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Bonds

Bitcoin, Treasuries, USD Retesting, All Telling Same StoryWhatever your opinion of these assets, they're all behaving in a fairly similar fashion, and they all have been behaving somewhat similarly over the last 3 years. No surprise, bitcoin and foreign currencies ten to outperform when financial conditions are loose and loosening. The vice versa is likely true as financial conditions tighten. Interestingly, if you pull up the charts on an individual basis, they all are retesting flags on a technical level. That doesn't mean they won't break back up and rally, but all three showing the same sign seems to add more weight behind likelihood that markets are in for a break upward in real rates and reduced liquidity / financial conditions.
TVC:US30Y
by GTStockmaster
10 Year Note Yield - 2%+ Ahead Into June - AugustThe Price Objective remains 2.28%. Beyond sewing the usual seeds of discontent, observe the Larger Monthly Indications. The above Chart is of extreme importance, it demonstrates how Capital Stocks begin to turn, Glacial at first, as Momentum builds, they begin to accelerate. This will end up a 4 or 5 part series discussing the potential impacts. _____________________________________________________________________________ Price has broken above 2 Key Downtrends. It is attempting to reach the 3rd, which has acted as resistance for years. This is a material change in the underlying Bond Market Note Structure. It is no longer the conventional depository for Principal and Coupon as a great many believe. ______________________________________________________________________________ Capital Stocks are in need of review: Real Estate - the Hybrid / Principal and Coupon (Rents) A Negative correlation to Higher Rates with cascading effects to Higher Rates. A 70% increase in Conventional and Jumbo Mortgage Rates would see a 18 to 24% drop in the Price of Residential Real Estate. Equities - the Buyback / Prop where Corporate Debt is used for Buybacks Increased borrowing Costs temper Buybacks, Inflows do not. This is a double edged sword we will discuss in detail. Bitcoin - The repository (Not Depository) for excess Liquidity. BTC has a Positive correlation to rising Rates. BTC has a Price Objective near $137K at the extreme extensions for Rates of the 10 Year Note Yield. Bills / Notes / Bonds / - Debt instruments with attendant Hybrid function of Principal / Coupon. ______________________________________________________________________________ Bonds (prior to 2006) were traditionally a function of the Business Cycle which has been supplanted by the Credit Cycle (no longer a Cycle by appearances). Prior to 2008 Congress would pass a Bill in the Legislature, after speaking with the US Treasury to determine how to "Finance" its Fiscal requirements. Once the Bill was passed and signed into Law, the US Treasury would conduct operations with the Federal Reserve Central Bank in New York to issue the increased Credit/Debt (The FED taking their statutory 6% issuance) to the US Government. Bills, Note and Bonds would be placed with Primary Broker Dealers (Fed Member Banks) and offered at "Auction" to the Public, Institutions, exogenous Central Banks, Funds, Swaps and overnight Swaps for shorter duration T-Bills sweeps. This funding mechanism for DEBT no longer exists. FASB 56 - took the Governments Budgets and Funding "Dark" as a "Matter of National Security". The General Purpose Federal Financial Reports are Classified Documents. The material Facts of FASB 56 - files.fasab.gov 13 Short Pages well worth educating one's self as to how the Government conducts itself. TARP/TALF were undisclosed Operations which maintained their Shadow Financing for years. 94% of Americans were against Commercial Bank Bailouts. Privatizing Gains while publicly subsidizing losses was viewed with extreme displeasure. ___________________________________________________________________________________ Over the past 14 Year, we see the outcome(s) - Interventions in Auctions by the Federal Reserve, Yield Curve Control, the Outright Purchase of RMBS/MBS again (this began in 2004 in size as the Federal Reserve's concerns over Real Estate began to mount). The FED has become the buyer of Last Resort - currently @ $8.758 Trillion in Assets of which $8.296 are "Securities" - this excludes "Shadow Operations" of FASB 56. In less than 2 years, the Federal Reserves Balance Sheet rose from $4.212 Trillion to more than Double that amount (NET of Shadow Operations) I estimate Shadow Operation under FASB 56 to be in excess of $3.8 Trillion - this excludes the Trillions missing from the Federal Coffers @ DOD, HUD and a great many other Agencies. _________________________________________________________________________________ Follow - On commentary will begin breaking down the Trends and discuss the potent outcomes and timeframes for each Capital Stock. There is a large amount of information to be discussed, requiring a methodical analysis of all points on the outcome curve. More to follow - HK
TVC:TNX
by HK_L61
5
Bonds Gain as Stocks Sell OffBonds have picked up as stocks have sold off due to increased risk sentiment. We have edged up to 131'02, the technical level we discussed yesterday. The Kovach OBV has picked up significantly, but is starting to level off as ZN finds value in the low 131 handle. We are gradually trekking up in a zig zag pattern, but will face resistance at the next technical level at 131'12. This is a relative high for December which will be difficult to break as we enter the holiday week for Christmas next week. We should have support from below at 130'26 and 130'19.
CBOT:ZN1!
by quantguy
2
The Only Trade You Need to Make This Year. #SteeplongendThe long End Of Yield Curve will steepen. Inflation running hot and CB can't hike rates. Nobody will buy 20-30Y. Yields Run, TLT Plummets Double Top with Divergence. Both, fundamentals and Technicals there. This may be the only trade you need to make this year. Everyone will continue to believe inflation is under control until they don't. This is a trade we can actually see happening in front of us but, nobody has this priced in yet.
NASDAQ:TLTShort
by CptSafety
19
The Bond Marekt Awaits Inflation DataBonds have continued their slow decline trough support at 130'07 and are hovering just above 130'00. We are starting to see support form in the middle of the vacuum zone between these two levels, confirmed by two green triangles forming on the KRI. Both Kovach momentum indicators have dropped precipitously, which might indicate that we are staring to become oversold and that 130'00 is a floor for now. If we see a relief rally, watch 130'07 or 130'19 for a target. If we continue to decline and break 130'00 then 129'26 is the next target. ZN is likely not to make any significant moves until CPI data comes out this morning.
CBOT:ZN1!Short
by quantguy
Is that a recession on the horizon? (TL;DR @ end)In one of the previous ideas I published, I addressed the rising concerns many people have regarding exchange traded funds, or at least the ones that use various indexes as a benchmark for weighting and distribution. Obviously, linked to this would be the concern of a crash in the whole of the U.S stock market and possibly all western markets (I can't perform an educated judgement on eastern markets as I have limited knowledge in that regard). Unfortunately for the United States economy, the situation has been looking rather dire. There are countless reasons to why I say this, two of which I must mention, are: 1. The inflation rates in the US that have increased to 6.2% according to the consumer price index. 2. The democrats' (likely successful) attempt at raising the debt ceiling for the government to avoid default. Not only are these 2 signs very concerning as far as economic stability but, like every recession prior to date; had stocks trading at the highest levels ever recorded. Which is exactly what is happening right now as you read this. Luckily for bond holders and unfortunately for borrowers, in response to these increased inflation rates, interest rates are also destined to rise. The effect of this was seen today in the US 10 year state bonds ( TVC:US10 ) as they increased by just under half a percentage point in price in 24 hours. This may be a good time to transfer some of your stock holdings into state bonds for the sake of safety, before the potential recession. The other concern is how ludicrously high the market is trading. If you take a look at any of the major public corporations, you will notice that they are trading at earnings multipliers that are astronomical (that's actually an understatement) but despite this fact, many people are still buying stocks at an alarming rate. If you take a sneak peak at the news, you will see a huge portion of traders all 'screaming' "buy more, buy more", regardless of the fact that 90% of stocks and crypto are trading at ludicrous prices and are bound to take some sort of fall at some point in the near future. I am writing this just to put the thought in the back of some of my fellow investors' minds, hopefully might make them re-evaluate their portfolio distribution and possibly have a bit of cash at hand to buy some of the bargains that will come out of the next recession. As usual, other opinions, facts and news are always welcome, stay safe and comment away! TL;DR: There are a couple of signs of a potential recession on the horizon, between overpriced stocks and crypto and people's ludicrous spending in the market. When this recession may occur is not for my prediction but given increased interest rates, I would suggest converting some of your liquid assets to state bonds and/or cash so you can take advantage of the coming bargains.
SP:SPX
by Michael_Axio
Fade the rally in yields: What is the bond market telling us?We stand at a crossroad. First, market conditions mirror the global economy in 2018. Back then, the FED was getting to raising rates when the Eurodollar curve inverted. Flattening US bond rates too indicated that economic growth in 2019-2020 would would slow. Now, the FED is expected to be aggressive on asset purchases taper in next week's meeting. Three rate hikes have been priced in the markets with the first rate hike in May 2022. A ghost from the past - inverted Eurodollars & flattening US bond yields - is back to haunt the markets. This implies growth is expected to slow down at least during the next two years. It is important to notice the bounce in US yields should be used to fade out of equity positions in the recent rally and into bond positions across the curve. Buy long-term, sell short-term durations. Bond volatility has soared I think the past two weeks indicating that something heavy is brewing under the surface.
TVC:US10YShort
by GrizzlyBearBee
3
The "TLT" Bonds (Updated)Auctions have been releasing offering higher rates as of late. Our previous target of 61% retracement has been rejected so far. On the 1 hour, the previous high was broken with no new lows being made. On the 15 min we are at a light support. I would like to see a stronger support, however, due to recent auctions and higher yields, I could see more bonds being bought soon even with the Fed tapering. Let's see what happens. Yields normally fall when the price of bonds rise. This could be bullish for investors.
NASDAQ:TLTLong
by Redimere_91
20 year plus bond etfSince mid July, The price of the 20 year plus Bonds has touched or tested the top orange line about 8 times and has retraced 61% more times than not. Bonds going as low as $148 would meet the 200 ema and would be a retracement of 61% of the previous low. The previous has been broken. Let's see where the next level of support is. If this falls, the Yields should rise. Normally, stocks fall "for the most part" when this happens. Let's see if this holds true!
NASDAQ:TLTShort
by Redimere_91
US 10Y Bonds...What Do We Know?TVC:US10Y With the wild drops in the market over the last few weeks, I have considered turning a greater percentage of my portfolio to bonds. Listed in this article are the findings of my research. Todays Yield closed at 1.341%, investors receive a coupon of $1.375 semi-annually. Wow...That is pretty discouraging. With insanely low interest rates this year, (Note interest rates and bond prices are inversely related), bonds are expensive for very little yield. The feds have released data on a 6.20% inflation rate which is rather naive in my opinion, considering they continue to print money. The M2 Money Supply measures the total cash and equivalents in the USA, this grows on average of 11.31% a year, we are at a YTD of about 37%. Over three times the average currency printed. This large money supply is a main factor in why interest rates are so low. So will interest rates ever grow back to their pre-COVID levels? That is not for me to answer, as I have no idea. I enjoyed a projection done by @RealMacro about how we are rapidly heading towards a recession. I believe all investors can agree that it is perfect market conditions for a recession. Many investors are very new; they have never experienced a recession, this has come from the meme stock phase. Will investors begin pouring into fixed securities? Is the security worth the expensive costs and low yield? Will the feds continue to purchase bonds back? It is important to note, when the Feds buy back bonds they are increasing the money supply in the economy by swapping bonds for cash, and opposite when selling bonds. If the Feds wanted to cut back inflation wouldn't it make sense to sell more bonds? But by cutting back interest rates, would investors really have an incentive to purchase bonds? Key Notes: M2 Money Supply Measures the total cash in circulation Bond Buy Backs - Increase Money Supply Bond Sell Offs - Decrease Money Supply Money Supply and Interest Rates are inversely related Bond Prices and Interest Rates are Inversely related Bond Yields and Interest Rates are parallel NOT INVESTMENT ADVICE - I am not a licensed Advisor
TVC:US10YEducation
by braydenboyko
Bonds Consolidate, Breakout Soon??Bonds have consolidated as we have expected. We are seeing strong support at 130'19, and appear to be forming a flag pattern bounded by 130'07, and 131'02. The Kovach OBV is trending up slightly, suggesting a small bull bias. From here it could go either way. The Fed is discussing tightening, which would be bearish for bonds, but persistent risk off sentiment due to the Omicron strain could give ZN a lift, though it appears this may be priced in by now. We will see continued support from the upper and lower bounds of the range. Volatility has consolidated quite a bit so we expect a breakout either way potentially soon.
CBOT:ZN1!
by quantguy
1
Bond to Bitcoin CorrelationHere is a brief correlation between bitcoin and bond price action. Hope you find this useful! I haven't been posting much due to what's going on in the economy. Switching up my approach. We all know when bonds rise, yields fall. When bonds fall, yields rise. Think about this when reading this chart. Good luck to the HODL! Feel free to follow or simply keep up. I'm working on getting better always so bare with me. We all know what kind of journey this is! Would love your support!
COINBASE:BTCUSD
by Redimere_91