US10Y Possibly Bullish Break Out 5-7.5% Target Bullish flag with easy 5% Target if monthy breaks above the resistance line forming a pole of bullish flag...
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US10Y trade ideas
Yield to SPX ComparisonLong-term view of rates compared to SPX. Orange line is SPX, green line is 10 year yield, blue line is 10 year yield minus 2 year yield. Red vertical line indicates when the spread (10yr - 2yr) crossed back above 0 after dropping below. Historically, the curve has uninverted when yields dropped. I'm curious to see what happens if the curve uninverts with rates still rising.
US10Y: Soaring Bond Yields as Federal Reserve Maintains Hawkish The Fed Hawkish Stance
During Wednesday's address, Federal Reserve Chair Jerome Powell reinforced his stance on tackling inflation with a more cautious approach. He emphasized that the central bank is not yet finished with its efforts to curb inflation and hinted at the possibility of implementing multiple interest rate increases during future monetary policy meetings.
Powell's statement comes as a response to the ongoing challenge of bringing down inflation, which has consistently remained above the central bank's target of 2%. Notably, some Fed officials have emphasized in recent speeches that inflationary pressures persist. They specifically highlight core inflation, which excludes the volatile prices of food and gas, as not decelerating as rapidly as overall inflation.
The aforementioned statement supports the potential scenario of higher Government Bond Yields in the future, as an increase in interest rates typically correlates with elevated yields.
Technical Analsyis
The U.S. government's 10-Year Bond Yield has undergone a retracement, precisely at the 0.5 Fibonacci ratio, establishing a support area. Notably, the yield currently exhibits a bullish trend as it remains above the EMA 200 line, indicating positive market sentiment. Furthermore, the Falling wedge pattern suggests a continuation of the prevailing trend. Complementing this observation, the stochastic line crosses within the neutral area, further bolstering the case for a possible upward movement toward the target area.
It is important to keep in mind that once the target/support area is reached, the roadmap provided may no longer be valid.
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"Disclaimer: This analysis is intended solely for educational purposes and should not be considered as a recommendation to take a long or short position on the TVC:US10Y ."
Yield Curve Bottom (10s minus 2s) This is called the "Steepener" trade and refers to a mean reversion in the yield curve. From current level of (-38 basis points, or -0.38%), I'm targeting a move back to 1.00%, or ~70bp, risking down to about (-45bp), or about (-13bp) downside.
Yield curve steepeners seek to gain from a greater spread between short- and long-term yields-to-maturity by combining a “long” short-dated bond position with a “short” long-dated bond position, while a flattener involves sale of short-term bonds and purchase of long-term bonds.
- CFA Institute
TNote (US10Y) entering target area, expecting a pullbackThe TNote (US 10 year yield) has entered its target area for this up movement from the bottom.
Resistance area is between 4.65% to 5%.
We are expecting a pullback below 4% for the next months.
Then the uptrend should resume towards 7%, possibly higher.
A break above 5% would invalidate this view.
US 10Y : "FED vs MARKETS" |...who will win? | (Part.II)The market is waiting for one of the most important events that could give a clear direction for the coming months. Today FOMC will release interest rate decision and the main players ( TVC:DXY , TVC:GOLD , VANTAGE:SP500 and FX:EURUSD ) will suffer the consequences. Even if we cannot rule out a 25bp increase, most analysts believe that a pause may be the right choice, also because the usual press conference is not scheduled for the next FOMC meeting, so the board could take advantage of this opportunity, to explain this "temporary change in direction" to the market.
So, what will happen today? No I have an objective answer to this question, unfortunately I am not a guru but a simple Trader, so today we will limit ourselves to following events.
Having said that, from a technical point of view, we were lucky in March because we widely predicted this increase in yield rates from 3.30% area to a new high (wave 5 for Elliottians) in Part. I of this Analysis. On weekly chart the trend is bullish and the next technical levels are around 4.46%, 4.61% and 4.7%, but today TVC:US10Y could take any direction.
US 10Y : "FED vs MARKETS" |...who will win? | (Part.I)
(Click on chart below)
Trade with care
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US 10Y TREASURY: digesting week is over?Markets spend the previous week digesting the latest information from the FOMC meeting regarding interest rates levels in the coming period, as well as FOMC economic projections for the next two years. It all created one quite a challenging week on US financial markets, as well as for the US Treasuries. The 10Y yields reached 4.5% immediately after the Fed Chair speech after the FOMC meeting on September 20th, however, during the previous week yields continued to surge further, reaching the highest weekly level at 4.67%. This could be treated as a sort of market overreaction, as yields soon returned to the level of 4.57% where they are finishing the week.
Yields continued to move within an overbought momentum for a second week in a row. This adds to the high probability that yields will further move toward the 4.5% levels which is more realistic to current economic prospectus and wording supported by the Fed. At this moment on charts, a 4.3% level could be the next target for 10Y yields, however, it might take some week or more until yields clearly reach this level.
There is a risk that $US10YR may further breach the 5% rate The US 10-YR Government Bond Yield is at risk of breaching further to as high as 5% which will then weign in more on the other safer haven yellow precious metal #Gold.
A rising yield for the past years since Covid erupted has brought pressure on both equity markets and Gold was never an excuse for this.
Why Gold shall keep falling? Real yields.dear fellows.
we believe gold prices are likely to keep falling, because unlike many analysts say, it is not a hedge against inflation, rather against real yields.
real yields have been rising, and thus, gold prices should fall.
in this video idea, we show how much divergence currently exists between these charts, and why in the next couple of weeks one can expect further losses in the gold price.
thank you for your attention.
best regards.
Inverted Yield US10Y-US02Y==Late 1970s to Early 1980s:
Yield Curve Inversion: The yield curve inverted several times between the late 1970s and early 1980s.
Economic Outcome: The U.S. experienced two recessions during this period: one in 1980 and another in 1981-1982.
Stock Market Outcome: The stock market faced significant volatility, with the Dow Jones Industrial Average (DJIA) experiencing declines during these recessions.
==Late 1980s:
Yield Curve Inversion: The yield curve inverted in late 1988 and early 1989.
Economic Outcome: This inversion was followed by a mild recession in 1990.
Stock Market Outcome: The stock market faced a downturn in 1990, with the DJIA dropping by around 20%.
==Late 1990s to Early 2000s:
Yield Curve Inversion: The yield curve inverted in 2000.
Economic Outcome: The U.S. entered a recession in 2001, partly due to the bursting of the dot-com bubble.
Stock Market Outcome: The stock market began a decline in 2000, with the tech-heavy NASDAQ Composite Index dropping significantly due to the collapse of many internet-based companies.
==2006-2007:
Yield Curve Inversion: The yield curve inverted in late 2006 and remained inverted into 2007.
Economic Outcome: The Great Recession began in December 2007 and lasted until June 2009, triggered by a housing market crash and subsequent financial crisis.
Stock Market Outcome: The stock market experienced a significant decline, with the DJIA losing more than 50% of its value from its peak in 2007 to its trough in 2009.
==2019:
Yield Curve Inversion: The yield curve inverted in August 2019.
Economic Outcome: While many analysts were concerned about a potential recession, the U.S. economy remained resilient in 2019 and early 2020. However, the unforeseen COVID-19 pandemic in 2020 led to a global economic downturn.
Stock Market Outcome: The stock market faced a sharp decline in early 2020 due to the pandemic, with the DJIA dropping by over 30% in a matter of weeks.
It's essential to note that while the inverted yield curve has been a reliable predictor of recessions in the past, the exact timing between the inversion and the onset of a recession can vary. Additionally, other factors, such as global events, fiscal policies, and technological shifts, can also play significant roles in economic outcomes.
Why we expect EURUSD SPX to keep falling.Dear fellows. In this short video we present our case that EURUSD tracks US10Y since 2020 on an inverse relationship. We also expect the yield curve to keep steepening, and by assuming Fed funds rate "higher for longer", US10Y is expected to rise further.
Higher US10Y, thus, implies in lower EURUSD and SPX, as well as other major market indexes.
The particular dynamics of each does not ensure a day to day follow up, however, eventually they do catch up.
Thank you very much for your time. Critics and suggestions are welcome.
Best regards.
Long position US10YHi traders! 👋
Let's take a look at US 10 year bond yields. It's has been in an up trend for half a year now. We expect it to continue to the upside. Right now the price is testing the resistance line. We expect the price to come back to the historically strong support zone and bounce back upwards if it can hold the price. The target zone will be at the upper resistance line.
What do you think about this idea? Let us know in the comments!