TLT
Inverted Head and Shoulder? Load up on USDThe dollar has been hit very hard lately with all this money printing from the Fed but some argument support the theory that it will soar one last time before the true descent.
The stock market (SPY) is climbing its wall of worries. It will break new highs if not done already by the time you read this. But then when it corrects, bonds are going to soar and cash will be king for a short while.
First Target $27 but could soar well above that. I am loading on UUP September 18th calls. They are are cheap and it offers sufficient time for the plan to work itself out!
Disclaimer: The above is not an investment advice. It is merely an opinion and I share it for your entertainment only. Do your own due diligence and above all, trade safely and stay safe!
All Time HIGH! Things you can do instead of shorting SPYThis craze could go on for a little while. who knows when the reality will catch up with the stock market, In the meantime, you can position yourself for a couple of potential explosive moves.
- Long bonds, they are declining today, could be a good entry price soon? No need for an idea here, just look at the March TLT chart.
- Long USD (see related story)
- Long Gold before the big drop (see related story, to be followed by bullish trend. This one has worked out faster than I thought! I am up 33% on a position I took today)
Disclaimer: The above is not an investment advice. It is merely an opinion and I share it for your entertainment only. Do your own due diligence and above all, trade safely and stay safe!
"All Time High's"This was the first chart that signaled a recession in April of 2020 when the curve first inverted last year in May. This was pure luck, by simply drawing a fractal of previous yield curve inversions from past recessions from May, which was around 360 days from the TA that suggested the market would recess in April of 2020. Obviously covid is a black-swan--unpredictable and un-speculative--however the bond markets continue to get this all correct, 6-12 months in advance.
Keep your tabs on the curve.
4 VS 1 / DJI, SPX, IXIC y RUT Versus TLT (BONDS 20 YRS)
Cuando las acciones suben, los bonos deberían bajar. Es simple porque los bonos son como una inversión poco rentable pero segura en tiempos difíciles. Pero cuando comparamos 4 índices con un ETF para bonos a largo plazo, me viene a la mente que en el futuro, la mayoría de los inversores están apostando al mercado a colapsar, (no ahora). Podemos ver la línea de convergencia (por ahora) entre ETF "TLT" (BONOS 20 AÑOS) y 4 índices importantes de USA.
Obviamente, si vemos la imagen macro de "US 10 Y", descartamos cualquier riesgo en el corto plazo.
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As we know about opposite, when stocks go higher, Bonds should Go Down. It is simple because Bonds are like a low profitable but safe investment in hard times. But when we compare 4 indexes against an ETF for Long period bonds, it comes to my mind that in a future mostly investors are betting market to crash, (not now). We can see the convergence line (for now) between ETF "TLT" (20 YEARS BONDS) and 4 important indexes of USA.
Obviously, if we see the macro Picture of "US 10 Y" we are very solid at this time and we discard any risk.
S&P may sink again sparkingA few things.
1. Over the last 2 years every time S&P has made a higher high and reached RSI down trend it has fallen hard.
2. Bonds are currently signaling stress and deflation despite trillions of QE. For reference see; US2's/10's , TLT.
3. Many eyes are on the DXY breakdown however that is mostly skewed toward EUR, Yen, GBP. The broad trade weighed USD is still very bullish.
4. Net USD positioning is net short. If there is a wobble in stocks safe haven demand for dollar will cause a massive short squeeze in USD.
5. Golds correlation with negative yielding debt confirming much higher bond prices (lower yields).
SPX and TLT, Which Will Correct?1. First Warning Sign:
a)Volatility in the markets increasing.
b)Bonds starting to increase as funds leave the
markets, selling into retail
-Previous resistance on TLT was broke
c)The SPX and TLT typically move opposite to each other
-More on that later
2. Result:
a)Funds pull their money out of the markets leaving retail holding the bag at the top
b)Bonds increase further to new highs and current resistance levels
3. Outcome:
a)Remember is the first part where bonds and the markets usually move opposite to each other? In this section, bonds have remained high. This divergence means one of these charts is wrong and expect a correction accordingly.
b)Gold is past all time highs, Silver is lagging behind gold but closed July strong and bullish. Crypto also closed July bullish
c)Stocks have since had historic rallies. Some are near or past all time highs.
d)Feds have increased their balance sheet substantially and will continue to do so.
4. What's Next?:
a)I see two probably options
b)The first being; Feds will continue to support the economy causing a melt up in which investors will have no choice but to partake in. This could lead to an even bigger crash down the road.
c)The second; The Feds will no longer support the market in which TLT will likely break this resistance and continue to make higher highers and the market will make lower lows.
A Macroeconomic Perspective for Diverging MarketplacesPowell's admission that he's not even thinking about, thinking about, thinking about raising interest rates means there's no possible scenario under which the Fed would raise rates. No matter how low the dollar falls or high gold goes, the Fed will be late again. I suspect the mmimd or lower 80s the the DXY is on the way. This is based on clear-cut macroeconomic data that is currently devaluing the dollar naturally as it should in an economy that continues to inflate, whilst remaining capped in terms of nominal (real) GDP. The unemployment outlook is getting bleaker as new weekly jobless claims were not only above 1 million for the 19th consecutive week, but with yesterday's 1.434m print, they are now higher for the 2nd week in a row. The "recovery" has already ended, and the relapse has already begun.
20:15:02 ( UTC )
Fri Jul 31, 2020
Convergencia en ETF BONOS TLT y SPX / Convergence TLT VS SPXSi, se supone que cuando no se invierte en acciones por alta volatilidad y riesgo, los inversores se refugian en bonos y materias primas, pero se observa que la emisión de bonos que promedia el ETF TLT va en aumento y está cerca de romper resistencia en su cotización, comparada abajo en naranja, también converge el indice SPX buscando romper resistencia en puntos.
Muy rara vez convergen ambas y esto nos dice que hay más liquidez institucional empujando la bolsa con estimulos, mientras que la mano temerosa esta huyendo a intrumentos de renta fija como los bonos.
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Yes, it is assumed that when not investing in stocks due to high volatility and risk, investors take refuge in bonds and raw materials, but it is observed that the issuance of bonds averaged by the ETF TLT is increasing and is close to breaking resistance at Its price, compared below in orange, also converges the SPX index seeking to break resistance at points.
Very rarely do both converge and this tells us that there is more institutional liquidity pushing the stock market with stimulous, while the fearful hand is fleeing to fixed income instruments such as bonds.
TLT / Treasuries are breaking out post FOMCThe chart on the right represents 30 year treasury bonds. The chart on the left is TLT, an ETF that expresses a trade in treasury bonds.
The way to profit most is probably via call options on TLT. I am looking at the 172 strike in August.
The other way is to be long futures. I am long ZB1! futures contract. The negative is the minimum size is $181,000. So for most retail traders, call options on TLT is the best way to play the long here. Owning TLT outright eats a lot of capital for low return.
Here is the long term chart of 30 year treasuries:
Other ways to play this:
5 year treasuries ZF1! (125k contract but much less volatile)
10 year treasuries ZN1! (140k contract with more vol than the 5 year but about 1/4th the vol of the 30 year.
TLT: Looks like the downtrend failed and we get a rally...It looks like bonds will rally until the elections possibly here. I'm long bonds and gold for the time being.
Let's play it safe until we regain clarity. Not sure about equities but the new ATH in #SPX might indeed happen at some point, just that news make it extremely risky to trade equities until the elections risks are out of the way. This is a safe trend to hold on to meanwhile and squeeze a 25% return out of.
Cheers,
Ivan Labrie.
Correlation between SG Bond Yields and TLTIn an interesting comparison, Singapore Bond Yields precede the TLT (blue line) slightly, especially in the recent year. See the elllipses marking out the break points, and SG Bond Yields are leading.
Noted that the SG Bond Yield has been strongly downtrending, ahead of the TLT bullishess (inversely indicative of the US Bond Yields).
I think it signals the undercurrents that something is not as rosy as it appears. The SG bond Yields are telling...