US02Y trade ideas
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.
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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.
Technical Report Vs. Earnings ReportThis week was a bit of a sad week for me
but despite that
i logged on to trading view to find
a good stock to trade
watch this video to see which stock i found
Take care,
lubosiforex
Yields are mixed over last couple weeks 2Yr picking up steam6M #Yield has been struggling lately
1Yr was weak but it's retracing some of those losses
2Yr has been the strongest of the four lately
10Yr Has been stagnant as of late
Seeing the 2Yr pump is concerning.......
#bonds #stocks #gold #silver
Earthquake IndicatorPrediction of market big crushdown, if long-term treasury - short-term treasury < 0, usually will be a big crush.
$US02Y Failed Bear Flag TVC:US02Y Failed Bear Flag on the weekly chart, the best moves come from failed moves. Expect this move to break through the horizontal line,.
Target 3.01Following weekly chart.
This week we're nearly getting a short signal, posting earlier but I am nearly sure about the signal.
TP1 3.26
TP2 3.01
SL 4.1 - Please wait for weekly close.
FOMC nothing to see hereFOMC has raised interest rates for 9 times in a row. The next Fed interest rate decision will be publicly announced on Wednesday 5/3/23 at 2pm. The market consensus is expecting FOMC to raise interest rates for the 10th time in a row.
FOMC rate hikes:
3/16/22 +0.25% = 0.50%
5/4/22 +0.50% = 1.00%
6/15/22 +0.75% = 1.75%
7/27/22 +0.75% = 2.50%
9/21/22 +0.75% = 3.25%
11/2/22 +0.75% = 4.00%
12/14/22 +0.50% = 4.50%
2/1/23 +0.25% = 4.75%
3/22/23 +0.25% = 5.00%
5/3/23 +0.25% = 5.25%
The collapses of First Republic Bank, Silicon Valley Bank and Signature Bank were the second, third and fourth largest bank failures in the history of the United States. The collapse of Washington Mutual during the 2007–2008 financial crisis was the largest.
On July 6th 2022, the 2s / 10s yield curve inverted, and it has widened its gap since then. An inversion of the 2-year, 10-year part of the curve is viewed by many as a reliable signal that a recession is likely to follow in one to two years.
US 2 YEAR GOVERNMENT BONDSJust like the 3 month bond yield, the 2 Year is also short term and mainly determined by the fed policy. 5.5 Maybe the next stop for the short 2 Year bond yields where the market will pause, consolidate and then breakout/reverse. The fed may also maintain the rates at around 5.5.
US BONDS 2YR YIELD Chart Fibonacci Analysis 042723Trading Idea
1) Find a FIBO slingshot
2) Check FIBO 61.80% level
3) Entry Point > 4%/61.80%
