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$XAUUSD: Monitoring positioning...Could gold be close to a long lasting bottom similar to the last time Commercial Hedgers covered their shorts and went net long? The last two times this happened we had a massive rally in precious metals each time. I do see some interesting variables at play that could prove a bottom in gold is happening. We have some potential fundamental variables that could contribute to that: The UK set a precedent for countries embarking on a more market friendly path, at the cost of rising deficits, to potentially attempt to save their local economies from the destruction rising rates and withdrawing liquidity (and hiking taxes) creates. If more countries start cutting taxes, and reversing their hawkish stances over time, we could see a reaction in the gold market. China is at an interesting juncture, with rumors of a change in leadership, a big CCP congress coming and people clearly sick of zero COVID measures, if there is a change in those variables it could also set some big trades in motion. Fed policy is already priced in by markets, bonds might be close to bottom or at a bottom, pricing in future rate cuts. CPI print coming, slowing of inflation would further reinforce the idea that maybe doing what the UK is starting to do makes sense. Many economists and fund managers agree that the Fed is making a mistake destroying the economy (and the world indirectly) attempting to curb inflation when the cause of inflation was govt action and lock downs and not monetary policy itself. A recession is clearly in motion, and won't be resolved too quickly, but the effect on gold and other commodities might be quick once these puzzle pieces align. From a technical, historical and positioning standpoint: Futures positioning is approaching a critical juncture, if Commercial hedgers cover all shorts, we will get a big signal to go long Gold. Each time it happened we had massive and lasting rallies in precious metals. At this pace, we can expect them to be flat or net long within 3-4 weeks. There is a Time@Mode weekly signal that expires in exactly 3 weeks! Yearly Time@Mode trend is up for another 3-4 years, and currently near a low risk buy zone with a stop @ 1517.18. If prices stay sideways after rallying above 1750, and maybe tagging the invasion level repeatedly, we could form a new yearly mode, which could propel gold higher for a few more years, once breaking out from the range, as per my chart. This fits with yearly time expiration in the long term $SPX chart and the idea that we are likely to see sideways/bearish action in markets to catch up to prior historical periods. Oil is likely repeating a similar move as the period in the year 2000-2003 as well, this chart idea from @timwest suggests we can get a correction in oil, to then get a big rally until it peaks near $500. This also fits with the idea that we could get a similar move in equities as in 2000-2009. A big decline in oil eventually sets the stage for support in equities with a time lag of 6/12 months as well. At some point, more governments are likely to reverse course on their destructive hawkish ways following the UK, this could be probable after elections if Trump wins the presidency in the US. Just something to consider, this is net bullish for gold and oil likely, as it would increase deficits and stimulate the economy to come back from a recession, globally. The culprit, is lock downs and fiscal policy more so than monetary policy errors, people will gradually realize this. All in all, I think the message is clear: odds of commodities outperforming equities are big, if we repeat a period like 2000 to 2011, or something like the 70s, and at some point we will get a clean shot at a bottom in oil and gold, which will likely be monster trades to put on. Stay away from equities, perhaps focus on miners, and other names that fared well in the aforementioned periods (some healthcare names did well, energy, gold and silver miners, copper/lithium). The EV adoption is a big fundamental trend as well, I think this sets the stage to get a big rally in lithium, for which I am positioned already in $LTHM. Have to time it well in regards to metals and oil, but we are getting closer to getting clarity on this home run trend and I think gold is a big and important cue to get a sense of timing here. Best of luck! Ivan Labrie.
OANDA:XAUUSDLong
by IvanLabrie
7
TLT 101.13 Target Achieved, New Pattern EmergingTechnical & Trade View TLT ishares 20+ Year Treasury Bond ETF Trade View 101.13 Target Achieved, New Pattern Emerging Bias: Bullish Above Bearish below 99.00 Technicals Primary support is 99.00 Primary upside objective 102.85 Next pattern confirmation, acceptance above 101.50 Failure below 99.00 opens a test of 97.90 20 Day VWAP bullish, 5 Day VWAP bullish Institutional Insights According to analysts at Goldman Sachs ‘ Based on our valuation-adjusted estimates of preliminary data from the US Treasury ,foreign investors net purchased long-term US securities in September. Foreigninvestors net purchased long-term Treasuries and US equities, and net sold long-term US agency securities and corporate bonds. Private sector investors drove flows across asset classes.Japan was the largest net seller of long-term Treasuries in September, on our valuation-adjusted estimates, as the Ministry of Finance Intervened in foreignexchange markets to support the Yen for the first time in 24 years. Our estimates suggest that this was the largest one-month net sale of long-term Treasuries byJapanese investors since the Treasury’s securities holdings data began in 2012(although March 2022 came close). Belgium was the largest net buyer of long-termTreasuries at the country level. At the regional level, Europe and Latin America netpurchased long-term USTs while Asia was a net seller’
NASDAQ:TLTLong
by Tickmill
TLT 99.19 Target Achieved, New Pattern EmergingTechnical & Trade View TLT Ishares 20+ Year Treasury Bond ETF Trade View 99.19 Target Achieved, New Pattern Emerging Bias: Bullish Above Bearish below 97.90 Technicals Primary support is 97.90 Primary upside objective 101.13 Next pattern confirmation, acceptance above 99.50 Failure below 97.90 opens a test of 96.90 20 Day VWAP bullish, 5 Day VWAP bullish Today’s New York Cut Option Expiries: 1.1695-00 (414M), 1.1800 (319M) Institutional Insights According to analysts at Goldman Sachs ‘ Inflation miss-fueled bond rally likely overdone.Through the week, Fedcommentary has suggested a strong preference to slow down the pace of hiking. The inflation miss—October core CPI rose 0.27% month-over-month,below expectations, with services inflation slowing somewhat more than our economists’ projections—makes the step down at the upcoming FOMC meeting more likely, though Fed speakers appear to have been laying the groundwork fora slower pace irrespective of realized economic data. Markets repriced FOMCOIS beyond this December even more aggressively, both bringing the peak rate back below 5% and pricing additional easing beyond the (lowered) peak. While The details of the CPI report suggest there could be some downside risk to our current projected CPI path, we do not believe this materially changes the risks of hike cycle extension. Outside of unanticipated activity weakness (that is as yet not visible), we see a fundamental inconsistency in this price action. While a deepening of forward curve inversion is indeed appropriate when anticipating a recession, given the underlying strength of the economy, we believe the Fed will need to raise rates above current peak pricing for that to occur; a higher terminal rate, in turn, is more likely if inflation remains uncomfortably high. Either Combination—a higher terminal rate, but current levels of inversion, or the current terminal rate, but less deep inversion—argues for both higher end-2023 forward rates a higher average level of rates over the next two years. In case of the former, the cuts being priced offset the hikes earlier in the year, leaving net Fed pricing for 2023 one of the least aggressive among G10’
NASDAQ:TLT
by Tickmill
2
2022-???? Bear Market to be labeled as: Bond Bust!Recession, Stagflation, Inflation, Dollar Strength, Russia/Ukraine War...how about labeling the current market turmoil what it really is; A Bond Bust! As you can see from the monthly chart below, in Jan 2022 the US10YR Yield bullishly broke the neckline of an inverse H&S that formed between June 2019-Jan 2022; then in March of 2022 it broke up again from major downtrend line. (I wrote a post about this in March 2022 saying we were in "Unchartered Territory" and the US10YR must be watched). If the Inverse H&S plays out it means we will see interest rates in the 7.5-8% range at a minimum in the near term. (Two things worth noting: 1. Nothing about this chart is bearish nor can you say it is showing any signs of reversing anytime soon when looking at it from a long term perspective. 2. Based upon charting theory-H&S patterns usually play out IF they are formed at tops or bottoms) Most people think of bonds as a "relatively safe" investment vs. other types of investments so when you have the below loss on a "relatively safe" investment it should send out shock waves: 2022 YTD TLT LOSS: -34.12% TLT High to Low during current bear market (Years 2000-2022): -48.89% A 20 year US Bond ETF losing almost 50% within 31 months should be shocking AND, as stated above, yields are not showing any signs of reversing! Here are the YTD Losses, as of Friday, in the US Indexes. NDX: -30.08% RUT: -19.29% SPX: -19.04% DJI: -10.99% Would you have ever thought that TLT would outperform NDX in YTD losses during a bear market? Before 2022, I think 99.9% of traders would state this would be impossible. And yet...here we are with only two months left in 2022. Now to the monthly charts of the DOW/DJI. I wanted to have a look at this chart since it has held up relatively well to see how the current monthly chart compares to other bear markets (Defined as a greater than 20% decline close to close). The green line on the charts is the 15 SMA...I also added some horizontal highs/lows based upon the high/lows of the last time price made an ATH and then closed below the 15 SMA and then back above it BEFORE a bear market formed. No two bear markets are the same so it's really about the relationship of the 15 SMA and the horizontal pink & red lines...what this analysis tells me is we will most likely test the March 2020 low at some point in time...we might come back up and re-test the ATH or go a little above it but statistically speaking if you look at the bear markets of the last 100 years in the DOW a new bull market is not us! Oct 2022 could however provide a temporary low! (Exceptions: 1917 & 1987 bear markets) Key take aways: 1. The US10YR Yield; followed by the other common known Treasury Yields, should be the most discussed topic and how those charts affect money flows into different types of investments instead of all the other FUD out there! Remember: Money chases yields. 2. The chances of us re-visiting the Covid lows in the DOW are high given the above analysis. 3. NDX doesn't like high Treasury Yields as it's currently the weakest of the US Indexes and very weak compared to the DOW. Its history isn't as vast as the DOW so its anyone's guess as to how low it could go or how long it could take to make another ATH. It's not an Index I'm looking at buying anytime soon as Yields have made a clear signal that the 40 year downtrend has ended so we need to change our thinking in this new environment! 4. January seems to be a topping month while October seems to be a bottoming month however that is probably just a coincidence as this was not the case in the early 1900's. There is a lot to take in above so I hope it makes sense after you think through it...I know it's not a quick read!
TVC:DJIShort
by Vixtine
3
TLT Targeting A Test of 99.19Technical & Trade View TLT (ishares 20+ Year Treasury Bond ETF) Bias: Bullish Above Bearish below 93.27 Technicals Primary support is 93.27 Primary pattern objective is 99.19 Acceptance above 95.40 next pattern confirmation Acceptance below 93.20 opens a test of 90.30 20 Day VWAP bearish , 5 Day VWAP bearish Notes US CPI released today, volatility expected around the print Goldman Sachs expects ‘a below-consensus 0.44% increase in core CPI in October (vs. 0.5% consensus), which would lower the year-on-year rate to 6.46% (vs. 6.5% consensus). We expect moderate increases in both food and energy prices to raise headline CPI by 0.49% (vs. 0.6% consensus), which would lower the year-on-year rate to 7.8% (vs. 7.9% consensus)' Going forward Goldman 'expect monthly core CPI inflation to remain in the 0.3-0.4% range for the next couple of months before edging down to 0.2-0.3% next year. We forecast year-over-year core CPI inflation of 6.2% in December 2022, 3.3% in December 2023, and 2.7% in December 2024. The deceleration we expect in 2023 is driven more by goods than services categories'
NASDAQ:TLTLong
by Tickmill
TLT heads up on where SPY is headingPreviously, mentioned about how TLT, UST10Y and SPY have a special relationship where the former two leads the latter. And overlaying the SPY on the TLT daily chart, there is a warning given… That TLT is heading down given that it failed a resistance level at 98, and more recently at 95. Support is at 93, and failing this brings TLT near its recent low. The MACD is turning down, while the Vol Div clearly crossed down. Oddly enough, while the correlation between SPY and TLT is uncanny, the SPY is still far off it’s recent low. A suggestion to manage risk surely? Hint hint. IMHO, this another indication that the SPY is revisiting its last low… especially when TLT does that soon.
NASDAQ:TLT
by Auguraltrader
TLT -- When I'm Going to Thinking About Going Long 20 Year+The short answer is: at pre-Great Recession levels when the yield on the 10-year T note was at 5.0% or above. Current forecasts for the terminal Fed funds rate are for 4.75-5.00 in February of 2023, which could push the 20 year+ paper exchange-traded fund back to near 2006-2007 levels between 80.50 and 82.05. (See, $TNX, June '06 high, 5.245, correspondent with a TLT 82.56 low; June '07 high, 5.316, correspondent with a TLT 82.20 low). If current bets as to the terminal rate are correct, we should fall short of the 2006 and 2007 levels, but could nevertheless be pretty darn close. And since current bets are that the Fed Funds rate doesn't come off 4.75-5.00 until much later in the year (the current forecast, is, ugh, November of 2023), this would conceivably require a good amount of time to work out. As we've seen, however, things can change. A few months ago, bets weren't being made on a terminal rate quite this high and that a potential cut would come far sooner in 2023. But, here we are. Inflation could either remain "sticky," or come down rapidly in response to what the Fed has done so far, in which case, we never see the low 80s in 20 year+ maturity paper. Naturally, if we do get there, I'll look to dip my toe in, whether it be with short puts (which would be a quasi-acquisitional play, most likely in my IRA) or something more directional, like a long call diagonal or a zebra/call ratio backspread ... .
NASDAQ:TLTLong
by NaughtyPines
Great Trades are Rarely Crowded: Long TLT and Short Twitter IQEveryone is a good trader in a bull market, but in a bear market, these good traders are reduced to hopium-fueled twitter analysts watching core CPI and interest rates. The former and latter data points serve nothing more as useless, out-of-context generalities for the single-celled Wall Street Bet retail enjoyer. But recent activity across the pond has sparked interest in the bond. These traders are now converting en-masse to self-proclaimed bond market experts with the thesis: "The bond market is broken" Except, the bond market is not broken. It is operating as intended, although two lines on a chart may disagree with anyone unfortunate enough to buy at the start of the year. Why is retail sentiment like this? The simple answer is that the fed is late, but a more-elaborate explanation follows: Bond yields rise because bond prices fall. It is the acquisition of a bond at a specific market price that determines that bond's yield, as a function of the difference between that bonds underlying rate (which is fixed) and the resale price. When interest rates rise, bond prices fall because newer bonds spawn with the higher base rate. This makes prior bonds, which have a lower fixed rate, less valuable because they output less extra cheddar. People then resell these bonds for a lower price and the yield rises according to market forces (the fed does not directly control this). Shorter duration treasuries follow interests rates very closely, whereas longer dated treasuries are difficult to influence by rate hikes. Either way these are secondary or tertiary market effects. This phenomenon is what results in an inverted yield curve: you can be paid more money to lend money for a shorter duration than a longer one. But why would something so illogical even happen? The answer is because the treasury market is not just any pig, it's a truffle-sniffing pig. For every brain cell in the equity or corporate credit market, the treasury market has a thousand-fold more. With these one-thousand brain cells, this pig (specifically the longer-dated pig) is rewarded by looking further ahead into the future. What does this pig see when they look that far ahead? An recession that will obliterate the equity market like Exodia. The long dated treasuries have started to price in a recession (very slowly) by pricing in rate cuts. This is why stocks and bonds are still correlated, but the correlation has started showing signs of weakness. The longer tail of the curve is smarter and refuses to sell these bonds like a fire sale. Recessions imply a fed pause and eventual rate cut, so no more high-interest treasuries. This makes bonds desirable, and this process is only starting now. I can already feel the credit market enjoyers seething and muttering: SLR relief expired! Reverse Repo! Basil Tea! No, none of these buzzwords matter. It's true that the pandemic has modified the initial conditions of the bond market. The TLT suffered immensely as the federal reserve promised to not raise rates through forward guidance, broke those promises (as is should have), and also allowed SLR Relief exemptions to expire. This made bonds less sexy and glamorous for banks like JP Morgan because the expiry affected treasury exemptions: banks didn't need to hold additional collateral to slurp bond yields, and now they again do. It's much easier now to park money with the fed overnight and get a little more back. The RRP is a much better facility than treasuries as a result, so bond indexes have dropped even harder. SLR relief is a cherry on top, but this truffle has always tasted good without it. It's absence, and whether it is reinstated or not, should not be a determining factor in the recovery of bond prices, because: No market has currently priced in a recession, and interest rate expectations demonstrate that without a chart, but when that happens, the bond market will get top billing. Bonds will decouple from stocks and TLT will rise from the ashes like a phoenix in the next quarters, incinerating twitter and reddit soys drawing lines on a chart and shorting the index. Nobody saw it coming, they will say, but good trades are never crowded. Smart money extracts the deep value from TLT in the pre-recessionary market by going long (DCA or otherwise). Degenerate smart money is gambling with TLT long calls. Whereas most of the market is still buying stocks, crypto, and chanting that the markets are broken and the fed will come roaring in. These pigs won't find any truffles in this market. Interest rate expectations are unrealistic and the fed will have to pause sometime early 2023. The recession will destroy demand, taking growth, inflation, and equity market with it, rising bond prices and dropping bond yields. The stock market will crash (I don't consider this current price action a crash yet) and continue burning even as the fed pauses, and dip buyers will be buying a dip that keeps on dipping while you're selling your new truffles on ebay because you lost your job due to mass layoffs across the entire economy.
NASDAQ:TLTLong
by coinhoIio
10