TLT LongTLT has pulled back to a very key trend line with additonal supports coming in below. On the hourly chart, we have positive divergence on TLT meaning we should see upside soon in the short term. Given the postures of the markets and how treasuries act as a flight to safety asset, it is reasonable to assume they will go up in price as stocks fall.
For this trade, I advise picking up TMF (x3 leverage) with a stop anywhere from 28.00 to 26.60. I also recommend scaling into the position with 2 or 3 batches comprising your total allocation that you are willing to invest.
Treasurybonds
Rates Down For a Few More Months...Then Up, Up and AwayThis leading diagonal ended as called earlier appears to be making an ABC correction that should end when C = A at 1.75
Then, the longer term upward correction should continue in a third wave, which I think will be a C wave ending this sub-minuet level correction of the larger minute correction of the larger trend.
C should be equal to A as measured from the end of the ongoing sub-minuet ABC correction.
Long 10 year for a couple months, then short 10 year (as rates rise and price falls) for the next year or so...
Good luck!
10 year T Note: New long term bull cycle emerging?TNX has been trading within a 1M Channel Down since 2000 up until January 2018 when it broke the pattern upwards. The mini uptrend found Resistance on the MA200 and has been declining for the past 7 months. We are currently on the most support tests of all, as it has touched the 2000 Channel's Lower High trend line and will test it as a Support for the first time. If that provides a bounce then we may be at the very beginning of a new very long term bull cycle. A Golden Cross formation should come as confirmation.
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S&P 500, Yeild Curve, Recessions, and BitcoinThe chart below shows the yield spread between the 10yr and 3mo and 10yr and 2yr. When the spread is below 0 (colored in red), the yield curve is inverted. This has been an indicator for coming recessions. The red areas on the SPX are the recession periods.
As you can see we saw an inversion last month (march). The next recession is just around the corner and this one is going to be big. With the Fed experimenting with interesting rates and propping the stock market up, and tech stocks, FANG, and the Get Big Fast strategies startups are using, the market is extremely overvalued.
I think with the awareness of bitcoin now and the upcoming halving, money could pour into cryptos when stocks start to fall. The confluence of all this makes me think bitcoin will moon. The timing of the halving with a possible market crash is amazing to me. I feel excited for cryptos. I want to buy gold and bonds, safe places for my money, but the prospect of HUGE gains from the crypto market is to enticing. Either bitcoin goes to zero and I lose all my money (all the money I can afford to lose, not my savings or monthly spending) or I become much richer than my parents. Lol.
Let me know what your take is on all this!
UD1! That's where money went...yield curve explainedCBOT:UD1!
The UD1! is on up trend and explains where all the stock market money has gone the past week...lol. I think I understand yield curve, but missed this one. ; )
#TNX 10 Year Treasury Note Yield What's UP big dump coming maybeWhat's up. Well DAX peaked last year S&P500 and Nikkei225 kept going up. The "Make America Great Again" maybe. Big "Dump-Ala-Trump" coming soon maybe. That's what bonds telling us maybe Will Crypto go into deep freeze and bitcoin go down by another half (50%) Time will tell. No hurry. Note these are Monthly charts
Long US 10year Treasury Bond $ZNWith WTI declining nearly %30 in a short time span and global growth slowing. Investors are long US TBONDS as they are willing to tolerate lower yields from bonds in anticipation of lower inflation and slowing growth.
Bonds rising will have a wide ranging market influence. From yields falling, to equities under performing to Japanese investors seeking domestic risk investment and therefore halting capital exports.
This will mark a turning point in the business cycle for month to come and will challenge active and passive investors and money managers to rethink their portfolios, possibly even rotate into other assets. We are still in the infancy of this turning point , tops and bottoms are ripe for picking.
US10Y - Will the Fed Keep Pushing Rates?I've been watching the 10-year treasury bill yields lately and we can see some very interesting technicals that allow us to draw a few scenarios on what could happen with rates. Above 3.413 we are likely to see a significant rise in yield, while a consolidation here would lead to more "easing" in this and other markets, globally.
Jim Rickard, former general counsel for LTCM, market analyst, and author wrote on his blog "A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable." (due to tradingview policy I cannot pate the link so please manually visit Rickard's post). Based on this observation, there is a real possibility that yield breaks the 3.413 level and triggers a bullish wave in the bond market's yield. Who knows what this will do to equity markets, specifically, the corporate bond market. Junk bonds already look shaky. Will the US' Federal Reserve allow for this scenario? How will this impact China's severely over-indebted economy that has "shorted" the US dollar hard?
Monthly view:
The trend here is clear and we are close to kissing the make it or break it level.
Short Squeeze for the Treasury bearsTypically I have seen that when everyone is on one side of the trade its quite easy for the market to make fools of the participants.
The speculative short position on US treasuries, specifically the 10 year, is massive (and for good reason).
While I remain a longer bear view on these treasuries I think we might end up seeing a short squeeze before we see 3% yields.
The 10 year is showing some signs this could accelerate and hurt alot of bears who need to cover their positions.
10 YEAR TREASURY BY DANIEL BRUNO, CMTThe 10 year treasury is the benchmark used to decide mortgage rates across the U.S. and is the most liquid and widely traded bond in the world
THE 10 YEAR IS A BELLWEATHER. LOOK UP A LONG TERM CHART AND MARVEL AT 15% YIELDS IN 1981 DOWN TO AN AVERAGE 1.6 TO 2.6% 2011 TO PRESENT
LOOK AT INTEREST RATES THE DAY YOU WERE BORN OR ANY OTHER SIGNIFICANT DATE IN YOUR LIFE
LOOK UP WHAT PAUL CRAIG ROBERTS HAS TO SAY ABOUT MANIPULATED BOND MARKETS.
NOTE THAT CHINA HOLDS OVER A TRILLION DOLLARS WORTH OF THESE BONDS...CONSIDER WHAT WOULD HAPPEN IF THEY DUMPED THEM...
OBSERVE THE PIVOTAL ROLE OF THESE BONDS IN THE PETRODOLLAR. SAUDI AND OTHERS EXPORT OIL AND IN RETURN THEY GET THESE BONDS. THESE BONDS ARE CREATED OUT OF NOTHING EXCEPT THE PROMISE TO HONOR THEM.
NOTE THE LONG GREEN CANDLE COINCIDES WITH THE EQUITIES SELL OFF FIRST WEEK OF FEBRUARY 2018
I OVERLAYED THE VIX AS WELL BUT CANT SHOW IT HERE DUE TO CHART LIMITATIONS. THE VIX SPIKED AT THE SAME TIME AS THE BOND RALLY. A FLIGHT TO SAFETY.
DANIEL BRUNO, CHARTERED MARKET TECHNICIAN
CONTACT ME.
You Say Volatility...I say Harmony?!?!Well Well Well I'm back. It seems that we've had further conformation today of both the downward channel I drew as well as the declaration the 10 year Treasury Note Yields and the DJI are in a chaotic Dionysian dance, which seems volatile, in so far as you don't find the beauty in the chaos. Todays trading shows immediate correlations if you look at the minute charts, with yield lows reaching the .77-.823 initiating the DOW bulls and yield highs of .86-.847 initiating the warrior bears to come out and play:
9:32am
Dow-24207
9:47am
T Notes-2.86%
1:39pm -
Dow-23373
T Notes-2.778%
2:25pm-
Dow-24038
T Notes-2.847%
3:11pm-
Dow-23747
T Notes-2.822%
3:51pm
Dow-24369
T Notes-2.85%
4:00pm
Dow-24190
T Notes- 2.855%
Thus, you Apollonian form lovers can keep shouting volatility, while I say embrace the wine god and pour yourself a glass to see order in the chaos.
Moving on, we can see the downtrend channel drawn yesterday has now been tested briefly three times, only to retrace back upwards each time, a clear indicator that its formed some sort of support for the short term movement of the market. Because the market has moved clearly in sync with yield rates, most attempt to be predictive in the short term should take into account what the yield rates on the 10 year are while looking at the candlestick movement, however I've drawn the blue lines as a potential formation of a falling wedge, as the highs are falling more steeply than the lows. If this does come to form and the bulls come out, we should recognize this does not mean the correction is complete, as the market needs to break this downtrend channel before that sentiment can bear (pun intended) any weight. My gut says because the 100 day MA has not been such a strong support, its within reason even if the falling wedge is confirmed to expect a test of the 200 day MA or even the .386 retracement point perhaps not immediately, but over the short to medium term. This expectation I feel is merited by the fact the market has not found much if any bullish legs at all when rates have gotten above 2.85-2.86% point where it currently is now.
*This has been another PSA from your big friendly neophytic DOW Grizzly welcoming you to recognize before closing I am no expert and this is not financial advice..but also daring you to tell me how this is wrong!*