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TLT

Bond yields keep fallingBonds all across the world, across all different spectrums (from gov bonds to junk bonds) have been rising (their yields falling). This is a signal that there are deflationary pressures and that people are searching for yield in an environment with few opportunities. There are other reasons too, but overall this isn't the best signal. Clearly big corporations and governments are benefiting from the situation, but this is also a fragile situation. Although the current conditions benefit some stocks and risk assets due to the highly negative real rates, this doesn't mean that everything is perfect. Personally I believe equities haven't topped and they have much more room to grow from here, but I also think a big correction isn't far away (10-20%). In my opinion bond bulls are in control (bearish on yield) and yields could fall even lower.
TVC:US10YShort
by BitcoinMacro
5
Closed (IRA): TLT August 20th 143 Covered Calls... for a 142.60 credit/contract. Comments: Hit my order to take this off at or near max today. (The max would be 143.00, so the order I stuck out thereI took it off .40 short of that). An über long-running covered call setup with the last acquisition of shares around $110/share. (See Post Below). Unfortunately, I didn't keep good track of short call premium over the years (yes, years), but I made at least the difference between the last acquisition at $110 and what I got out of it today or 32.60 ($3260/contract) plus the 7.93 in credit per contract I kept track of since the beginning of the year. 32.60 + 7.93 = 40.53 ($4053/contract) (plus, of course, those smidgeonly monthly divvies). I'll look to re-up if it ever starts paying decently again (e.g., >3.0% annualized), but I may be waiting a very, very long time for that happen. It's paying a scant 1.481% annualized now.
NASDAQ:TLT
by NaughtyPines
TLT Breaks Out of Descending Wedge to seek new All-Time Highs?Using the same fractal analysis method I used to forecast the BTC dump & dead-cat bounce, I began watching US Treasuries as TLT was set to break out of a descending wedge. Now that it is has, I'm publishing the idea for others to weigh in on. If the pattern plays out we could see new all time highs; which suggests we could be entering another period of recession much like the financial crisis of '08. I do not currently have a position & this is not financial advice. Just sharing observations as they occur. If you wanted to play the pattern, TMF(long) & TMV(short) are leveraged ETFs you can use.
NASDAQ:TLTLong
by jsgiardino
1
Black Swan - Transitory InflationIdea for Macro: - I present to you a counterargument for the media blaring inflation narrative. - Speculate that the interest rate hikes (Jackson Hole, etc.) are just red herrings. In fact rates may go negative. - The real shocker is that everybody is positioned for inflation when inflation is at its peak and is indeed transitory. The reflation trade was debt driven and is supported by nothing but hot air. “Inflation - A continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services” - Merriam-Webster Actually global credit impulse is rolling off. - There are 3 types of inflation that are relevant: Monetary, Consumer Price, Asset. (Lyn Alden, www.lynalden.com) Monetary Inflation: "In highly indebted economies, additional debt triggers the law of diminishing returns. This fact is confirmed when the marginal revenue product of debt (MRP) falls, where MRP is the amount of GDP created by an additional dollar of debt. In microeconomics, when debt is already at extreme levels, a further increase in debt leads to an increase in the risk premium on which a borrower will default suggesting that the bank or other lender will not be repaid. As the risk premium rises, banks are often unable to price this additional cost through to their private sector borrowers thus the loan to deposit ratio of the banks falls. Combining both the falling MRP with a declining loan to deposit (LD) ratio, results in a reduction in the velocity of money. In terms of the impact on monetary activities, a drop in the LD ratio means that more of bank deposits are being directed to the purchase of Federal, Agency and state and local securities in lieu of private sector loans. The macroeconomic result is that funds are shifted to sectors that are the least productive engines of economic growth and away from the high multiplier ones." - Too Much Debt, Hoisington Investment Management Co. - Yes, you have M2 skyrocketing, but compare it with Debt and adjust for inflation. Wow, It did nothing to debt levels. GDP adjusted for inflation barely recovered: - M2 doesn't exist in a vacuum, but needs to be balanced for deflationary forces. Debt is winning. - Yes, you have consumer price inflation and asset price inflation, but these are largely driven by speculative bubbles. They are not driven by fundamental factors nor underlying conditions. They will regress to the mean by Reflexivity. - Yes, there are supply chain issues due to COVID + political tensions, but how long will it last? Are the political tensions even necessary? What happened to lumber even with supply chain issues? - What is even the reason for continued asset purchases by CBs? IMO, asset purchase tapering is done to engineer a crash in the speculative asset bubbles, so that more extreme monetary policies can be enacted to try to stop the tidal wave of debt. Once the speculative asset bubble collapses, consumer price inflation will be controlled as well. In fact there will be a dollar shortage, as each dollar is leveraged 50x+ vs. debt. - CBs don't care about speculative asset inflation okay? Not a big deal. Bubbles even pop by themselves. Price of Big Mac and used car goes up a little bit, boohoo. - Evidence to support my thesis is falling inflation expectations. Inflation expectations are what drives asset prices up. If inflation is expected to decrease, then the prices of assets are expected to decrease. Why would anyone hold an asset expected to depreciate in price? Signals of falling inflation expectations: Inflationary yields: Inflationary currency pairs: FRED inflation expectation rate: fred.stlouisfed.org Gold - you might see something crazy happen here. This can be the end of a distribution pattern: Inflationary Commodities: - The stock market is one of the last markets to receive liquidity trickling down from the source. Currencies, bonds, commodities lead them and stocks should not be used as an indicator for future inflation expectations over them. - Right now, the world is positioned for inflation and are looking for interest rate hikes as the signal, but that won't be catalyst. - Inflation and liquidity flows have been cut off at the source, and now we are at the cliff of the debt driven sugar rush. There must be great suffering in order to justify more extreme monetary policies. Then and only then will you have sticky inflation in a stagflationary environment. "Inflation is transitory" - Jerome Powell GLHF - DPT P.S. Disclaimer - I am relentlessly selling risk assets, long volatility and bonds.
FRED:WM2NS
by UnknownUnicorn1043646
2
Lookout! The Wealthy Are Shorting The Economy20 year yields appear to be breaking out of a long downtrend which has witnessed a boom in the stock market since this asset's crash back in March of last year. But now the winds seem to be shifting possibly again as now the TLT has started July with fireworks and yields appear to be flipping bullish. This would be very bad for stocks.. however please keep in mind that this is a lagging indicator. Sometimes it plays out in perfect sync, sometimes it takes months to come into effect. Which means, the remainder of the year should be safe for equities. 2022 however, if 20 year yields confirm bullish, would be fair game to see the real crash in the stock market that many have been waiting for. A play on bonds could be the potential bet/hedge in the distant future. If you enjoyed this post please leave a like :)
NASDAQ:TLTLong
by TradeVibez
Gold BreakoutLike the seasons, the markets appears to be attempting a shift. I made a recent post about long term treasury yields flipping bullish this month so far and now Gold appears to be doing the exact same thing as it has seen a beautiful breakout of a descending broadening wedge. This is one of the more bullish patterns that exists, which means if this monthly candle shown on the chart confirms, big things could be in store for the precious metal. Keep a close eye on this and the stock market as a whole as the year goes on. If big money starts aggressively piling their cash into hedges such as gold and bonds, that could mean bad things for many of the overvalued stocks out there. This would especially mean bearish things for speculative tech stocks and cryptocurrencies.
FOREXCOM:XAUUSDLong
by TradeVibez
Are the bond bulls in control or is it time for a break?Bonds have reached a very important level. For now this seems like a *logical* place for the *anti-reflation* / deflation trade to end, and for the risk on trade to be back. I am more on the disinflationary (very low inflation) camp, however bonds have risen substantially and it might be time to take some profits before the resume lower. I don't think we will have extremely high inflation yet and I don't think we will have the good type of inflation because things are going well. I do expect Oil to go higher and that to cause all sorts of issues and higher prices, but other than that I don't think bonds will get crushed. At least no yet. The key question for the whole reflation trade is... WIll bonds and USD keep going higher, with only US behemoths rallying or and the rest bleeding or struggling, or could we get a larger shock? Because to me if the USD really breaks out and heads for 96 on the DXY, while bonds also rally... we will eventually see something break. I think we'll soon have a better idea of where things could be heading next so it is better to be patient and take a few select trades that go well with this environment and look technically sound.
NASDAQ:TLT
by BitcoinMacro
1
Deflation, NOT Inflation, the Real Threat to the Stock Market?I am a contrarian. Many successful investors and traders tend to be. Following the crowd isn’t the best financial advice. Recently my contrarian spidey senses have been going off. If you have been following the Stock Markets, and particularly, the fundamentals, you have heard the word inflation be mentioned once or twice. Who am I kidding! That’s all everyone talks about!. The Fed is talking about it, the financial media is talking about it. And for good reason. When I worry about recent inflation, and future inflation I look at it two ways. Firstly, inflation is about a weaker currency. If a currency is weak, it takes more of that weaker currency to buy something. Hence the rising price. Regular readers may recall my worry about the currency war. Nations want a weaker currency to keep assets inflated and to boost exports for economic recovery (mainly the Euro and the Yen on the export front). The second worry regarding inflation is the current situation. With government checks and such, we are in a situation where there are people with more money competing for the same number of goods and services. Productivity is the key, and what we have to increase in order to warrant that extra money supply. Productivity will be a talking about in the near future, especially if we see more supply chain issues. I have heard that there are many young people on golf courses talking about how they will never go back to work. They have made more money trading stocks and crypto’s! This macro look is a bit different than the Federal Reserve. The Fed is telling us that this inflation is temporary. “Transitory” is the word they use. This type of inflation is only occurring due to economies re-opening and people beginning to spend money. Money velocity is increasing. The Fed is NOT raising interest rates, even with inflation data coming above 5% and hitting decade highs, because they believe once consumers begin shifting purchases from goods to services, the inflation will come back below the 2% level. Billionaire hedge fund managers (some still active) such as Ray Dalio, Stanley Druckenmiller, and Paul Tudor Jones have come out sounding the alarm bells on Fed policy and the inflation trade. The Fed will need to raise rates sooner rather than later to avoid major inflation. But, the markets seem to be calling the Feds bluff. Everyone knows the current market environment is all about speculation. Cheap money from the Fed helps. The party keeps going. If the Fed was going to raise rates, many expect the stock markets would tank. They would take a big hit on the taper tantrum. This could be the reason the Fed does not want to raise rates, because of the potential financial crisis that could snowball. Leveraged trades, pension funds, major banks could be affected on a large stock market decline which would trigger a larger crisis. Some say the Fed is trapped, and transitory inflation is a way for them to delay rate hikes for as long as possible. Let’s not forget that there is more debt out there, so a rate hike would make payments more expensive for consumers and for government. But now I want to turn all of this on its head. Pull a 180 turn. What if Deflation is the real threat and NOT Inflation? Inflation signals are: 1.Rising Interest Rates (A Fall in Bond Prices) 2.Rise in Foreign Currencies (Euro, Loonie etc) or another way to put it, a fall in the US Dollar 3.Rising Gold Prices Deflation signals are the opposite: 1.Lower Interest Rates (A Rise in Bond Prices) 2.Rise in the US Dollar 3.Falling Gold Prices Let's see what the chart's tell us: Above are the daily charts of the US 10 year yield, and bonds. I have chosen TLT, but you can see the same on BND. Just remember: there is an inverse correlation. When bond prices rise, yields drop and vice versa. Looking at the 10 year first, do you all remember when the rising 10 year yield was spooking financial markets? Interest Rates were rising, fueling perma bear doomsday market crash scenario’s. Now, we hardly hear about that. And for a good reason. The 10 year yield had to hold above 1.50% for further upside momentum. This did not happen. We have not closed below 1.50%, and it looks like yields are heading LOWER. In today’s trading, yields are puking. A 5% decline at time of writing. TLT might be the important macro chart for the next few months. We have triggered an Uncharted Market Structure pattern. We would be going long, and expect more upside as long as TLT remains above 140. This means higher bond prices, which is big for two reasons. First, it ticks a deflation criteria box. Secondly, it will test the asset allocation model. Money tends to run into bonds when there is a risk off environment. Meaning money will LEAVE stocks for bonds. Perhaps this is signaling an event in the near future which will cause money to run into bonds. Deflation anyone? DXY chart is the chart for this idea. Currently, we are in some Dollar long trades based on the daily chart meeting Uncharted Market Structure criteria. But the weekly chart is hinting at further US Dollar strength. The 89 zone is major support. The Dollar found support there and ranged for weeks, before shooting higher. It seems like a double bottom pattern is in the works. Once again a bit worrying as Dollar strength generally means something is coming down the pipeline. Money flows into the Dollar when things are uncertain. It is a safe haven currency. OR, the Dollar can finally be playing out as I have said months ago. In this currency war, the Dollar is the best fiat out of the bunch. The other way to look at this is through the lens of interest rate differential. If the Fed is going to raise rates sooner than other central banks, money would flow into the greenback. This week and month will be big for the US Dollar. If we close below 90.50 on the DXY, then the deflation criteria for the Dollar becomes challenged. But as of now, the new uptrend is still in play meaning another tick in a deflation criteria box. Last but not least, Gold. This is where things get a bit murky. As a trade, I think there is some upside for Gold that could occur this week. But we want to focus on the longer term. If interest rates drop, this is positive for Gold. But conversely, the prevailing thought is that a stronger dollar is negative for Gold. I still believe money can run into both the Dollar and Gold if there is a confidence crisis (people begin losing trust in government, central banks and fiat currency). Everything macro is pointing to higher Gold prices even with a rising Dollar. Gold is a bit tough to analyze. It looked great with us breaking a flag/pennant pattern, but we have closed below on the retest, so the pattern is now invalid. You can see I have a major flip zone where Gold is currently. This 1775 zone is key. I will be watching this weeks close closely to determine whether Gold continues to move higher. In summary the deflation idea has some technical support. When I see bonds and the US Dollar rising, I automatically think a run into safety. Fear. Perhaps this fear has to do with the pandemic and future variants (the Lambda variant which is deadlier than Delta was recently announced), or maybe big money is pricing in deflation.
TVC:DXY
by Uncharted-FX
2
TLT - Confirmed bottom - More upsideThoughts and ideas are my own view. Now, I've been in a trade on TLT for a little while now. About 2 weeks. It's quite obvious there's a couple things going on here: 1. A reduction of downward momentum that ended in mid-March. 2. A move up followed by a corrective move to the downside which did not make a new low 3. Our indicators indicated we were about to make a move to the upside 4. There's also a visible inverted head and shoulders that broke out on June 8 Mix all these things and there's a squeeze that is expanding to the upside as well. Although we may see a pullback to retest the breakout area, I'm interested in seeing TLT make a move up to approximately $149 in the coming month.
NASDAQ:TLTLong
by bitdoctor