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Rates Breakout - Be Cautious on the ramifications24/Sep/2021 08:22 AM AUTHOR: Brandon Gum -- 10 yr yield is breaking out. This is after they were down 5% on Monday of this week on Evergrande default contagion fears. Fed met this week. They indicated tampering(?) Sentiment trader suggested that lots of money managers are not positioned for a move higher in rates and to be careful of your positioning and know what you own. IWM should outperform (as they do with rising rates - though I dont understand the text book theory behind this. Regional banks should do well in rising rate environment. Growth names that leverage cheap capital will be hit. No comments on other sectors. Im not there in my development yet. ======================
TVC:TNX
by gumbtg
SPX500 vs TLT : Are you expecting a big than ever drop? When...Just a fast idea about correlation between SPX500 (US500) and TLT. I'm more bearish than bullish over Sp500, however I just find out TLT correlation with market. Just read more... I was expected a major drop here in September, but seems not strong enough. My other target is around March / April. Why? Because of Financial results. Can we expect super good gains in a market that drained every stock reserve in 2 year where retails "buyed everything they can find, while at home?" I suppose no. You simply can't sell a 10$ Toys for 100$. If you can't find enough supply, at least you can rise price a little to 15$, maybe 20$. But if before you where able to sell 200.000 pcs x 10$ = 2M$, now you only have 10.000 x 15$ = 150.000$. Freaky! Can we expect a faster recover in production while there are production "bottle necks" everywhere? I suppose no. If I need 200.000 toys, I must find them. But if production limit is 1000 toys for week, and there are no stock reserve and high demand, my order must be shared with others. Price will be rise a little. And if my production machine broke, I must wait for a spare part. And if I produce Spare Part I must wait for chip supplier to produce it. To many "bottle necks" everywhere. Can we expect a fast FED tapering? Maybe not, will only accelerate collapse. So anyone will stay in silence, waiting ... for collapse. BUT WAIT... WHY TLT? IS IT WORTH? Maybe not so worth, but higher TLT prices means less buying interest on Governative Bond. Lower prices means more are buying TLT, and this means "standard stock market credibility" just slowing down , melting off. Reads : sell stock & buy bond / commodities. As always is only a matter of "capital movement" not to HODL till die. Just learn from Pro. Small gains everydays just build more capital than HODL. YES BUT MY BTC STORE VALUE IS GREAT! TO THE MOOOON! Ok, free to believe this. Only ask your self if Pro will really trust on BTC as temporary Store Value (like GOLD is only temporary) or if... they are going to screw every small retail. TO MAKE IT SIMPLE Whatever will happen, Oil prices, Tapering, Yield Interest, BTC to the moon... from a perspective of "simple buy and sell goods" we are already screwed. We need time to recap production, to fill warehouse, to arrange product stock supply reserve. Hope is oil price will no go up any further, hope is in some sensate economical intervention, hope is... in cypto decentralization Fomo anarchic mind set. Ok... We are all screwed. No way, only matter of time. ONE LAST THING... Can you figure the "Black Swan" when will enter in the play field? Who or what will be the Jolly Joker for a complete decline? Share your vision. ----------------- This is not Financial advice. Only my idea. Feel free to share, comment or add missing information. And why not? Will you consider to donate something for some other post like this? Just contact me.
NASDAQ:TLT
by STABLECOINS_GURU
$PAGS: to make you BAGS?Today we are witnessing a sharp turn around in Emerging Markets $EEM after the Jackson Hole meeting. $IWM a strong indicator of risk tolerance has seen a sharp move back up into it's middle pivot. Could the continued low rate environment and strong economy be enough to continue the rush into risk-on assets? Keep a close eye on $EWZ though (Brazil ETF in which PAGS is located) to pin point entries. On the technical side of things, keep an eye on entries in between the two trend lines in which the current candle stick is located between and stops outside of the bottom two trendlines. I'd look to scale in over the next couple of weeks and see how strong the dips in $IWM, $HYG and $EEM are to see how much continuation is possible to the upside. Good luck traders!
NYSE:PAGSLong
by Fox_Technicals
10-year Gilts 1-day classic patternsQ: What has the highest probability of occurring? Since early July there have been 4 tests of 132.000 resistance. There is a combination of 2 classic patterns forming at resistance. The double top, where both tops have been rejected at 132.000, is currently valid. The head and shoulders, the head consisting of the double top, would need to break the neckline ~129.750 to become valid. Both patterns equally project 128.250 as the target. Objectively looking at the entire base beginning around the high volume bar in February it is curve-like. Looking to the weekly timeframe it is quite possible this is the formation of a cup with the handle to follow. So there is some conflict in this area which can lead to a large number of market participants getting it wrong and as a consequence more momentum. It is quite probable that market participants have already shorted the double top breakout. Waiting for the head and shoulders to confirm with an ~129.750 neckline breakout before entry is advantageous. Stop placement above what appears to be a right shoulder at ~130.750 yields a 1.5R target. It would also be beneficial to visualise the 1-week handle as a means of guarding against the 1-day head and shoulder pattern failure.
UShort
by xciiitradingco
1
2 Days, 20 hours from EIP1559Ethereum has been straight running lately, and we have wonderful fundamentals underway with the heavily anticipated upgrade coming very soon. It is worth advising that there is clearly risk of a "sell the rumor, buy the news" event taking place that upon realizing the upgrade we will see those that had accumulated risk off into further strength. While this is a risk, I think it is a low one. It is worth sharing Strategists Russell Napier recently made the potent remark: "This is exactly what happened after World War II. Central banks were impotent during that time. The supply of money was dictated by governments controlling the commercial banking system. I strongly believe that we’re going back to that system. The government can never tell you that, because the whole point of financial repression is to steal money from savers slowly. But this is a fantastic thing for politicians: It isn’t fiscal spending, it isn’t higher taxation, it’s a contingent liability on the government's balance sheet but not an actual liability. It creates politically directed growth, and it creates inflation. For politicians, it’s the magic money tree." (Citation Below) Bond yields are 100% being depressed from central bank intervention which is manipulating yields. Yields are no longer running due to free market forces. This is a hidden penalty on savers, on those living off of fixed income. ETH is a wonderful product as it will enable products to still garner actual market dictated interest rates. This is one of the shocking reasons you are finding such asinine interest rates by providing for example USDC & DAI for example to lenders online offering 7-9% rates. The USD still has high demand, especially from emerging markets and in countries with even worse currency gripes such as Turkey. This is a concept that is hard for many to wrap their heads around: Inflation is taking place The 'Stagflation' cult will eventually be proven right, but their timing is totally (2yrs) premature Despite inflation there is still STRONG DEMAND for the Greenback Yields are being manipulated by central banks, which means to gather yield it is worth going to products which still feature actual free market yields - like ETH or even more broadly speaking DeFi Citation: themarket.ch
COINBASE:ETHUSDLong
by ZenMode
9
BNKS ETF BEARISH topping patternOverall technical elements look toppy on US BNKS. A head and shoulder pattern has emerged and RSI remains sluggish below 50%. However, we are seeing a mid-term wedge/range develop - with some minor RSI divergences emerging. Short-term bounce risk. Suggest to sell any rebounds into the zones closer to highlighted resistances in purple. MACRO => Given the flattening in the US yield curve - it makes fundamental sense for US banks to struggle as their margins will get squeezed.
LSE:BNKSShort
by Foxy_Trader967
The yield curve is supporting a crypto rallyCrypto started rallying after the halving, which coincided with long interest rates rising as the COVID-19 pandemic appeared in March 2020. By injecting massive amount of liquidities, the Fed was also sowing the seed for higher inflation. From mid-April 2021 to mid-July 2021, the rates took a break mid-way thru it's cycle. Lower interest rates means that the inflationnary pressuretook a pause, which manifested itself with the crypto market suffering a mid-cycle correction that we have seen since mid-May 2021. However, the crypto bull market is set to resume for the second half of 2021. Higher upcoming inflation expectations, along with higher interest rates is very bullish for crypto in general and should manifest itself with the pink squiggle I drew. I would expect the yield curve to touch the upper bound in the next couple months while crypto keeps rising in tandem. The yield curve will start inverting when the Fed will proactively raise the short interest rates and this is when the crypto bubble will peak / burst. But while central banks sleep on the switch and keeps inflation unchecked, this is very positive for crypto. Subscribe for more updates!
TVC:US10YLong
by quantmaven
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
🎓 EDU 7 of 20: Use the Power of Intermarket Analysis 🔀Intermarket analysis is an often neglected and overlooked type of analysis among traders. However, it's a powerful tool that can help you anticipate future price movements by following the performance of other, closely-related markets. Intermarket analysis refers to the analysis of other asset classes that can provide valuable and actionable insights into related markets, such as forex. In this part of our Intermarket analysis lesson, we'll be focusing on a specific asset class that has a very close connection with currencies: the sovereign bond market and yields. As you already know from my previous educational posts, currencies tend to follow interest rates. With the fall of the Bretton Woods agreement, currencies became freely-floating and capital started to move to places with the highest yields, which meant higher returns for investors. For example, if Australia has a 3% interest rate and Japan a 1% interest rate, investors could buy AUD to collect a 3% rate and short JPY by paying a 1% rate, leaving them with a net profit of 2%. This is how carry trade work, and the long AUD/JPY was one of the most popular carry trades given the large yield differential between Australia and Japan. That's why you need to follow yield differentials in your trading. The chart above shows the EUR/USD pair, and the 2-year yield differentials between 2-year German bonds and 2-year US bonds. Notice that we're using German bonds (also known as "bunds"), since Germany is the largest European economy. To add yield differentials to your chart, simply hit the "+" (compare) above your chart and type in "DE02Y - US02Y" with a space between the symbols. This also works for other currencies. Here is a list of symbols for the major currencies and their respective bond yields: US02Y, CA02Y, GB02Y, DE02Y, JP02Y, AU02Y, and NZ02Y. The currency should be self-explanatory from the symbols (note, we also the German 2-year yield when analyzing CHF.) Notice how the exchange rate closely followed the differentials in yields. When German yields rose compared to US yields, capital inflows to the euro area increased demand for EUR, which lifted the exchange rate. Similarly, when US yields rose compared to German yields, capital inflows to the US increased demand for USD, and the EUR/USD pair fell (meaning a stronger USD.) The dots you see on the chart are the individual bond yields (DE02Y and US02Y), because I like to have a picture of why the yield differential line is rising or falling (i.e., did the line fall because US yields are higher, or because German yields are lower?) We are using the 2-year yields, because they tend to closely follow the monetary policy stance of the respective central bank. In other words, when the ECB turns hawkish, the DE02Y tends to rise (signaling higher interest rate expectations), which in turn would push the yield differential line higher (and most likely the EUR/USD pair as well.) In the next part of Intermarket Analysis, we'll take a look at how other markets can impact currencies, like metals, commodities, and energy. Please hit the "Like" button and follow, so you won't miss future trade ideas and educational posts!
Education
by MujkanovicFX