10 yrBonds yields climbing again, we could get 2% B4 the fed steps in and announces YCC & "saves" us from the 10yr inflation narrative. ;)
10yryields
10YR could be over 2% by 4Q21Economy is recovering quickly. 10YR is expected to hit 2% sometime this year, I suspect it to occur near the end of the 3rd quarter; so the end of summer. Not only will everyone be vaccinated backed by warm weather, low infection/death rates, and reopenings in full-force, we will have less unemployment and a stronger economy leading to higher yields. This could lead to a panic-sell off in risk assets/low-yielding assets.
This year is expected to be choppy and this should cause a whole lot of chop as portfolio rebalancing into fixed income picks up.
10yr Yield is not on watch mode until we cross 1.9 and the 50MAWe said in an earlier post that the continuation upwards for the 10 yr yeild is a sign that there could be a stock market pullback, that is a pretty good theory but also at the current levels really not a possibility. We are not taking into account any market issues like oh for example 2T worth of dollars pumped into the market. Those mini-bonds are not doing much even given the M1 and M2 charts this month.
What we will look at is technicals and that starts with the 50 MA which we will not reach until 1.9x range and the 200MA which is at the 3 range.
If we continue upwards and cross the 50 and head to the 200 then the market is in shape for a real correction. So yes our earlier trading strategy hit target and is still on the upside we are simply waiting for a touch, cross and hold above of the 50MA to make any serious moves.
The nasdaq reacted well to the momentary weakness of US10YThis week starts with a slight lowering of the 10-year U.S- Treasury yields and the NASDAQ reacts well to that.
This reminds us that investors are increasingly watching the danger of inflation.
Inflation leads to an increase in rates and generally to an economic contraction with a consequent collapse of the stock market.
BONDS go parabolicUS10Y is going parabolic. Inflation is coming but immediate short term; strong dollar. Will yields outperform inflation? Nope, I have no evidence for that. I bet you know my inflation hedge. Thats it.
This is not investment advice, do your own research, trade or invest at your own risk.
10yr Gov Bond Break of 1.69 opens a whole new worldFrom a technical perspective if we break through 1.69 on the 10 yr gov bond yield then we open up a whole new level of charts for a return the larger number target of 3.2.
Substantial in two ways:
1. Higher yields create higher borrowing costs for companies and consumers
2. A larger majority of investors (retail) are people over 60 with retirement incomes to protect, if they continue to receive great returns but the costs to the general consumer market could be too much, these people tend to not spend but save
As painful as it sounds we see this continuing up to atleast 2 and possibly 2.5 in the near term.
US10Y down trend - breakout up or down?Short term down trend good for (digital) assets & securities, breakout up or down? Let me hear your opinion. Inflation?
DYOR & DD, not financial advice.
10YR Yield*** Important Driver TodayMarket responding to changes in the 10yr. Appears to be trapped in bullish channel. Lower supports responded yesterday, expect rates to continue to march higher with risk to growth equities valuations.
Wave spikes Looks there there should be a little short term spike for tomorrow.
We are going in this wave pattern of spikes each going higher with the increase of volatility and looks like this isn't going to reside anytime soon.
Curious to see it unfold with both DXY and the ES1! at different critical levels and see if they resume their course they've started this past week.
If we break the blue dotted trend then we will officially break out of a descending triangle that started since last March.
That all folks
potential GME upsideUsually do not do look at individuals but the level of attention this has brought has made it hard to ignore.
There is a tightening of the BB on here and currently trading within the two symmetrical triangles
While the indicators are looking like there is potential for upside Im really curious because every time this spikes the markets are usually down.
Super low volume would make any good sized inflow into this move easily.
That's all folks
US10Y Likely to PullbackTrade Safe - Trade Well
Regards,
Michael Harding 😎 Chief Technical Strategist @ LEFTURN Inc.
RISK DISCLAIMER
Information and opinions contained with this post are for educational purposes and do not constitute trading recommendations. Trading Forex on margin carries a high level of risk and may not be suitable for all investors. Before deciding to invest in Forex you should consider your knowledge, investment objectives, and your risk appetite. Only trade/invest with funds you can afford to lose.
Inflection of Inflections?On the top chart we have DXY closing above the top trend making it break out from a months long descending wedge.
On the bottom we have the ES1! at resistance on the bottom trend from a months long ascending wedge.
Lets see how it plays out across all markets.
Thats all folks
close today = breakoutThis has been a nice move up today and looks like this has gained a lot of momentum quickly.
Indicators are showing that this has room to run, when in times of doubt the dollar is still king.
The 10 year yield is still hovering around the 1.5 handle and did not retreat after the dramatic upward move yesterday, could be consolidating.
If this closes above the top yellow trend then this will have broken out of a yuge descending wedge thats been going since last year.
Mind you we are about to break down out of a yuge ascending wedge on most indices especially ES1!
If this coincides at the same time then wow lol.
That's all folks
Yield continue to pushesWe are in a precarious position in markets currently though looks like Elliot might do it again.
I Don't expect it to dip below the bottom trend.
Purple zone is the past supports for previous dips and looks like this will be a resistance or consolidation zone to come.
We have been in and out of overbought territory on the daily chart, though weekly and monthly looks like there is still plenty of room to run.
As far as how quickly it rises is another story but seems like Powell (in a funny way to me) oversold himself when trying to ease markets of all their concerns.
Copper is absolutely on a tear and that is obviously a inflation hedge so really curious to see if markets disregard the FED or resume everything else because of the new stimulus that is to come.
Everything is in a crazy way coming together and whatever happens with the yield I think no one will see it coming.
That's all folks,
AriasWave VS Fundamentals VS InflationLately I have felt that I need to touch on how AriasWave and fundamentals are inextricably intertwined.
AriasWave being primarily a technical analysis tool has led me to want to understand how everything operates on the macro level, although it is technical, humans are humans and these patterns are based on psychology and ever since discovering these patterns it has led me to ask more and more questions about how everything connects together.
I am not a financial advisor. This is just my own opinion. I encourage you to do your own research and learn the waves because they fit together, they are one and the same thing.
If you don't know the long term pattern shouldn't you be doing your research instead of just following the crowd?
10 yrIH&S pattern broke up the 200 weekly ema. Bond yields will most likely be testing around 1.66% and as long as the markets stay up I think we will enter a blow off top.
I can see 1.66% on the 10 yr or maybe even higher with sp500 making a monster run blow off top to 4200 plus B4 any larger correction.
10y-20y yeilds 20ema crossing the 200ema20ema crossing 200ema as the yield curve steepens. Usually not so good for markets. We will see if the FED can hold onto the market, I have no idea if they can or not. Goodluck!
Monday Morning Market BriefFutures are trading higher on Monday morning (at new ATH's again), to kick off the second week of February. The S&P tagged a 3900 handle with the democrats $1.9 Trillion dollar stimulus proposal back in focus. We've been discussing stimulus for quite some time now, and it seems the most effective stimulus is the one that never comes, just like the best trade deal with China, was the one that never came. The buy the rumour is the trade of the decade, as traders chase perpetual narratives of hope, and optimism, over valuations, growth, and logic.
Crude is catching a bid, and is showing a 60 handle, while the 10Y yield just saw it's highest level in almost a year at 1.20%. We discussed the path that rates are on, and the 10Y yield looks poised to test the 100 MA (w) around 1.355% as early as this week. We're also seeing Bitcoin at new high's around 42k off the back of news that Elon Musk's Tesla has bought over $1 Billion worth of the asset. Gold is rebounding off it's recent low of 1785.13/oz, and as of this morning, we're trading back around 1823/oz. The dollar saw some light selling on Friday after tagging a high of 91.60. We're currently sitting at 91.20 in premarket trade, and looking strong.
The Vix is back at a 21 handle, and is seeing some support just below the ascending trendline, which was lost on Thursday last week. We saw a low of 20.90 on Friday, but we've since caught a bid, and we're trading around 21.70 as of 8:30AM. This is among the lowest post March crash lows. The daily RSI appears to be reversing around a 45 handle, but is showing room for further downside in the nearterm, as investors and traders alike, bask in their quasi-inebriated state of euphoria.
The Put/Call is showing extreme complacency among investors, as evidenced by recent price action, but we haven't been seeing as many extreme skews as we were before. We're sitting around a .50 handle, with .30 - .50 range setting a strong mold for interim trade/sentiment. Finally, the SPY is set to open around 389, with essentially no resistance overhead, except logic. If the bulls don't show up with strong demand for risk, with participation being as horrible as it is the past few weeks, we may finally be in store for a notable correction. Considering the fact that there is no value in the market, instead of taking on risk via equities, we're taking a closer look at the cryto space, as well as commodities, for near term profitable trading opportunities with a low risk profile. More on this as the week progresses...
Thanks for your time today guys! Head on over to www.hedgeoftheworld.com for our live analysis to begin shortly. Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
Yields Could Reach 1.5% By End of 1Q.I'm just thinking of current FedSpeak. Of course they're setting the long-term outlook for rising rates. Nonetheless, the manipulation has begun.
10Y Yield Under Pressure From Strong Auction DemandThe risk free rate took a breather yesterday, and then again today, as (yesterday) the 10Y auction was a smash success, followed by a near record 30Y auction today. We saw $38 Billion in demand in the 10Y auction, driving yields lower, toward the 1.11% level. Then after the 30Y auction today, the 10Y yield was hammered back to 1.08%. Members of the FED made their rounds in the MSM, convincing market participants that the FED had no intention of tapering asset purchases, nor did they see the need to hike rates in the near term. Let's see how things progress as the YCC (yield curve control) conversation becomes the focus on trading desks everywhere. When will the FED institutionalize YCC? Could be as early as the next meeting on Jan 26th. But, I highly doubt they'll admit, yet again, to the world, that everything they've done, hasn't worked. Then again, I've been wrong before. who knew you could just simply change every rule in the book. I digress.
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10 yrdaily wick formed a bearish hammer IMO. Looks like yields want to retest the break out around .95. From there we watch, this means a pull back is likely coming to stocks at some point we r talking 16 basis points so could do some damage.
But the DXY looks a bit mixed up and also looks like downside should continue.
The 4 hour 10 yr chart looks strong so this will likely be very choppy and not a straight drop, my original target of 3880 top in SP500 looks questionable. Im basically day trading pulling quick profits until I think this drop is complete.
Still long my crypto XLM XTZ as DXY weakness is apparent and my TP $88.50 still not tested so I can't really be sure today whether the DXY gets massive support & bounces off said level or if that level fails as support. But the correlation between stocks & 10yr is much stronger than stocks DXY IMO. That being said The 10 yr chart looks very similar to DXY.
