Economic cycle, market cycle, interest rates, trend lines & SPXThis chart provides probable market behavior given current market behavior, interest rates, and other factors such as presidential elections.
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I am expecting a down turn during the next week which would last until late February and another leg up in SPX until the final move down in August 2017.
Trend line colors mark the same conditions on both cycles.
TNX
Bottom in yields is in, 3% by end of 201710-year Treasury Note yield (TNX) is going to climb towards 3% by Q4'17.
Shorter term bearish on the TNX with a longer term bullish viewWe like the short side of the 10 year treasury note for a bearish move to the 1.59 level as a target. Price action could continue higher to 1.73 from current levels, but the 1.59 should be achieved before a longer term bullish move is sustained. So on the longer term scale, we are bullish for price action to make a move for the 2.11 level, which could be reached by year end 2016.
US 10-year yield at major crossroadsThe TNX should be watched very closely next week as the daily chart currently indicates a high risk of seeing another bond rally in the wake of the latest US employment figures (which weren't all that bad). If doubts over a possible Fed rate hike towards the end of the year strengthen in September, the 10-year yield could fall back to it's historical lows, reached earlier this summer. This trade setup currently suggests that so long as the TNX trades sub 1.65%, bond prices are likely to rebound in September. The other scenario would consist in prices breaking support, perhaps in the wake of hawkish comments by FOMC participants, leading to a new period of rising rates similar to that which we saw in 2013 and 2015.
Next Stop 4%TNX appears to have ended its 3 wave decline. If 3 hits the common 1.618 multiple of 1 expect TNX at 4.23 before its next significant correction, which will end above 3.0, the top of wave 1 and then likely equal the ascent of 1 for wave 5...
Long TNX, short bonds...
WAITING FED DECISION (T-NOTE)Today, the main event is likely to be a speech by Fed Chair Yellen before the World Affairs Council of Philadelphia, where she is expected to speak about global conditions. Given that Yellen already expressed her view on rate hikes last week, when she said that a hike “would probably be appropriate” in the coming months, we don’t expect any significant deviation from that remark. She is most likely going to reiterate that rate increases may be warranted in the near-future depending on the quality of incoming data. Following the very soft employment report for May though, we believe that the likelihood for a summer action has declined notably and thus, we will maintain our view that June may be too early for the Committee to act. If you trading eurusd, this analysis may be useful....
The effect NFP released Friday about eurusd:
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DXY Rebound from 93.8 - Expecting Fed to Maintain 10Y Bond FloorI see overwhelming amt of negative press in the media regarding no chance of a Fed rate hike however I feel that most are overlooking the other supporting factors for a potential increase in Dollar Strength in the short term.
I am fundamentally biased to believe that the fed will be maintaining the 1.7% bond floor for reasons concerning economic stability and limitation of capital outflows from the US debt market (in order to sustain fiscal deficit for as long as possible before corporate earnings get too bad).
-BOJ indicates that it does not want to see the Dollar going any lower vs the Yen and I expect Yen to have a significant retrace after the extreme volatility seen in the past 2 months.
-Crude/Brent at a very high historical zone of resistance, expecting retrace along w/ UCAD following suit.
-Cable and Fiber seemingly unstable sentiment for the next few weeks especially with the latest Brexit polls out.
Best of luck!!
TNX weekly to test supportThis TNX weekly chart is very interesting. The bond market is not seeing a rate rise coming any time soon. Certainly it seems not sooner than June. I doubt it even then. See what happens when it gets to support.
SPX v TNX daily divergenceThis chart is most interesting because I expect at some point the SPX will reconnect down to TNX to close that divergence. Lets see
US TreasuriesThis support is significant. If broken, it would probably signal yet another prolonged recession
Major markets monthly - 5/9/2015I originally published this chart back in last November. This is a revisit.
SP500 - goes nowhere so far, no direction (flat, dull)
TNX - ticking up, no question.
DXY - first up, now down.
HGX - broke out and now on support.
XAUUSD: dance around resistance line on the downward slope.
USOIL: bottomed and work on its way up, pullback a little bit recently.
Implications for portfolio?
. keep holding US equities.
. reduce bond holdings.
. keep alert on housing sector.
. gold: bearish but watching for opportunities.
. oil: use pullback and support to add position.
Head and Shoulders on the US 10-year Treasury note ?The TNX is currently testing its 200-DMA, which seems to be at the neckline of an inverse head and shoulders pattern. This is very interesting as market participants are waiting for the non-farm payrolls data on Friday. A daily close above the 200-DMA following the NFPs would suggest a reversal in interest rates for the weeks ahead (which people are already talking about anyways).
MONEY GOES WHEREVER, WITH THE BEST RETURNS A perfect storm waiting to happen with the stock market of major economies like US, Japan, Europe, and most recently China reaching for new highs.
The breakout of China stock market certainly doesn't look healthy at all. Money will find its way where returns are the best, when there's nothing else to invest in the real economy during a slowdown.
Its a game of musical chairs happening every 10 years, be prepared and you'll reap the rewards of the tears. :)
TNX Like TYX, Im not saying that rates are going up, BUT in the short term (next weeks) the yellow line at 1,87 is a nice place for TNX to bounce to 2,15... then we are going down to 1,70 and I think that this one is not going to hold and we are going to make new lows, below 1,40...
But we can make money in the next weeks from here to 2,15
TNX update - 3/22/2015Looks like it is living in the blue triangle now and may get push down even further. As long as the blue resistance holds, long bond should be fine. A breakout will change the game though I do not expect that to happen any time soon given last week's Fed minutes.