonder if higher bonds pushing for higher rates is what may be the trigger that puts us into a recession and I do think into a real crash in the stock market.
What do I mean? I think that the market has realized that inflation has been going down in many areas as shown month after month on the CPI, PCE and such reports. Although, there are still many areas where inflation exists and does not seem to be going anywhere, such as real estate, energy, and even food. Another big factor here is loan payments, mortgage payments, that people are paying on cars, houses, etc. So people are not saving, people are taking more and more credit as shown recently that we are currently at record levels of credit card debt and the lowest rate of savings in over a decade.
The optimism in the market since the start of the year, was so that the market started to be ok with the fact that rates would be going to around 5%-5.5%, and even pricing in rate cuts during 2024- as we all know, the markets are forward looking, so equity prices started moving higher.
But after all this, we have reached a point where the market is questioning valuations when we have a good return in "risk free" assets, and with so much concentration in a handful of names bringing great companies at trillions of dollars of market cap but with no where near a reasonable price relative for the risks. Not to mention the soft earnings, yes we beat expectations, but is it really hard to beat such low expectations? if you look at earnings in compared to a year ago you will see that there is hardly any growth and even no growth and lower sales.
Back to Bonds- why would yields go up?
Fitch downgrading the US credit market is one reason, but not at all the whole story. Sticky inflation could another reason.
One major one which I think has been forgotten recently, is the banks. Reginal banks and even more larger banks have on their balance sheets loads of us treasuries, when SVB and First republic collapsed, it showed how fragile the banks are to rising yield rates on the securities they hold. Now that is is happening again, and this time along with longer maturity securities, I think there may be a real crisis waiting to unravel. Perhaps bringing dozens of banks to the brink of collapse. This is something that would be to great for JP Morgan or any other major bank to buyout and save by themselves.
On another note The market is showing its concern, for fiscal issues, real problems with the US paying over a trillion Dollars a year just on interest payments. Less income on taxes and much more spending due to inflation. I think the current environment is screaming a lack of trust and wants real returns for the risks in takin on more US debt, so rates are going up.
How much higher can yields go without something breaking?
I think the 30y mortgage rate at 7%+ currently is going to be another breaking point.
Without going to further in the housing market, I will just note that with rent prices at all time highs in many cities, could be a signal that home owners are trying to get a yield on their investment that can cover their mortgage expenses which are rising. Putting the expense on the renter. When it reaches a level where renters cannot pay these amounts that's when owners cannot keep their homes, selling starts. Home owners seeing rates rising ( 10Y bond is the best indicator as most Mortgage brokers use that to calculate rates ahead) can start to panic and sell.
So I do think that if there will be a total crash it will happen simultaneously in many markets and will obviously cause major panic and mayhem. This time the Fed wont be able to do much, printing money will be seen as a major fiscal risk and may cause the end of the dollar all together, inevitably a major correction will be needed to reset financial valuations and restore confidence in the debt markets.
To summarize, there are definitely cracks, and real risks that seem to outweigh the current reward in the equity markets..
DXY doesn't look too happy below 100Last week the US dollar index (DXY) closed at a 15-month low and beneath 100 for the first time since April 2022. Yet subsequent price action has seen a lack of conviction form bears, allowing prices to form a double bottom just above the March 2022 high and close with a Spinning Top doji yesterday.
Given US yields are showing signs of stability (and hinting at a move higher themselves), it seems reasonable that the US dollar is due a corrective bounce over the near-term which brings 100.5 and the April low into focus for bulls.
A break beneath the March 2022 high invalidates the bearish bias, but this could be raised to the recent swing lows if we see a decent break (or daily close above) 100.
DXY and US yields were technically poised for that sell offDXY and US yields were technically poised for that sell-off.
Is it time to switch "treasures"?-The US government's 2-year bond is trying to form a new bullish pivot on the monthly chart.
-I believe that it will not have enough strength to go further, that is, to break the pre SUBPRIME peak of 2008, in the region of 5,283, as inflation at the moment (short term) seems to want to cool down.
-But long-term inflation, I'm sorry to say that you may not want to let your guard down, so 5 and 10 year bonds may reach new highs.
-On the weekly chart we have an accumulation of prices, and the projection of this accumulation suggests the region of 5330 as a possible maximum destination for the prices of the 2-year bond.
-The SETUP used also projects purchasing power up to the range of 5,338 according to the high pivot also shown by the SETUP used!
-The daily chart already shows exhaustion, so you need to pull back on the long average just below if you really want to look for the 5,338 region.
-Do your analysis and good business.
-Be Aware, If You Buy, Use Stop!
-See below for other graphic reviews!
It might be the right time to buy 10 year TreasuriesI see a big opportunity on treasuries with the rates that the treasauries are trading at. Why? Inflation has been going down consistently from 9.1% to 4% and the PPI (which is the Producer Price Index) from 11.1% to 1.1%. These indicators usually draw near the core CPI which has been sticky above 5% and has been the aim for the FED. Rents and some services have been raised this year and are not going down or stabilizing 12 year compared until next year. There is a lag effect in the economy regarding the rate hikes of about 12 to 18 months and we are still to see many of the effects noting that they have been restrictive for just 9 months.
Another nice data is the base, 12 month old prices. May and June are the top of the prices from last year due to the supply chain issues and the Russia Ucranie war. Oil went up to 130 dollar a barrel and most of commodities topped last year. So the CPI next week should be a 14 year high real yield high when a 3.2 to 3.5% print on the CPI should show more inflation loosening.
Economy is stil in a tight spot, with a strong labor market which made the last rate decisión of the FED a prediction of two more rate hikes this year. Eventhough since then 2 voting members have seen the posible mistake of keep hiking and have said that they should still see the effects of the 500 rate increase and not hike more for at least this year. This alone should drive a big buy througout the curve.
Economy is not that strong to see a 14 year high in real yield for a 10 year high with much analysts, including the FED are expecting at least a mild recesión. So rates are very high taking into account the análisis made. A 3.50% on the 10 year and a 4.30% on the 2 year are the aims. But the market has been frightened and selling due to the losses they took from anticipating this move too early. The recent debt limit helped a lot recently for those losses, but its an issue that has been dealt with. A frightened market ussually is an opportunity and I think this is one of them.
We still need to see the other 7 memebers of the FED agree, but in an educated guess the next week CPI data must do the job.
SPX vs US2Y and US10Y Spread. The lagging recession indicator.As seen here we can expect pivots once we have a divergence appearing at the spread, usually the indices lag and follow only once it starts free falling. Something to watch, another great indicator.
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
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We did not just consolidate this long for a small move.I am not certain how quick or slow we move up here, but I would imagine 8% terminal rate, give or take.
This is going to severely harm the economy, and help the strength of the dollar, and also secure it as reserve currency.
The 2-yr finally broke through resistance todayThe TVC:US02Y finally broke through key resistance today, and now has a chance I think to go back to 5.1%.
US 2 YEAR TREASURY BILLS ANALYSISThe yields on the short term 2 Year Treasury Bills have been on the rise since the FOMC started hiking the Dollar interest rates in March 2022. Earlier this week, the FOMC maintained the interest rates at 5.25% for the first time. This marks the beginning of the end of the current economic cycle. The yields are now at previous resistance from the 2007/2008 highs. If the FOMC Pivots at 5.25%, the short term Treasury yields will fall.
Bond Yields are mixed, longer term look better atm🚨🚨🚨#yields🚨🚨🚨
3M + 6M have been weak lately, we called them topping some time ago.
Will they turn soon?
1Y trading at recent highs and seems like it is trying to go higher.
2Yr looks like it wants to the recent test highs.
10Yr TVC:TNX peaked LONG ago!
Breaks white line, downtrend, likely trades higher.
Inverted yield curve thing of past?
#bonds #tech NASDAQ:NDX TVC:DXY
InversionAn inverted yield curve shows that long-term interest rates are less than short-term interest rates. With an inverted yield curve, the yield decreases the farther away the maturity date is. Sometimes referred to as a negative yield curve, the inverted curve has proven in the past to be a reliable indicator of a recession.
