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Strongest Recession Signal EverThe yield curve has inverted to the most extreme degree ever, which is a warning that a recession is coming. In this video, I analyze the charts for the AMEX:SPY S&P 500, NASDAQ:NVDA Nvidia, NASDAQ:AAPL Apple, and the yield curve on U.S. Treasurys to see what they're telling us about future price action. In the video, I mention that the bull rally following the Great Recession was primarily due to the Fed's monetary easing. The chart below shows evidence of this. When the value of the assets added to the Fed's balance sheet is compared against the value of the S&P 500, the stock market appears to have essentially moved horizontally. This shows that the primary reason for the stock market's rally is the central bank's extreme expansion of its balance sheet. If you enjoyed this post, I would greatly appreciate it if you leave a boost! If you have any questions or would like to share your thoughts, feel free to leave them in the comments below. Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
TVC:US10Y
by SpyMasterTrades
97
🐹 Caution To All TLT Hamsters - TBT Has More Room to DeliverTBT is a UltraShort 20+ Year Treasury ETF. This Fund seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the Daily performance of the ICE U.S. Treasury 20+ Year Bond Index. 1. Always look first. Never rush into a trade or investment blindly. 2. Wait, and wait again, for the pattern to develop. 3. Be patient and use alerts to get notified when the time is right. 4. Measure trading ranges and adjust your plan for sideways action. 5. Look for bases and consolidations. 6. Zoom out and look for historical levels of support and resistance within those bases or consolidations. 7. Markets can go sideways longer than traders can stay solvent. 8. Adjust your stop loss and take profit targets for the choppy price action. 9. Be prepared for false breakouts and false breakdowns. 10. Choppy markets do not trade like trending markets. Technical picture in AMEX:TBT indicates it has possibility to further upside price action, up to 57 - 60 U.S. dollars per share, as key multi year resistance (5-years simple MA) has been successfully broken at the end of 2022.
AMEX:TBT
by Pandorra
Reverse Triangle (ABCD) set up, D leg of the bullish CypherLooking at the Monthly Chart of the TLT 20yr bond etf. I see a large ABCD Pattern Set up. The Initial Triangle has not completed. Currently there is heavy selling in Bonds (C leg sell off to D leg of the bullish cypher) The Trend Line was breached, and now the sell off is acting like a Magnet to retest 2008 lows. It's worth noting this sell off appears to be A bullish Cypher pattern set up Around D leg. This set up is also tie to the USA real estate market. Based on the 18 year real estate theory, we're only 13 years removed from the 2009 financial market lows. Also based on the 18yr real estate theory, I see a project crash around 2027-2028. Which is likely due to a property tax crisis. At the bottom of the chart you'll see the Stochastic has already bottom, however the AD is still in overbought territory. You want to be buying when both the AD and the stoch are bottom together like in 2008-2009 (see white box).. Dollar cost averaging into the 20yr bond etf is not a bad idea either. With Bond yields currently over 4% and likely to reach 6%-7% before the TLT finally bottoms is a good hedge. I also like the fact in the future, I can write cover calls against this position, which will lower my cost basis even more in the future. I'm not looking to short bonds here, i'm a long term buyer of the dips with a breach of $90... price action could take this below $84, possible $78 but $84 is my target based on the last recession in 2008. Dollar Cost Avg for the win long term for the next 20yrs
NASDAQ:TLTLong
by moneyflow_trader
3
Bitcoin Has Absorbed $26,500 but What's This?Traders, In my last post I stated that BTC must absorb the price of 26,500 for the bulls to come back out and play again. It did. Now, we are running into the 50 day moving avg. which is acting as resistance and should give those of us seeking re-entry into longs a bit of time to make those entry decisions. However, I spotted something sus on the U.S. treasuries chart and it seems that nobody is really talking about this. Both the 10yr and the 2yr experienced a massive spike! What caused this? TBH, it is causing me some hesitation. Could this be pre-indicative of a credit event of some sort? Thoughts, links, data are appreciated in the comments below. Stew
INDEX:BTCUSD
by stewdamus
3 Month Bill Drops To 5.3%In this video, it was difficult to explain everything -- The first thing we look at is the 3-month bill the price of this bond -- Is set to drop as of this writing Later the price will be baked into the market -- In about 4 days from now This is very important to understand -- Because the financial market is backed by Bonds -- Once you understand bonds then you will learn How you can well profit from this type of market psychology -- Watch this video to learn more -- Disclaimer: Do not buy or sell what i tell you to buy or sell do your own research before you trade This is not financial advice -- To learn more about this topic rocket boost this article
TVC:US05YEducation
by lubosi
US 10 Year Treasury vs USD/JPYTLDR: The US 10-Year Treasury Yield and the closely correlated USD/JPY pair can be determinants or signals of market risk. With both breaking their three decade long trends, you have to wonder is a major secular shift upon us. The USD/JPY currency pair has traditionally had a close correlation with U.S. Treasuries. The pair shows how many yen are required to buy one U.S. dollar The pair's exchange rate is one of the most liquid, not to mention one of the most traded, pairs in the world. That's because the yen, just like the U.S. dollar, is used as a reserve currency. When yields on Treasury bonds, notes, and bills rise, the Yen tends to weaken relative to the dollar. When interest rates head higher, Treasury bond prices go down, which lifts the U.S. dollar, strengthening USD/JPY prices The US 10-Year Treasury Yield and the closely correlated USD/JPY pair can be a determinants or signals of market risk. With both breaking their three decade long trends, you have to wonder is a major secular shift upon us.
TVC:US10Y
by PukaCharts
US debt ceiling debacle and US 10-year yieldsUS 10-year bond yields have been trending lower since Oct 2022 after touching high around 4.250%. The rise in the 10-year yield from the past two weeks saw yields stop just short of the blue 61.8% Fibo level of 3.885%. Yields are currently testing the 200-day MA rate of 3.649% and a break below will allow bonds to rally further towards the 50-day MA rate of 5.525% which coincides with the black 61.8% Fibo rate of 3.474%. I expect bond yields to get intimidating soon as the bond rally runs out of steam. Here follows the main fundamental reasons why I believe 10-year bond yields will soon climb above 4.00%. 1. Global financial conditions are easing, and excess liquidity is rising. Short-term rates seem to be peaking not just in the US but globally. Once global rates have peaked, it will allow the market to price in a future cyclical upturn for the US economy. Longer-term yields will capture this sentiment by moving higher as investors will prefer riskier assets to reap the rewards on buoyant liquidity conditions. 2. Inflation is becoming entrenched. Bonds are not a good inflation hedge which will further motivate the sell-off in longer-term treasuries. Heightened inflation expectations are the canary in the coal mine warning that bond holders may soon demand extra yield to lend money. 3. Bond issuance will rise when the debt-ceiling debacle is resolved. Additionally, the debt ceiling has brought scrutiny to the US’s fiscal situation which will dampen investor appetite for US debt (safe haven or not). Furthermore, foreign reserve holders have begun to diversify their holdings, while elevated short-term rates have raised FX hedging costs and kept buyers like Japan away.
TVC:US10Y
by Goose96
1
Harvesting Risk Hedged Treasury YieldEver heard of risk-free rates? Risk free rates are commonly understood to refer to interest rates on 10-year US treasuries. These are considered risk-free as the likelihood of the US government defaulting is considered extremely unlikely. Treasuries pay out a fixed interest and can be redeemed for their face value at maturity. Fixed returns and negligible default risk make treasuries a critical addition to any decent investment portfolio. With inflation on the downtrend and Fed’s hiking cycle nearing its apex, long term treasuries provide a fixed income-generating asset with no reinvestment risk. Little default risk does not mean zero market risk. As highlighted in our previous paper , bond prices are materially exposed to interest rate risk. CME Group’s treasury futures allow investors to hedge that risk. This paper has been split into two parts – the first provides an overview of treasury futures and their nuances while the second walks through the trade setup required to harness risk-hedged yield. TREASURY FUTURES Treasury futures enable investors to express views on a bond’s future price movement. Investors can also hedge against interest rate risk by locking in a coupon rate. CME treasury futures are deliverable with eligible treasury securities which ensures price integrity. QUOTING Treasuries are quoted in fractional notation as a percent of their par value. For instance, a bond quoted at 111’272 suggests that it is trading 11 + 27.2/32 (11.85%) above its par value. This allows standardized quotation of bonds with different coupon rates. Note that notion of quotes in cash markets may be different from futures. AUCTION SCHEDULE Treasuries are auctioned periodically depending on their maturity duration. • Treasury Bills with maturity between 4 to 26 weeks are auctioned every week while T-Bills with maturity of 1-year are auctioned every four weeks. • Treasury Notes with maturity of 2, 3, 5, and 7 years are auctioned every month while T-Notes with maturity of 10-years are auctioned every quarter. • Treasury Bonds are auctioned every quarter. The auctions for each type of security are staggered to reduce their market impact. CONVERSION FACTOR It is possible for a large range of “eligible” treasuries to be available for deliveries against standardised futures contract as new treasuries are regularly auctioned at changing rates. The most recently auctioned securities that are eligible for delivery are called “on the run” securities. To standardize the delivery process for varying securities, a conversion factor unique to each bond is used. The buyer of the futures contract would pay the Principal Invoice Price to the seller. The Principal Invoice Price is the “Clean Price” of the security and is calculated by applying the Conversion Factor to the settlement price. When the Conversion Factor is less than 1, the buyer pays less than the settlement price and when it is higher than 1 the buyer pays more. ACCRUED INTEREST In addition to the adjustment for the quality of the bond being delivered, the buyer must also compensate the seller for any interest the bond would accrue between the last payment and the settlement date. The final cost to deliver the treasury futures contract would be the Clean Price + Accrued Interest. CHEAPEST TO DELIVER Due to the Conversion Factor, which is unique to each bond, some bonds appear to stand out as cheaper alternative for the seller to deliver. So, if a seller has multiple treasury securities, a rational seller will choose to deliver the one that best optimizes the Principal Invoice Price. As a result, futures price most closely tracks the Cheapest-to-Deliver ("CTD”) securities. This also provides an arbitrage opportunity for basis traders. In this case, the basis is the relationship between the cash price of the security and its clean price on the futures market. Small discrepancies in these may be profited upon. Notably, specialized contracts such as CME Ultra 10-year Treasury Note futures with selective eligibility requirements diminish the effects of CTD by reducing the range of deliverable treasuries. HEDGING BOND PRICE RISK WITH TREASURY FUTURES Treasury securities are a crucial and substantial addition to any well diversified portfolio, offering income generation, diversification, and safety. With interest rates elevated and inflation heading lower, coupon rates for long-term US treasuries are yielding positive real returns. Moreover, 10Y yield is hovering at its highest level in 13-years suggesting a strong entry point. Since the coupon rate of the security is fixed and they can be redeemed at face value upon maturity, the present higher yielding treasuries are a great long-term income generating investment. Despite the inverted yield curve, which suggests yields on longer-term securities are lower, a position in long-term bonds protects against reinvestment risk. Reinvestment risk refers to the risk that when the bond matures, rates may be lower. With Fed at the apex of its hiking cycle, rates will likely not go any higher. So, a position in long term T-bond, locked in at the current decade-high rates, offers a lucrative opportunity. The position also benefits in the uncertain scenario of a recession as bond prices rise during recessions. This investment fundamentally represents a long treasury bond position which profits in two ways: (a) Rising bond prices when interest rates decline, and (b) Coupon payments. If the coupon payout is unimportant, fluctuations in the bond price can be profited upon in a margin efficient manner using CME futures. This does not require owning treasuries as the majority of the treasury futures are cash settled with just 5% reaching delivery. In the fixed income case, the bond is held until maturity which leads to opportunity costs from bond price fluctuations. CME futures can be used to harvest a fixed yield from treasuries and remain agnostic to rate changes, by hedging the long treasury position with a short treasury futures position. This position is directionally neutral as losses on one of the legs are offset by profits on the other. The payoff can be improved by entering the short leg after bond prices are higher. To hedge treasury exposure using CME futures the Basis Point Value (BPV) needs to be calculated. BPV, also known as DV01, measures the dollar value of a one basis point (0.01%) change in bond yield. BPV depends upon the bond’s yield to maturity, coupon rate, credit rating and face value. Notably, BPV for longer maturity bonds is higher as their future cashflows are affected more by changes in yield. Another commonly used term is modified duration which determines the changes in a bond’s duration or price basis of a 1% change in yield. Importantly, the modified duration of the bond is lower than 100 BPV’s since the bond price relationship to yield is non-linear. BPV can be calculated by averaging the absolute change in the bond’s yield-to-maturity, its value when held until maturity, from a 0.01% increase and decrease in yield. Where there are multiple bonds in a portfolio, the BPV for a unit exposure will have to be multiplied by the number of units. On the futures side, BPV can be calculated as the BPV of the cheapest to deliver security for that contract divided by its conversion factor. By matching the BPV’s on both legs, the hedge ratio can be calculated. This represents the number of contracts needed to entirely hedge the cash position. SUMMARY OVERVIEW OF CME TREASURY FUTURES CME suite of treasury futures allow investors to gain exposure to treasury securities across a range of expiries in a deeply liquid market. Each futures contract provides exposure to face value of USD 100,000. The 2-Year, 5-Year, and 10-Year contract are particularly liquid. Micro Treasury Futures are more intuitive as they are quoted in yields and are cash settled. Each basis point change in yield represents a USD 10 change in notional value. These products reference yields of on-the-run treasuries and settled daily to BrokerTec US Treasury benchmarks ensuring price integrity and consistency. Micro Treasury Futures are available for 2Y, 5Y, 10Y, and 30Y maturities enabling traders to take positions across the yield curve with low margin requirements. TRADE SETUP TO HARVEST RISK HEDGED TREASURY YIELDS A long position in the on-the-run 10Y treasury notes and a short position in CME Ultra 10Y futures allows investors to benefit from the treasury bond’s high coupon payment while remaining hedged against interest rate risk. Hedge ratios can be calculated using analytical information from CME’s Treasury Analytics Tool to obtain the BPV of each of the legs: The on-the-run treasury pays a coupon rate of 3.375% pa. and its last quoted cash price was USD 98.04. It has a DV01 of USD 76.8. Since, each contract of CME Treasury Futures represents face value of USD 100,000, the long-treasury position would need to be in multiples of USD 100,000. For a face value of USD 500,000 (USD 100,000 x 5) this represents a notional value of USD 490,000 (Face Value x Cash Price) . The long-treasury position's DV01 = USD 76.8 x 5 = USD 385. The cheapest-to-deliver security has a DV01 of USD 92.2 and a conversion factor of 0.8244. The futures leg thus has a BPV = Cash DV01/Conversion Factor = USD 92.2/0.8244 = USD 111.8. The hedge ratio = BPV of Long Treasury/BPV of Short Futures = USD 385/USD 111 = ~4 (3.4) So, four (4) lots of futures would be required to hedge the cash position which would require a margin of USD 2,800 x 4 = USD 11,200. Though the notional on the two legs does not match, the position is hedged against interest rate risk and pays out 3.375% per annum in coupon payments. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
TVC:US10YEducation
by mintdotfinance
1
Unveiling the Secret Relationship: US 10-Year Treasury and GoldAs you may already know, the US 10-Year Treasury is a government bond that benchmarks long-term interest rates. Investors often turn to this instrument as a safe haven during times of economic uncertainty or market volatility. In contrast, gold has long been considered a store of value and a hedge against inflation. It is highly sought after in times of economic distress, making it a popular choice for investors looking to diversify their portfolios. What's truly captivating is the observation that the US 10-Year Treasury and the price of gold tend to move in opposite directions. When the yield on the 10-Year Treasury rises, indicating increased investor confidence and potentially higher interest rates, the price of gold often experiences a decline. Conversely, gold prices tend to increase when the yield on the 10-Year Treasury falls, signaling economic uncertainty and the potential for lower interest rates. This inverse relationship can be attributed to various factors. Firstly, rising interest rates make fixed-income investments, such as bonds, more attractive, diverting funds from non-yielding assets like gold. Secondly, as the US dollar strengthens with higher interest rates, gold, priced in dollars, becomes relatively more expensive for foreign buyers. Lastly, lower interest rates often lead to increased inflation expectations, making gold an appealing investment due to its historical ability to preserve purchasing power. You might wonder how this knowledge can practically apply to your trading strategies. Well, my friend, here comes the call to action: I encourage you to closely monitor the direction of the US 10-Year Treasury to predict potential movements in the price of gold. By staying informed about the yield fluctuations of the 10-Year Treasury, you can gain valuable insights into the overall market sentiment and potentially anticipate shifts in gold prices. This knowledge can help you make more informed trading decisions and position yourself advantageously in the market. Remember that while the inverse relationship between the US 10-Year Treasury and gold has proven to be a reliable indicator, conducting a thorough analysis and considering other factors that may influence gold's price is essential. Market conditions are ever-changing, and no single hand can guarantee success. Therefore, combining this knowledge with other technical and fundamental analysis tools is crucial to maximize your trading potential. In conclusion, understanding the inverse relationship between the US 10-Year Treasury and gold can be valuable to your trading arsenal. By closely monitoring the direction of the 10-Year Treasury, you can gain insights into potential movements in gold prices, allowing you to make more informed trading decisions.
FXOPEN:XAUUSDLong
by bryandowningqln
TMF - Long Term Leveraged Treasury ETFOn this 4H Chart TMF has rallied in the past week about 9% as the reports of the impetus of inflation has diminished. On the zero-lag MACD, the lines are staying above the histogram which has not converted from negative to positive. The dual time frame RSI showing low 1 hour TF in blue and daily TF in black has the lower crossing over the higher both at the lows on July 10th and now both over 50 with the low 1 hour TF still above the higher daily TF. This confirms bullish momentum. Price is on a VWAP breakout ascending from the support of the 2nd negative mean anchored VWAP to above the mean anchored VWAP with a retest as well. Price is now above the POC line of the volume profile demonstrative the dominance of buying pressure over selling pressure. On the ADX indicator, a positive trend is rising while down trend is dropping proportionately with the intersection and cross occurring on July 12. Positive ADX is staying above 20. Overall I see this as an excellent setup for a long swing trade targeting 8.05 in the area of the values of the highs of June. A higher target would be about 8.3 where there were some recent pivots If the fed does an about-face and pauses rate hikes, a significant rally could ensue.
AMEX:TMFLong
by AwesomeAvani
3
TBT Treasuries Bear Leveraged ETFTBT is going to take another swing now that interest rates are going up. Fundamentally, Treasuries and other bonds will go down on their real face value because their yield is lower than the new going rate. Inverse EFTs like TBT will go up when Treasuries go down. On the w Chart chart, price is sitting above the POC line of the volume profile where there is support and high volatility. Above the line shows buyers in control ready to move price higher. The Awesome Oscillator flipped green today after the fed news showing that selling momentum has been replaced by buying momentum ( capitulation at the bottom). The volume indicator shows a clear uptick in buying volume. TBT offers options to further leverage this trade. I will take a call options position of several contracts for the 5/12 expiration at a strike about 5% below the current price. I expect 100% return on risk by next Monday and more after that.
AMEX:TBTLong
by AwesomeAvani
Bond Yield Inversion vs. SPXThis is nothing new, really. People who have been in markets long enough know that when short term bond yields (3 month and 2 year, for example) come up to meet and invert to a higher yield than longer term bonds (like the 10 year, 30 year etc) that it often precedes a large market sell off as well as a recession that affects most everyone, not just stock prices. On this graph, I maybe got a little carried away. I have the 1 month, 3 month, 1 year, 2 year, 10 year and 30 year as well as the actual Fed Funds rate with SPX in the background. This goes back to the mid 1990s, you can see the dotcom boom, you see the yields invert, SPX tops and then takes near 3 years to finally find bottom before reversing course. Unfortunately for long only stock holders, the treasury yields started to climb with stocks as well until they inverted in 2007 once more. Stocks started to come down, and, well, then 2008 happened... You can see that in general, the fed funds and the shorter term yields find a plateau at their top, tend to stay there for awhile (sometimes for a whole year), then as they start to come back down, the stock market tends to be near its highs, and then the stock market starts to come down. Big money tends to see higher treasury yields as a safer haven for their money than stocks at this point. If you have the ability to hold the treasury to expiration, you're guaranteed to get 100% of the money back plus whatever the yield % was at time of purchase as interest paid to you by the government. Furthermore, there is an inverse relationship between bond yield percentage going up, and the value of bonds on the open market. As yields go up, the value of bonds goes down. Vice versa, as yields start to retract, bond values go up. So, there is high incentive to start buying a lot of bonds as the rates plateau near the top. Maybe some of these large hedges start to sell some equities as a hedge and buy more bonds as we get to that point. Rebalance their portfolio to be more bond-heavy. Higher short term yields, higher fed funds rate also generally mean that the cost to borrow money for anyone is higher. Higher interest rates means more money out of the pocket of anyone borrowing to pay interest. Bonds themselves are just government debt. The stock market is generally forward looking, so it's often making moves in response to moves in the bond market before main street really starts to feel the effects of the tightening in a meaningful sense. As time has gone on, it seems the market is reacting earlier and earlier to rate hike cycles. Take 2018 for example, the yields didn't really invert until they all were already on their way back down. 2018 had volmeggedon to deal with to start the year, then came back, set a new high, then had a very rough second half of the year as bond yields plateaued. But, as the market saw that this small rate hike cycle didn't do any meaningful harm to the economy and started retracting, stocks took off again: Then COVID happened, yields plummet, cost to borrow was as cheap as it ever has been, the government pumped money everywhere to try and prevent a complete collapse of everything, stocks were off to the races harder than ever before after finding bottom just a few weeks into the pandemic. But, mentioning the market kind-of getting ahead of itself again, we had all of 2022, as it became apparent that inflation was now raging and bigger rate hikes than we've seen since the Great Financial Crisis would be necessary, the stock market sold off despite the economy still showing very solid recovery out of the pandemic. But now, treasury yields are still climbing, but so are stocks. Treasuries hit a little hiccup in March as a couple regional banks were found to be overlevered in treasuries that had too low of a yield, and as more people began withdrawing money and those banks needed liquidity, they had to sell those treasuries at a loss. If they didn't have to come up with that liquidity and were able to allow those treasuries to mature, they make that small percent of interest for holding them. But because they were forced to sell them as treasury values were at a low because they had inadequate liquidity to cover deposits being withdrawn. But, now maybe surprisingly, despite some of the troubles and the market sell off for most of 2022, we're now not all that far off of CBOE:SPX 's highs from the end of 2021, start of 2022. But, we still don't know what the full effect of the current high interest rates are going to be. It's possible the old mechanism where when we finally reach the top for interest rates, right as we get the precipice of rates starting to fall, equities top out and start to sell off shortly thereafter again. For how big and how long? Who knows. Despite the recent 'skip' from the federal reserve, opting to not hike at the June meeting, the 3 month yield, which typically is what most closely matches/leads what the fed is going to hike to, has in recent days made it look increasingly likely that we see at least a quarter point hike for July. The market probably won't like that news, maybe we get a few red days, but if economy data coming in still looks solid and inflation is showing a slow, steady reduction, it may not be long before the market decides to go back up again. We might even go past the 2021/early 2022 highs this year. But, eventually, we'll find the top for yields, and I have a feeling a bigger correction for stocks will loom at that point. For right now, seems like a bad idea to go against the bulls. But, keep an eye out for when we finally reach the top in treasury yields, look in particular for the 3 month, fed funds and the 2 year to go sideways. Once all 3 start to go down, pay closer attention to economic data coming in. Also take a look at www.tradingview.com for evidence of lower highs off the lowest point for the current cycle. You see the combination of the two, we may be in for a big correction. Again.
TVC:US03MY
by dieseldub
US10Y Approaching the top of the Channel Down. Sell opportunity.The U.S. Government Bonds 10YR Yield (US10Y) is approaching the top of the (blue) Channel Down pattern, which was our bullish target on our last trade ten days ago (see chart below): Despite not having hit it yet, we decide to close this long trade as we see more value in starting a sell-near-highs approach now. There is also a diverging Channel Down (dotted lines) involved and the maximum technical top that the price can make without breaking any pattern is the top of the Rectangle (4.090% Resistance). That will be our 2nd and final sell entry. Pay attention to the 1D RSI also, which is approaching the overbought barrier (70.00) just like on February 21. Our bearish strategy targets the May 04 Low at 3.300%. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10YShort
by TradingShot
11
TLT / TBT Ratio - a bonds long and short oscillatorOn the daily chart- I have plotted the TLT (Long Bond Leveraged) ETF vs the TBT (Short Inverse) as a ratio. The ratio is running on a cycle between high and low. On the chart for reference is a Hull Moving Average of 20 days. A more frequency cyling could be achieved with a paid Tradingview subscription and a charting time frame of 2 or 4 hours. For the trading idea, when the hull moving average is upgoing and the price is above it, the TLT can be bought while when the moving average of the ratio is decreasing and price is under it, the TBT can be bought. At a high pivot point, all TLT is liquidated and a TBT trade is taken . For a low pivot point, TBT positions are closed and TLT long trades are taken. The best trades are at the pivot points and when a doulble top or bottom are put onto the chart.
NASDAQ:TLT
by AwesomeAvani
Navigating The American Debt Ceiling DramaSome people create their own storms. And then get upset when it starts to rain. US Debt Ceiling drama is akin to a soap opera that never ends. Debt ceiling issue is not new. Why bother now? Political polarisation in the US has got to unprecedented levels. The showmanship could tip over into a political nightmare. It could send economic shockwaves with impact deeply felt both within US and well beyond its shores. Many politicians seemingly are so pulled away from reality that their fantasies aren’t working. Wishing away a problem out of its existence is not a solution. The Debt Ceiling is here. US defaulting on its debt is highly unlikely. Scarily though, the probability of that occurrence is non-zero. This paper looks at recent financial history surrounding prior debt ceiling episodes. Crucially, it delves into investor behaviour and their corresponding investment decisions across various asset classes. When uncertainty looms large, straddles and spreads arguably deliver optimal hedging and investment outcomes. A SHORT HISTORY OF DEBT CEILING. WHAT IS IT? HAS IT BEEN BREACHED BEFORE? The US debt ceiling is a maximum cap set by the Congress on the debt level that can be issued by the US Treasury to fund US Government spending. The ceiling was first introduced in 1917 to give US Treasury more flexibility to borrow money to fund first world war. When the US government spends more money than it brings in through taxes and revenues, the US Treasury issues bonds to make up the deficit. The net treasury bond issuance is the US national debt. Last year, the US Government spent USD 6.27 trillion while only collecting USD 4.9 trillion in revenue. This resulted in a deficit of “only” USD 1.38 trillion which had to be financed through US treasury bond issuance. This deficit was not an exception. In fact, that’s the norm. The US Government can afford to and has been a profligate borrower. It has run a deficit each year since 2001. In fact, it has had budget surplus ONLY five (5) times in the last fifty (50) years. If that wasn’t enough, the deficit ballooned drastically from under USD 1 trillion in 2019 to more than USD 3.1 trillion in 2020 and USD 2.7 trillion in 2021 thanks to massive pandemic stimulus programs and tax deferrals. This pushed the total US national debt to a staggering USD 31.46 trillion, higher than the debt ceiling of USD 31.4 trillion. The limit was breached! So, what happened when the ceiling was broken? Not that much actually. When the ceiling is broken into, the US Congress must pass legislation to raise or suspend the ceiling. Congress has raised the ceiling not once but 78 times since 1970. The decision is usually cross-partisan as the ceiling has been raised under both Republicans and Democrats. It was last raised in 2021 by USD 2.5 trillion to its current level. Where consensus over raising the ceiling cannot be reached, Congress can also choose to suspend the ceiling as a temporary measure. This was last done from 2019 to 2021. Since January, the Treasury has had to rely on the Treasury General Account and extraordinary measures to keep the country functioning. Cash balance at the Treasury remains precariously low. Its operating balance stood close to nearly USD 1 trillion last April but now hovers around USD 200 billion. Such reckless borrowing! Yet US continues to remain profligate. How? Global investors have confidence in the US Government's ability to service its debt. Despite the increasing debt, the US Government continues to pay investors interest on its bonds without a miss. Strong economic growth and its role as a global economic powerhouse assuages investor concerns over a potential default. Additionally, where Treasury does not have adequate operating cash flow, it leans on a credit line from the Federal Reserve (“Fed”). The dollar’s strength and reserve status contribute to the US Government’s creditworthiness and vice-versa. The Fed is also the largest holder of US government debt. It holds USD 6.1 trillion as of September 2022 (20% of the overall debt). The share of government debt held by the Fed surged to current levels from just above 10% during the pandemic due to massive purchases of treasury bills by the Fed as an emergency stimulus measure. GROWING US DEBT IS BECOMING A SOURCE OF CONCERN US debt has ballooned during the pandemic. It is deeply concerning for multiple reasons. Key among them is the risk of default. Although debt has increased significantly, GDP growth during this period has been tepid due to pandemic restrictions stifling economic activity. As such the ratio of national debt to GDP, a measure of the US’s ability to pay back its loan has also skyrocketed. This increases the risk that the US Government may fail to service its debt. A US Government default would lead to surging yields on treasury bonds and crashing stock prices. It would also call into question its creditworthiness limiting future borrowing potential. A default will also have far-reaching economic consequences threatening dollar hegemony which is already being challenged on multiple fronts. Another concern is the rising cost of servicing the debt. Servicing the debt is the single largest government expense. Interest payments on debt this year are expected to reach USD 357.1 billion or 6.8% of all government expenditure. Additionally, with the Fed having raised interest rates with no stated intention of pivoting in 2023, the interest rate on US public debt, which is currently at historical lows, will also rise. DEBT CEILING BREACH AGAIN. SO WHAT? LOOKING BACK IN TIME FOR ANSWERS. There has been more than one occasion when political disagreements resulted in Congress delaying the raising of the debt limit. In 2011, political disagreements pushed the government to the brink of default. The ceiling was raised just two (2) days before the estimated default deadline (the “X-date”). Despite the raise, S&P lowered its credit rating for the United States from AAA to AA+ reflecting the effects that political disagreements were having on the country’s creditworthiness. This played out again in 2013 due to same political disagreements. Thankfully, for investors, the effects of the 2013 crisis on financial markets were not as severe. Flash back. Equity markets initially dropped after the debt ceiling was reached and investors worried that the disagreements would not be resolved in time. In July 2011, markets started to recover as both parties started to work on deficit reduction proposals. Then on July 25th, just eight (8) days before the borrowing authority of the US would be exhausted, Credit Default Swaps on US debt spiked and the CDS curve inverted as participants feared that a deal would not be reached in time. This led equities sharply lower. On August 2nd, a bill raising the ceiling was rushed through both the House and the Senate. Following this S&P lowered US credit rating from AAA to AA+ citing uncontrolled debt growth. Equity prices continued to drop even after the passage of the bill. Commodities showed similar price behaviour heading into the passage of the bill. However, unlike stocks, gold and silver prices rallied after August 2nd. The USD weakened against other currencies before the passing of the bill but recovered after August 2nd. Treasury yields trended lower but spiked during key events during this period. Short-term treasury yields remained highly volatile. Following crisis resolution, yields plunged sharply. US DEBT CEILING CRISIS AGAIN. WHAT NOW IN 2023? The US reached its debt ceiling again in January 2023 and yet another debt crisis. 2013 is repeating itself again as lawmakers disagree over whether to raise the ceiling further or bring the budget under control. The Congressional Budget Office (CBO), a non-partisan organization, has estimated that the US could be at a risk of default as early as June 1st. Republicans disagree with the Biden administration. They seek budget cuts to reduce annual deficits while Democrats want the ceiling to be raised without any conditions tied to it. This crisis is exacerbated by rising political polarisation in the US. Not just metamorphically, the Republicans and Democrats are at each other’s throat. A study by the Carnegie Endowment for International Peace found that no established democracy in the recent past has been as polarised as the US is today. This raises the risk that Congress gets into a stalemate. Moreover, the house is only in session for 12 days in May. After the law is passed in Congress it must also pass through the Senate and the President. The availability of all three overlap on just seven (7) days, the last of which is the 17th of May. This means that lawmakers have just 3 days (from May 12th) to reconcile their differences before the US is put at risk of default. POSITIONING INVESTMENT PORTFOLIOS IN DEBT CRISIS WITH X-DATE IN SIGHT What’s X-date? It refers to the date on which the US Government would have exhausted all its options except debt default. The X-date could arrive as early as June 1st. There is a small chance that it could arrive in late July or early August. The US Government collects tax receipts in mid-June. If the US Treasury can stretch until then it will have enough cash to last another six weeks before knocking against the debt ceiling again. The current crisis has been brewing. Equity markets remain sanguine. But near-term treasury yields have started panicking. Short term yields have spiked. The difference in yield on Treasury Bills that mature before the likely X-date (23/May) & after it (13/June) has shot up. Muted equity markets create compelling opportunity for short sellers. In the same vein, it also presents buying opportunities when debt ceiling is eventually lifted. When up or down is near impossible to predict, an astutely crafted straddle or time spread can save the day. DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Editors' picks
TVC:US01MY
by mintdotfinance
27
US10Y: Last dip before a medium term reboundThe US10Y is trading inside a Channel Down ever since its market peak on October 21st. The 1D technicals are neutral (RSI = 54.601, MACD = 0.300, ADX = 17.030) giving a mixed tone to the price action but based on the December-January Lows we can see the the Channel Down has one last dip to make before it bottoms and rebounds on the medium term. We will wait for that pullback around 3.250 and buy targeting the 0.618 Fibonacci (TP = 3.750). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:US10Y
by InvestingScope
1
TMF 20 year 3x Leveraged Treasuries ETFTMF completed an uptrend from 3/28 to 4/6 and then a retracement of it. It is now positioned above the 0.5 Fibonacci level also the VWAP of the anchored multisession VWAP indicator in the fair value ( and high volatility ) area also near to and importantly above the POC line of the intermediate-term volume profile. This high confluence yields strong support for the continuation of an uptrend targetting $10.00 the pivot high this past February with a stop loss of $8.92. For those looking for a high reward entree with the requistite risk appetite a call option with a strike of $9.00 or $ 9.50 expiring 5/19 or 6/16 might be what is on the menu.
AMEX:TMFLong
by AwesomeAvani
Recap of my trade for today on ZB1!Good afternoon and good evening dear traders! At the morning I shared a post where I said to sell ZB1!, it's too late but you still have made some profits if you got in early. For my clients and I it was a good day in ZB1! and NATURAL GAS, we could make some good profits on the 4% drop of the NATURAL GAS and on the 1% of the ZB1!, I didn't share the NATURAL GAS one since I already posted the ZB1! one and I can't give the trades I give privately. See you tomorrow on another forerecast! If you got any question don't hesitate to ask!
CBOT:ZB1!Short
by YassineAnalysis
SELL ZB1!Good morning dear traders! I'm sharing with you one of my trades for today as I usually do. I managed to share with you the TREASURY BONDS one, as you can see on the chart the price broke the channel for the fist time as a fake breakout, the 2nd time it did the same thing but it managed to come back down ad give us the confirmation to sell, my customers and I got in an hour ago, now since the market is on the move I shared it with you since I can't share them to pu lic at the same time I give it to my customers whom pay for signals. TP and SL set them at your own risk If you got any questions don't hesitate to ask I'll answer with pleasure
CBOT:ZB1!Short
by YassineAnalysis
Recap of my trade for todayGood afternoon and good evening traders! I'm sharing with you a recap of my trade for today, actually we caught the 1st up trend after breaking the support line with a quite high volume, then after having the highest volume of the day on the candle I put the 2nd arrow at we added another position to finish the trade on the market with 2 contracts and a respectful profit after seeing a squeeze of buyers and closed at the end of the red candle I put an arrow on. After that the price broke the support line of the channel I shared the trade with you too early to make some profit of it. For more questions don't hesitate to ask and I'll be answering with pleasure. PS: The autocorrect changed the FUTURE to FEATURE on the post I posted this morning
CBOT:ZB1!
by YassineAnalysis