10 Yr Yield-100/200 monthly SMA cross is inevitabThe crossing of the 100 SMA ABOVE the 200 SMA on the monthly 10 year yield is inevitable...it will cross shortly no matter what rates do from here on out...even if they declined to 2% tomorrow.
What does this mean...IMO it means longer term lending rates will remain higher than people/corporations are used to seeing over the last 20 years. The prices we are seeing today will more than likely be what we will continue to see over the next 7-10 years; at the very least.
As you can see from the above chart, the 100 SMA crossed BELOW the 200 SMA on the monthly in 1990 and we all know what happened after that cross...we ended up being in a declining interest rate environment from 1984-2020.
We are now in either a longer term increasing interest rate environment or a stagnant one at best.
At this point we know the Fed is "thinking" about lowering short term rates but they are no where near a fierce rate cutting trajectory in the near term. Therefore, in order to project some relatively near term SMA's, I used the "SMA prediction" that @vladimir.kamba created to project out the likely path the SMA's may take in the near term. See link below (green lines) for the projected SMA's.
If the past in any indiction of the future...after the cross happened in 1990 rates were never able to touch the 200 SMA until 2018 (28 years later). The 200 SMA has flatted out and is projected to turn slightly up; which it has not done since the 1950's...Woah!!!
The point of this post...get your finances in order to anticipate this new rate environment! Those people or company's that refinanced at really low rates BUT used short term financing must anticipate refinancing those loans at much higher rates and/or should pay them off if possible. Do not count on rates going back to where they were over the last 20 years.
Could we be transitioning back to a period of time where "savers" are rewarded? Could that be why Warren Buffett has dramatically increased the cash pile at Berkshire Hathaway to around 25% of the total portfolio?
US10Y trade ideas
US10Y: 14 AUG, 2024US Bonds 10 YR Yield: 14 AUG, 2024 - 4H Chart
© Master of Elliott Wave Analysis: Hua (Shane) Cuong, CEWA-M.
10 YR Yields, the main trend is bearish. Currently wave (C)-orange is unfolding to push lower.
Wave ((iv))-navy has just completed at 4.022%, and wave ((v))-navy is unfolding to push lower, targeting the immediate target at 3.676%. While price must remain below 4.022% to maintain this view.
Disinversion Surprise on CPI Day?Could the 10's and 2's yield inversion finally rollover tomorrow back into normal territory ? MACD and basic patterns suggest no, but fundamentals will prevail. If CPI comes in hot, inversion likely continues, if CPI continues to cool as it has been for months, the inversion could finally run its course tomorrow morning
US10Y-US02Y - Bond Yield Curve AnalysisWorth noticing that the bond yield curve did very briefly push above 0 with a very whipsawing spike.
This happened at the S&P selling climax low.
And it does look like we will see a real move up and through the 0 point either soon or in the not too distant future.
Which in tandem will see increasing unemployment.
And that apparently is a clue that recession is in the pipeline.
And we often see a stock crash in that area.
That said, the alignment with stock indexes crashing is fairly loose.
Notice that the yield curve pushed through the 0 point almost 600 days before the crash happened.
Thats more than enough time for the crypto cycle to finish and the opportunity to cash out taken.
Then if a crash does happen as the crypto cycle ends, it would be the ideal outcome.
As I have said; I think everything aligns because this is all organised, orchestrated and not at all random.
But lets see, this is a little warning of danger here ⚠️.
Not advice.
Fed Watch Tool Target Rates on the US 10 YOn this graph, we see the current priced in Interest Rates of the FED Watch Tool in compare to the US 10 Year Treasuries. We can clearly identify by how much the market is frontrunning and at what pace the market believes the Interest Rates will decline.
The Orange Box below is the average Interest Rate of ~2.75% and the expected Mid/Long Term Interest Rate, until something brakes and the next Liquidity Cycle begins.
I personnaly believe that we will see an even faster pace in the future, hence the Earnings showing more uncertainty in the guidance of Corporate Ameria. Additionally the job openings decline, more people are unemployed, the Yen carry trade is not yet unwinded, consumer credit and auto loans are on verge of a credit shock.
Conclusion: hence TLT is pretty much the exact counterpart of the US10Y, I decided to go long TLT with leverage.
US 10Y TREASURY: easing with rate cutsTwo weeks ago markets reacted to surprising jobs data in the US, however, the posted ISM Services PMI on Monday put a dose of relaxation among market participants. Data showed that the US is clearly not in a recession and that, at least, the services sector is doing fine at this moment. All financial markets were traded in a positive manner during the previous week, resetting their sentiment to the previous path. The US Treasuries also re-adjusted during the week, in a move from 3.7% reached on a Monday, till 4.0% reached on Friday. The 10Y benchmark is finishing the week at the level of 3.94%.
Regardless of a positive come-back and re-assessment of the current state of the US economy, the market nervousness might continue in the coming period. It should be considered that the US inflation data and the retail sales for July will be published in a week ahead, where some increased volatility might be possible for one more time. At the current stage, the market is testing the 4.0% level, however, there is some probability for another drop in the week ahead. The level of 3.9%, eventually 3.8% might be tested. The move above 4.0% is unlikely at this moment.
Why are Interest rates falling? Time to buy? We have seen an amazing fall in interest rates.
Bonds have looked to put in a local bottom.
Why are bonds showing signs of accumulation?
Is the bond market pricing in a recession?
I believe the recent decline in yields is due to commodity weakness.
Yields have soften because energy & base metals have become cheaper.
This drives the disinflationary narrative.
I think its to early to tell whether this decline is from demand or global weakness.
Rate Cut? Big Disappointmenting, Unlikely!US10Y Yield Drama: The US 10-Year Yield has been on a rollercoaster—recently dipping, then bouncing back like it’s trying to make up its mind. But let’s be real, being around 4% isn't exactly an invitation to rate cuts.
History’s Not on Your Side:
Sure, the Fed has cut rates before without a crash, but that was when inflation wasn't hanging around like an uninvited guest.
Remember 1998 or 2001? Yeah, those were different times. Now, we've got inflation breathing down our necks.
What’s Really Going On:
This yield isn’t breaking any new ground—bouncing between 4.5% and 3.5% like a broken record.
Everyone’s screaming about an inverted yield curve, but hey, what else is new? We’ve been hearing recession alarms for a while now, and still, no rate-cut savior.
Fed’s Big Non-Move:
The Fed's been singing the same old tune—committed to that elusive 2% inflation target like it’s a sacred mission. They’re not about to abandon ship just because the market’s getting a little choppy.
Meanwhile, Japan hit the reverse button on their rate hike decision. The markets caught their breath, and we’ve already seen some solid “buy the dip” action. Panic averted—for now.
Even with the VIX spiking from all the fear trades, don’t be surprised if it calms down soon. The market’s got a short memory, and we’re likely headed for a higher high once this storm passes.
Cutting rates now would be like pouring gasoline on a fire and hoping for rain. Not happening.
Bottom Line: The US10Y might be teasing you with the idea of a rate cut in September, but don’t hold your breath. The Fed’s playing hard to get, and unless the economy really goes south, they will not lower the interest rates.
Reversion Zones:
Being back to 4% is a very high probability
4.35% will be soon after
Critical Resistance Ahead for US 10-Year Yield: Key LevelsWe've observed an impressive corrective rebound in the US 10-year yield chart. However, we are now approaching a significant resistance zone between 4.06% and 4.09%. This area marks the point where the yield previously broke out of its channel, aligning with the highs seen in March and July of 2023. Additionally, this zone represents the 38.2% retracement of the entire decline from the April 2024 peak to the August low. With this confluence of resistance levels, we will be closely monitoring for any signs of failure.
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Inverted Yield curve re-inversion vs SPYSince 1990, there has been a 4/4 probability of market declines and recession proceeding the re-inversion.
For data not shown on Tradingview, there were 2 outliers in 1980 and 1982 where the market nearly bottomed as it re-inverted (fred.stlouisfed.org/series/T10Y2Y)
However, the last two re-inversions still had the market increase for the proceeding 24 weeks (5-6 months). This is very important information. If this cycle plays out like the last 2, the markets might still crawl higher until Jan 2025.
Yield curve re-inversion vs GoldAs the yield curve re-inverts, it presents an opportunity for safe haven assets like gold to outperform. The only outlier was 1980 and 1982 when gold had already increased 800% in the few years prior due to Fed Volcker's era of runaway inflation.
Evidenced by the inverted yield curve's track record of predicting recessions, the Sahm Rule was also triggered on Friday's unemployment data. Since 1950, the Sahm Rule was able to predict a recession 10/11 times (91% chance). Every time it did predict a recession, it did so within 4 months.
Coincidentally, This time frame fits quite nicely with the 24 weeks of upside proceeding the re-inversion before the start of a bear market
US10Y Government Bond Yield Could Test 3.9% SoonUS10Y Government Bond Yield Could Test 3.9% Soon
The price is showing the completion of a complex pattern that could push the price further.
A very strong resistance area over the previous weeks is found near 4.48% dating back almost 1 month
Also considering overall market expectations, US CPI data on Thursday could help this bearish move.
You may find more details in the chart!
Thank you and Good Luck!
❤️PS: Please support with a like or comment if you find this analysis useful for your trading day❤️
Bearish Yields Can Send USDollar Lower10Y US Yields are falling impulsively within wave C as expected after we noticed sharp leg down into wave A, followed by a corrective rally in wave B. So, there can be now space even down to the former wave 4 area at 3.25%. If we consider a positive correlation with USdollar Index – DXY, then USD can face more weakness. Is DXY trying to break bearish triangle?
Yield CurveThe 2/10 treasury yield spread is quickly flattening and an inversion could happen soon.
All of the previous yield curve inversions are associated with memorable market sell-offs and recessions.
I believe the ripple effect of the ongoing financial and economic sanctions against Russia will end up being the catalyst for the next meltdown.
The market conditions have been favorable to a disaster by many measurements for some time now.
Again, there are many unknown cross-currents beginning to work their way into the global economy. On top of that, the FED is raising interest rates in less than two weeks.
Yield Curve touched the 0% - Will it continue up?US10Y-US02Y = Yield Curve.
The Yield Curve has predicted each of the previous market crashes.
The markets are crashing now but is it really the beginning of a bigger market crash?
OR are the markets just very volatile and have more last push up? Maybe yes for the US Markets.
In 2000, the market peak was when the yield curve was still negative (-0.3%).
In 2007, the market peak was when the yield curve was at 0.5%.
Is 2024 more like 2000 or 2007?
US 10Y TREASURY: September?During the previous week the 10Y US benchmark rates reached the lowest weekly level at 3.78%, and moved down from the support line at 4.2%. There are two major reasons for such a strong drop in Treasury yields. The first was on Wednesday when Fed Chair Powell noted a potential for a rate cut in the future period, which market perceives to be September`s FOMC meeting, and the second reason was surprisingly weak jobs data posted on Friday. The posted non-farm payrolls for July were significantly weaker from market expectations, reaching 114K, from 175K expected by the market. At the same time, the unemployment rate reached 4.3%, again higher from 4.1% estimated by the market. There is currently fear among investors that the US might slip into recession, however, there are also analysts who are noting that weak figures might be due to seasonal effects. Surprisingly weak jobs data led investors to increase odds for more than one rate cut during the course of this year. Also, there is currently 58% chances by market expectations, that the Fed will cut rates by 50 basis points.
After such a strong move in Treasury yields, it could be expected that the market will slowly digest the Friday`s data and adjust positions accordingly. In this sense, there is a probability that the yields would revert a bit to the upside, at least to the level of 3.9%. However, at this point levels around 4.0% are questionable.
US10Y - 7 Days Of Hell! When Will It End!?The FED has maintained their stance with 5.50% whilst BOE and several others have either lowered interest rates by .25 basis points or raised it.
Due to this, we have seen turmoil in the yield markets, -11%* decline within 7 days with more potential pain to come.
Current price action is trading below 2024's lows which could be a factor, if short-term trading to capture relief rallies back up to PD arrays.
3.783 is the next draw on liquidity.
Set a alert!
Monthly/Weekly buyside imbalance sellside inefficiency + order block located @ 3.644 - 3.535 is the next potential draw over the monthly basis
US 10 year Bond BoxesAll horizontal rectangles edges are Levels I will be watching for potential support and resistance action. Wouldn't say I am overly confident in the potential colored path of the boxes (red, cyan, yellow, pink and blue), but will provide step by step updates if anything significant pops up in a discretionary perspective.
The project should or might become more relevant with it's levels and zones, in time, if we get to see specific price action at the levels to indicate at least a slight sign of relevance.
First one to look out for is potential support at the red zone. Next to watch out for is a bullish toned cyan box perspective. If these fail, all bets are not off, we just let the price action dictate how the market feels inside the boxes and what it does when it escapes one.
Thinking outside of the box there might be another potential aspect for this project. What if the information is encrypted so that we don't get to see in advance what can really actually happen? How can we crack the code and why? Take a deep breath. Get A Touch of Zen. Look at the design without having thoughts about it and see what pops up and why and how. I like the O icon and the nen text location. Could be wrong though.
This one is similar to the EURUSD project. Linked.