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ETHUSD: buy opportunityWhat's the situation on the crypto market? Well..not so long ago, we could see some big moves out from the descending trend lines in such crpytos as ETC, BCH, DASH , BSV..even BTC..which is somehow dictates the direction to the cryptocurrency market (check one of my previous posts of BTC, BCH or ETC). In one word - the market is bullish. Techincally speaking at the moment ETH is out of the descending trendline, so I think it could provide a similar move with a good R:R opportunity for joining bulls, especially for those who are playing it without leverage or stops and invest longer term. ETH annual yield: 0.475% // Follow me to stay updated.)
BINANCE:ETHUSDLong
by GIgor_021
USDJPY and the US 2 YEAR YIELD CORRELATION 'CRACK'Since the YC inversion in August last year (2019), there has been a "crack" in correlation between the US02Y and USDJPY. I expected the YEN to strengthen as the Japanese short the dollar against the YEN to hedge against the rising US Govt bond prices (due to the rate cuts) considering Japan holds a significant amount of US Govt debt. My initial thoughts on this is that the BOJ is focused on keeping the YEN weak to stimulate its export sector which accounts for a significant amount of its trade. At the expense of its debt ballooning ????? I'll be looking into this during the weekend. -Surecapital
by Txnytradesfx
1
Energy the only sector not looking overvalued right nowDespite a big end-of-year rally in both oil and energy stocks, the energy sector remains attractively valued at the end of 2019. In fact, energy is the *only* sector that's attractively valued right now. XLE has a reasonable P/E of 15, a price-to-book ratio of 1.5, and a dividend yield at 3.7%. That's a solid return on capital, handily beating the 2.32% yield on treasuries and the 2.2% yield on the top dividend fund, DGRO. DGRO's P/E is over 18 and its price-to-book is 1.9, meaning that in that fund you pay quite a bit more for a lower yield. The dividend yield on XLE has been improving for a couple years now, and I think the 4% dividend level is psychologically significant enough that we'll find a lot of support at that level. Some individual energy stocks, like ET and OXY, even offer dividends near 10% right now. In an overall extremely overbought market with some ongoing recession risk, this is a relatively safe long-term play that offers good value and solid returns. Did I mention that seasonal cycles favor oil right now? December through July are the traditional bull months for oil, according to the Stock Traders' Almanac. Rising geopolitical tensions with Iran and a cooling trade war with China also favor oil strength for the near future.
AMEX:XLELong
by ChristopherCarrollSmith
5
LQD ShortLQD just bucked a very important trend line. If investors have indeed lost confidence in corporate debt and we see follow through, then I see this as a bearish signal for stocks too. Typically the bond market is known to be correct over the equity market as large institutions with more knowledge than retail traders deal with bonds directly. To see corporate bonds give up such a well defined, key trend line, is to me a signal to be short not only on LQD but on the markets as a whole. Recently, the ramp up in stock prices was on very low volume and I can count 10 unfilled gaps on the SPY ETF. On the graph, there is one instance where we saw negative divergences but the price corrected in time rather than in price. Here, we could definitely see a correction in price as support now becomes resistance with the trend broken. I am not taking a short position on LQD directly but I do recommend taking short positions on equities through investment vehicles such as SQQQ (-3 QQQ). I am also considering on buying UGLD (x3 gold) and TMF (x3 US treasuries) as a flight to safety emerges into those safe haven assets.
AMEX:LQDShort
by BigMouse777
Uncertainties remain! Dovish statement We just received the 25 basis points rate cut. The market had already priced it in. Powell just released the statement. It seems to be a dovish one . He will start his speech at 2:30pm, where the market will try to understand the possibility of a 4th rate cut in December. The CBOE Fed tool has the 4th cut in December at 26%. We should see the yield curve steepen. ----- Economic reports GDP report was positive/neutral. ADP employment change headlines were good, but analyst are not happy reading into the details.
TVC:TNXShort
by dorfmanmaster
When to Buy Stocks - S&P 500 Dividend Yield CurveBefore start reading on; this chart is inverted. More on that later Interpretation According to Mike Maloney, the S&P 500 dividend yield curve is the second best way to measure a stocks value (after the Shiller S&P500 PE Ratio -made a post on this, go check it out). The ratio indicates how much a company pays out in dividends each year relative to its share price. In other words, it measures how much "bang for your buck" you are getting from dividends. In the absence of any capital gains, the dividend yield is effectively the return on investment for a stock. The lower the dividend yield, the less you get for your investment and hence the more overvalued a stock. The historic S&P 500 Dividend Yields were deducted by Robert Shiller and published in his book Irrational Exuberance. Why is the chart inverted? Two reasons 1. This allows you to see, bubbles are up instead of down, and undervalued is down instead of up 2. The higher the yield the more undervalued the stock is, the lower the yield the more overvalued the stock is Areas of S&P 500 Dividend Yield Curve Stocks are undervalued: 1% - 4% Stocks are undervalued: 4% - 5% Stocks are fair value: 4% - 6% Stocks are undervalued: 6% + Keeping an eye on... The alarming thing when looking at this chart is it has only once ever been this high and that was at the beginning of the millennia and this chart goes all the way back to 1872. As of the time of this writing it is at 1.94. The highest it’s ever been is 1.11. This goes to show the size of the bubble we are currently is. Note: This "indicator" is used to find the best time to purchase stocks, not to pick or find the market top/bottom How to “rebalance the dividend yield curve” Going back to Mike Maloney and his analysis...to bring down this dividend yield he sees two ways the market can seek equilibrium. 1. The market goes sideways for a decade while we have raging inflation that will balance this out and then bring dividend yields and PE’s ratios back into line 2. It crashes, the markets go down The currency supply collapses, therefore this has to be a deflationary collapse, this cant be an inflation in what they call an invisible crash. Note that the source of the material here is from 2011 Source: www.youtube.com (58:22)
MShort
by Muncher
EDUCATION: EMULATING YIELD VIA SHORT PUTOver time, my basic approach to my IRA has been to acquire shares at substantial discounts over time and to take advantage of "the three legs": (1) short call premium; (2) dividends; and (3) growth, with the eventual goal to be able to solely or predominantly rely on dividends post-retirement, since "growth" can periodically be elusive and short call premium collection on covered calls can vary widely, depending on movement of the underlying, implied volatility, and one's degree of "aggression."* Typically, this has involved selling puts as an "acquire lower" strategy, followed by share assignment, and then covering. However, as we all know, getting into stock at a particular price results in a less than agile setup. After all -- and regardless of whether you buy stocks outright or are assigned them -- once you're in stock, you're in at the price you bought or were assigned, and there's no amount of magic wand waving that will change the price at which you acquired, even if you shed tears and get buyer's remorse later. In comparison, staying in options as long as possible affords you greater flexibility as to potential acquisition price since you can roll for credit and therefore cost basis reduction before your getting full on into the shares. Relatedly, you can essentially "manipulate" the potential share price at which you're assigned by rolling the short puts down and out if you become unhappy with the strike at which you sold originally. All that having been said, what if I want to emulate dividend yield in the shares while I wait to get assigned at a discount? Well, there's a way to do that -- with short puts. Pictured here is an EEM June 19th '20 36 short put, paying .97 at the mid, with delta/theta metrics of 18/.36. 328 days out in time, it's the expiry nearest 365 days 'til expiry, and the delta'd strike (~18) that will pay something approximating the annualized dividend of $90.** In other words, this isn't the actual trade you'd put on to emulate dividend yield (although absolutely nothing prevents you from doing that), but rather a guide to tell you what delta and/or theta you'd need to sell in shorter duration to emulate the amount of annualized dividend. In this particular case, selling the September 20th 40 short put*** would potentially fit that bill. Paying a .30 credit, it has delta/theta metrics of 17.29/.69 with a theta burn nearly twice that of the longer-dated 36, with the downside being that the strike is obviously much closer to current price than the 18 delta sold out in time. However, the theta metric makes it conceivable that you could collect what amounts to the annual premium of .90 in three to four expiry cycles as compared to 12, assuming that the underlying goes sideways, up, or even down to a certain degree during your credit collection/divvy generation emulation process. Post fill, look to roll at extrinsic approaching worthless from the ~18 delta to an ~18 delta strike in an expiry that will pay a credit, aiming to collect at least .25 with any given roll. If you're not able to get at least .25 on a roll to a similarly delta'd strike without going out an absurd amount of time, consider rolling down and out more incrementally. Naturally, this begs the question of whether and under what circumstances it's worth being in stock versus short puts since you can emulate not only dividends, but also growth with short puts ... . But I'll leave that discussion for another day. * -- By "aggression," I mean what delta you're willing to sell as cover (i.e., 20 versus 30 versus 40 versus at-the-monied or even monied). ** -- The annual yield in EEM isn't great -- 2.08%, so I'm primarily using it as an example due to its excellent liquidity and market tightness in the off hours. *** -- Naturally, this is best done on weakness or in a higher implied volatility environment. EEM's at 7/16 here, so you're consequently not getting a ton of juice out of the 18 delta.
AMEX:EEMEducation
by NaughtyPines
US 10 YR - Lower yields to come in 2019 and beyondLooks like loan officers will be selling 2 and 3 percent fixed mortgages before long. ;) This is an update to my previous idea: If you're a fan of Fibonacci, then you're already well aware of the significance of the 1.618 and .618 lines. If you're not. Here's a super simple version. .618 retrace is the most likely level to see a "bounce" if the overall trend is higher. However, If .618 fails to hold, it's bearish and the next level of support is .786 followed by 1.0 representing a full retrace with new lower lows possible. So, if the 10 year yield is to "bounce" and start heading higher, it basically has to do it here and now... But that's probably not going to happen this time. Globally, central banks of the world are already loosening. China and Europe leading the way. The US economy is clearly showing signs of slowing. Tariffs, combined with record rain have devastated the Midwest farming region. (Expect higher food prices in 2020). A rising dollar at a time where exports are desired more than ever, etc. Ultimately, i expect the 10 yr yield to test the previous low of 1.32 we saw following the passage of Brexit. And we could get there quick. Next 4-6 months or "before 2020" if that's easier.
TVC:US10YShort
by jdharward
Treasury Yield Spread Effects on DOW [Wasabi Analysis]Hello Everyone! I hope you have had a great journey of investment so far! Maybe we are at a critical moment turning around. This indicator shows the Treasury Yield Spread with its default spread of 10 Year minus 3 Month. You can also specify 10 Year minus 2 Year in the settings. The indicator 'Wasabi Tool: Treasury Yield Spread below' can be applied to DOW index weekly or month chart as shown in the provided example. Please see the blue vertical lines showing negative spreads and the red vertical lines indicating positive spreads. It's been observed that the recession starts when the spread crosses under zero and bounces back. Does history repeat itself this time as well? Please subscribe and Like it. Thanks WasabiChart
DJ:DJIShort
by WasabiChart
2