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Yieldcurve

SHY-1 to 3 year Treasury ETF forming H&S top Treasury yields have been rising over the past two months, with 2-10 treasury yield spread reaching 29 bps on 12/20/2019, highest level since June 2019. The 1 to 3 year Treasury ETF - SHY broke below the June-November 2019 trendline last week, forming a head-and-shoulder top. Based on the project, the treasury bond ETF prices could target 83.95 area, retracing 50% of the 82.85 (November 2018 low) and 85.12 (August 2019 peak) swing in the next few months. Happy Trading!
NASDAQ:TLTShort
by novvoll12
1
FYI - Will Stock market History Repeat itself? From 10-8-2019 CNBC Article The father of the yield curve indicator says now is the time to prepare for a recession. The yield for the 3-month Treasury has been above the 10-year since May, a condition known as an inverted yield curve that has predicted the past seven recessions. “This is the time where you need to reflect upon your strategy." “It’s way better to have a plan to go by than to find yourself in a situation where the recession hits and you have to improvise.” My opinion: Need to be extra ready to get out of the market when the yield curve crosses above zero. Source: www.cnbc.com
DJ:DJI
by Marius1032
Market Crash Projection using Yield Curve CyclesUsing the 10Y and 2Y US yield curves, I wanted to attempt a potential market crash timing on the Dow Jones Index. I used all available past yield curve data and found the timings of past 3 crossovers that correlated with the market. On average it took 508 days after the first 10Y-2Y crossover for the DJI to reach it's maximum value between the crossover and the bottom of the market crash that followed. Since the most recent crossover occurred on roughly Aug 26, 2019, that would put the estimate for the maximum value of the DJI to be on January 15, 2021. Following that max peak, my goal was to ultimately time the market crash, so I ran a quick logistic regression on the bottoms of each subsequent market crash from each crash's 10Y-2Y crossover. I decided on a log regression as i saw that the time that passed between of each of the past three crashes that were predicted by the yield curves was increasing, and I wanted to maintain that trend in my analysis. I found that the next BOTTOM of the market crash should be roughly 1000 days after the curve crossover, which puts the time frame around May 22, 2022 (also happens to be a Monday #BlackMonday1987). This is by no means thorough and mainly just to put a different perspective on how one could use the yield curves to forecast a financial slowdown using the past as an example. TVC:DJI TVC:US10Y TVC:US02Y
TVC:US10Y
by shack4
1
Yield Curve Inversion and S&P500 Returns & LossesIn the last 50 years, every time US treasury yield curve inverted a recession followed within 3 years. On average the S&P500 gained 19.1% following the inversion and peaked 13 months later. In other words, as far as investors are concerned, the recession began roughly one year later. However, once the market peaks, it drops 37.6% on average. Assuming you can time the market peak perfectly, there is a lot of money to be had. However, the downside risk is a lot greater than the upside opportunity. If you are a long-term “buy-and-hold” investor, with the yield curve having just inverted in August 2019, be prepared to ride a 3- to 5-year roller coaster of highs and lows. At the end, when you step off the ride, you can expect to have roughly the same equity value that you do today.
SP:SPX
by capriole_charles
BITCOIN - Will a Recession Sink the Crypto Market? Part 2Are you strapped in? Elliott Wave Theory Elliott Waves Explained It’s no secret that analysts adhere strongly to Elliott Wave Theory. Far from being a one-stop principle that explains everything happening in crypto trading, it does help us tackle the cyclical nature of markets. Developed by Ralph Elliott way back in the 1930s, Elliott Waves describe the belief that price action plays out over observable patterns that repeat time and time again. In EW Theory, there are two types of waves: 1. Impulse Waves 2. Corrective Waves Impulse waves are moves in the direction of the predominant trend, whereas corrective waves move against the trend. You can easily think of this by imagining BTC having a strong months-long uptrend, followed by a downward correction. The waves in-line with the uptrend are impulse waves, and those moving against it and pushing the price down are corrective ones. It’s wrong to think that impulse waves can only correspond to moves up, however. Impulse waves are just about trends, regardless of whether they are up or down. A correction can occur to the upside, shaking out a downward trend. In that case, a corrective wave up would still be properly considered a correction. Impulse waves move in packs of five, meaning you’ll always get five on-trend impulse waves before being hit by three corrective waves. That gives you a total of eight waves in a given cycle before the next trend takes hold. Although EW Theory describes market action, it’s also an ace piece of psychological work. Traders’ emotions move in cycles of highs and lows. No one stays positive about a trend forever, and neither do they stay negative. The data which informs traders’ decisions and rationale shifts all the time, making it foolish to stick with any position dogmatically. The cyclical nature between positive and negative/optimistic and pessimistic states of mind factors heavily into EW Theory’s own dynamic wave structure. Like the market, Elliott Waves never stand still. However, that doesn’t make them ideally suited to short time frame charts. Because Elliott Waves describe trends, they’re best applied to long time frames – especially if you’re just beginning to interpret the market with them. Will a Recession Sink the Cryptocurrency Market? For the first time since 2007, 10-year bond yields dipped below 2-year bond yields. For the record, every time that happened in the last 50 years, a recession followed. We’re the first ones to say that past performance doesn’t indicate future results, but hey, you’ve got to admit that’s a pretty rockin’ track record. It isn’t just the US standing on the cusp of what seems like an impending recession. Bloomberg had this to say in wrapping up the world’s financial woes: “China reported the weakest growth in industrial output since 2002. Germany’s economy shrank as exports slumped, and euro-area production plunged the most in more than three years as the overall expansion cooled.” So, yeah, not looking too hot out there. What does it mean for the cryptocurrency market? BTC dropped below $10,900 while ETH, XRP, EOS, TRX, XTZ, and several other blue chips fell off the proverbial cliff. For anyone who is keen to think that crypto markets are decoupled from traditional markets – think again. At a very fundamental level, the fortunes of all markets are tied together by whichever is the true hegemonic power. While we love crypto, it would be an outright lie for us to claim that digital assets assume more importance, economically speaking, than traditional global markets. With a total market cap that is less than Amazon’s, the cryptocurrency market pales in comparison to global stock markets, which are valued somewhere north of $60 trillion. Bitcoin is just a drop in the bucket compared to the squidzillions at play in the bigger picture around the world. For those of you who, like us, are living and breathing crypto every day, this may be a hard fact to accept. However, being aware of it will strengthen your position and keep your hand steady. There is nothing financially worse than being caught by surprise. BTC may act as a store of value during a recession Bitcoin was born along with the last global recession back in 2008. Satoshi understood the ill effects of centralized finance and knew that bankers were sending the world economy straight for the dumpster. While the Great Recession hit hard in countries around the world, BTC gained notoriety at first, and then real value right around 2013, when signs of relief from the recession first flickered. The rest of the digital asset market as we know it today emerged during a period of economic expansion and rebuilding in the US, Asia, and many European countries. As such, the cryptocurrency market hasn’t faced a real recession, so predicting how it will react to a global economic downturn is more or less impossible. However, without recession fears at hand for last year and most of this one, altcoins have performed dismally. It’s highly doubtful that a downturn of the kind anticipated will help matters on that score. Bitcoin, on the other hand, may perform better than expected. Safe-haven assets like gold and bonds have rallied in recent days. In 2008, the USD jumped nearly 20% against other currencies. Can Bitcoin make a safe-haven case? Well…“Bitcoin is a remarkably stable and reliable store of value” said no one ever. With all due respect to Anthony Pompliano, it’s possible to be bullish on both Bitcoin and reality. Look, we definitely puff puff pass the crypto hopium. But believing that people everywhere will suddenly flee for safety into an asset class based on bleeding edge tech defies reason. Then again, if Bitcoin has done anything well over the last decade, it’s defy reason. Bitcoin’s drop was understandable. If someone says recession, everyone jumps back. The coming weeks and months will be crucial, though. Do we trend higher as hopes for the global economy sink further? That’s for time to tell. Bakkt announced it would open physically-settled futures trading on September 23. That’s only about a year later than anticipated, but better late than never, right? Now, the skeptics out there are saying (with a smug smile, no doubt) that since Bakkt already delayed several times, nothing is keeping them from doing so again. After all, this isn’t the first (or second) time Bakkt has hit us with a date for release. However, optimists that we are, we think it’s different this time. Bakkt is a Big Deal Bakkt is bringing two massive infrastructural changes to the crypto table. On their own, each would be a big deal, but together – well, that’s what really gets us excited. 1. Bitcoin Warehousing: Institutions want to buy Bitcoin, but they have no idea how to store it. Even if they did, they want someone else to be responsible for it in case something happens. Typical, but understandable. Bakkt is providing warehousing for physically-settled Bitcoin futures for exactly that reason, and it should be the icing on the cake for institutions who have been sitting on the sidelines so far. 2. Physically-settled futures: Back in 2017, everyone got super excited about CBOE futures, only to realize way too late (see: after the dump) that these futures had almost nothing to do with actual BTC. Physically-settled futures change all that. Instead of being settled in cash, these BTC futures actually deal in the asset itself – it needs to be held as part of the futures contract. In this one-two setup, we’ve got a reason and way for institutions to buy BTC, even if for purely speculative purposes, and we’ve got qualified custodianship in the warehouse. The whole thing is such an obvious win for the crypto space. We said that Bakkt dropping a date is different this time. Why is that, you ask? Because before, Bakkt waited for the CFTC to drop in and approve the custodianship angle, but after waiting and waiting, it never materialized. So, Bakkt changed tack and went after the New York State Department of Financial Services for the green light. The September 23 live date is a result of that shift, and New York’s willingness to get the job done. Who Says Altcoins Aren’t Getting Adopted? Altcoins have (understandably) been taking a lot of heat from HODLers. After doing nothing but lose sat value for the better part of 1.5 years, it’s tricky to stay upbeat about them. And yet, there’s a delicate balance to maintain between becoming jaded and going overly optimistic. Zcoin is a perfect example of the benefits of keeping an eye on the right projects. Two days ago, the Zcoin team announced a major partnership with Satang App, a Thai payment app with five million merchants already on board. The result of the partnership is that XZC is now spendable with those millions of merchants by Satang App’s estimated 50 million person userbase. Had you completely checked out of the crypto news cycle, you’d have easily missed this, despite potentially maintaining that no one uses crypto. It’s the little things that count – they add up and make the big picture even sweeter.
BITSTAMP:BTCUSDShort
by ferGOD
9
DXY Likely To Make Push Towards 100.00 As USD Gathers Pace! The above snapshot was taken from the monthly DXY TF charts, showing nearby concrete support and resistance levels. The monthly candle has convincingly closed outside the 98.00 resistance suggesting that the price headed towards the 100.00 mark. The main chart is the weekly TF chart showing a well respected ascending channel. The price would likely gather pace to HIT the 100.00 Mark in the comings weeks based on fundamental market movers! Due to ongoing trade war and slight hope that a deal could be made, the demand for SAFEHAVEN USD has increased. So the question comes, which pair will likely get affected the most due to USD strength? What we observed last week was that the JPY did not gain significantly against the USD as the market were still skeptical that a trade deal was far from being agreed and due to this JPY was resilient against the USD. The CAD also was resilient supported by the strong OIL prices and GOOD fundamental datas. Against the CHF the USD gained ground but in my view trading a SAFEHAVEN currency with another will be difficult as the demand for both intensifies when RISK OFF mood is present! So cutting the chase short, last week the NZD and EUR were the biggest losers against the USD, largely due to their fundamental aspects not being too supportive. The RBNZ is thinking of slashing rates and the new incoming president of the ECB has hinted the rates could go into deeper negative territory due low inflation and growth. So it is advised to take the advantage of EUR & NZD against the USD strength. Personally i am already SHORTING the EURO against The FRANC and i would be looking to take advantage of NZDUSD when the session opens to target 0.61000 level (go to the related link ideas to find out more about NZDUSD) This just represents my outlook on the DXY. Shall a trade opportunity be feasible regarding the NZDUSD i will post it in a new post.
TVC:DXYLong
by FX618Analysis
Why it is still too early for a Market CrashI am short term bearish for the US Markets but I expect a last 5-Wave Impuls Move on the upside in the longer term (look at the SP500 Big Picture Analysis). We are currently seeing an inversion of the US 10 Year Yield and the 2 Year Yield this is a recession signal but remember after this signal we get on average another 22 Months until a bigger correction and another 12% run to the upside in the Markets, this would match well with the EW Counts which also shows me one last Impuls to the upside. We can further see that the inversion level (red line, 0 line) has just been touched there is still plenty of room for the FED to manouver, typically a crash szenario playes out when we have been under the red line (inversion territory) for quite a while and when we start to get out of the inversion territory.
TVC:US10Y
by JonasBenjaminFriedrich
2
The Bond Market - Historical Levels We are currently witnessing levels is the Bond Market that have never been seen before. Again today, the US02Y-US10Y have inverted multiple times. The US01M-US03Y have now also inverted. We currently live in a time where debt is out of control and unfortunately there is no end in sight. History shows, within 6-18 months after a US02Y-US10Y inversion, the US economy falls into a recession. The question now becomes, does history repeat itself once again? We all know that the US Stock Market has been on what many would call a parabolic uptrend. Is the US Stock Market at fair value? Or does it at some point return to fair value? That remains to be unknown at this time as all we can do is allow the future to play out. I've currently been working on a script (Pictured Above), that helps me visualize the Bond Market and Yield Curve in a different way. The moves again today have been very interesting. Best wishes, OpptionsOnly
CME_MINI:ES1!
by UnknownUnicorn5129145
Gold- Surging Despite Being Overbought - NeutralGold has gone up approximately 7% since the beginning of the month however we are holding onto our long position despite the RSI being above 80 indicating it's overbought. This is because the current stock market turmoil and the 2s10s yield curve inverting indicating a recession is imminent could see investors flee further towards safe haven assets such as Gold. Therefore we will hold our long position but would expect a pullback towards $1500 if stocks bounce from current levels and/or US/China relations improve and negotiations are showing signs of progress.
TVC:GOLD
by KQMarkets