Dont Trust USD Rally - TraderflowLooking at climatic reversals in EUR/USD and USD/JPY, if US 2 years roll down then markets caught long USD here into a debt deal
Yields
Short Term Bond Yields Setting Up to Crash along with the DollarThe 3 Month Bill is currently breaking down and backtesting a Rising Wedge after Bearishly Diverging at some extreme highs while the DXY has also broken below a long term trend line and is backtesting the S/R Zone and Moving Averages as Resistance.
I have expectations that both of them will crash majorly in the coming weeks to months.
6 Month Yield HIGHER than when banks collapsed!🚨 🚨 🚨 🚨 🚨 🚨 🚨
6 Month #yield is NOW HIGHER than when #silvergate #bank collapsed!
#interestrates can stay above 5% for extended periods of time, see charts, BUT the end result has NEVER been good for #stocks
1Yr struggles @ 5% but has been higher than 6%
HOWEVER
10Yr TVC:TNX is DIFFERENT! This has been on a long downtrend until 2022!
#bonds
Markets Celebrating the Obvious? Day 2S&P 500 INDEX MODEL TRADING PLANS for THU. 05/18
Our stance last couple of weeks has been: "Our models are indicating an initial bias towards an inflection point coming soon. Barring any unexpected bullish development showing up on the horizon, chances are that this could be unwinding to the downside".
Looks like potentially arriving at some kind of agreement on debt ceiling and avoiding a potential U.S. default is being masqueraded as that "unexpected bullish development" (which almost everyone expected anyway).
Whether this move is going to be the start of the next leg up or to be a classic pump-and-dump remains to be seen. For now, the force appears to be with the bulls, possibly aided by the squeeze of retail, leveraged shorts.
Positional Trading Models: Our positional models are flashing a potential bull trap ahead if this morning's move up proves unsustainable. Models indicate going short at the close if today's close is to be below 4147 (activated at 3:59pm). If opened a short, models indicate instituting a hard stop at 4187.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today.
Aggressive, Intraday Trading Plans for THU. 05/18:
For today, our aggressive intraday models indicate going long on a break above 4187, 4176, 4165, 4155, or 4143 with a 9-point trailing stop, and going short on a break below 4183, 4173, 4151, or 4138 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4161. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:16am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #regionalbanks, #debtceiling
TLT - Intermediate BUY Set-UpHere is my road map for TLT... T-Bonds
This will have significant ramifications across many correlated markets. Think ES, DXY, Gold etc...
I believe we close to embarking on a C wave move up to the opposing upper channel line. This could take on a variety of shapes/slopes. Time will tell.
The bigger move ahead is down... although the move ahead will be worth participating in.
See my published ideas linked below covering TBonds yields and ES/SPX pathways related to this supposition.
Weekly view of TLT here:
US 10 Year Yield On The Cusp of Breaking DownThe 10 Year Yield has been trying to hold this B point level as Support for the longest time but everytime it tries to bounce it gets pushed right back down and in the most recent try we saw it come up to test the moving averages while it Bearishly Diverged and began a Death Cross. If we can get a serious BAMM Breakdown from here it coulkd go down all the way to 1.4% which would likely coincide with a huge decline in the DXY and a rise in the stock market.
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).
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SPY vs TLT : Massive DivergenceThe S&P500 is diverging from the TLT ETF.
We have seen this happen many times over the course of 2021, 2022, 2023.
Each time this happened, stocks ended up playing catch up to the downside.
As yields and bonds typically react first to the incoming macro data, stocks seem to always get the memo last.
Is this time different? Can stocks rally as bonds fall?
2 year yield drifting higher.The 2 year yield saw one of its biggest divergences from the Fed Fund rate during the banking collapse.
Now that the banks have settled the 2 year yield is closing the distance on the Fed Fund rate.
Recapturing the daily 200 MA is bullish for the short term yields.
This move up in yields could be signaling inflation starting to uptick as the economy & labour market remain robust.
20 Year Yield: Bullishthe 20 year yields has also recaptured all of the key daily moving averages.
The yield charts on the weekly and monthly chart look ridiculously strong.
30 year yield: Bullish as everThe long end yields have been climbing recently and many stock market participants are not recognizing this.
The long end yields market may be signaling to us that inflation is going to be entrenched longer than what mainstream experts are calling for.
On a technical basis the 30 year has now recaptured all the key daily moving averages and looks primed to head higher.
Market correlationI'm testing this correlation and looking at the bounce-up for the 10-year yields
To buy indices and sell gold, let's see :)
Let me hear from you..
TLT H4 109/110 To Break On Next Test Targeting 116In this update we review the recent price action in #TLT and identify the next high probability trading opportunity and price objectives to target
Fed v.s Market: the fight may last for a whileAfter the Non-farm payroll event last week, which saw 236,000 jobs added through March, it is clear that the job market is still creating many jobs compared to pre-COVID levels. However, the market has been experiencing some short-squeezing from yields to the dollar.
The reason for this short-squeezing can be attributed to the mispricing between Fed fund futures, which are giving a dovish perspective beyond May, and the Fed's view from its last meeting, which hinted at least one more rate hike.
However, with two holidays in a row right at NFP last week, the short-squeezing action was impaired after the news, and the market quickly came back to price in the CPI tomorrow, as well as retail sales on Friday. The Fed fund futures dropped a few percentage points for a 0.25% chance of a rate hike in May and the dollar also retreated.
While tomorrow's CPI's headline may slow down and be close to the market forecast with a 0.1-0.2% m/m gain due to some correction from the energy price for the period back then, the service and rental costs are back, and they will continue to haunt the core CPI, which may print a 0.4-0.5% m/m gain for last month.
From this perspective, the market is likely to price in the headline instead of the core, as the media would cover that number more, and it may continue to extend the mispricing between the Fed fund rates and the reality that the Fed may continue to have at least one more hike provided a still-hot labor market and stubborn inflation.
Another reason for expanding the mispricing is retail sales on Friday, which may not meet expectations and give the market another reason to beg for Fed to ease. However, it is unlikely that the Fed will reduce that soon. Remember how eagerly people talked about a 0.5% rate hike for the last meeting before the banking crisis? It has only been a few weeks since the latest news on the bank, and things are calm, and the Fed is confident in containing liquidity issues.
So things will be back on track, along with Fed's hiking. The more mismatching there is between the market's expectations and reality, which the Fed may continue to do, the more significant the opportunity when going against the crowd. In short, the yield will gradually come back, provided that the banking crisis is over and there are no more or fewer deposit drains. Then, the other assets follow the yields then.
HD: bearish breakdown or Bullish reversal?HD has broken support but has not completely broken down yet.
HD bulls need to recapture the orange trendline on a weekly close or else the bearish trend will break the 200 Weekly MA.
XLU outperforming...What you need to know. When the XLU outperforms the broad market, you better be taking note as an investor or trader.
What does it mean when Utilities outperform the S&P500?
The better question to ask is why do people buy Utilities?
We have informed our members of this important signal and why its critical to understand this price action.
A hint, most investors buy Utilities for Yield & protection .
US10Y: Rising short term inside its Channel DownThe US10Y is trading inside a Channel Down on the 1D timeframe with the 1D technicals neutral (RSI = 46.172, MACD = -0.046, ADX = 31.478). With the 1D RSI coming off an accumulation that we've seen on the December and January bottoms, we expect the price to rise and approach at least the 0.618 Fibonacci. Our TP = 3.750.
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Trade Idea: AVB looking weakAVB has a death cross that is approaching.
This pattern still favor's a near term bounce but will likely resume its longer term downtrend once buy the dippers are exhausted.
This is a trend that is not your friend.
Capital One....technical Breakdown loomingWith major weakness in the banking sector we are still seeing the contagion play out. Some banks are more at risk than others.
Based off of a blow out in Credit Default Swaps. The bond market is showing there is tremendous risk in this bank.
Just like Credit Suisse CD's blew out befroe the collapse, we are watching COF credit defaults blowout.
#UK 10Y Yield tests it 200-day maYet another example of a market mean reverting to its long term 200-day ma at 3.13 and attempting to stabilise.
We have seen SVB collapse and UBS take over Credit Suisse and during this market turmoil, as at other times, we are likely to see markets mean revert to their long term moving averages - particular attention should be paid to the 200 and 55 week moving averages.
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$TNX is weakening, no longer holder better vs short term Yields$TNX has held better than short term #yields but could this be changing now?
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The 2yr & 1Yr are holding.
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Of course, it's early in the trading day so we'll see tomorrow morning how things go.
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In reference to the post last week on #yield in 2008, we need to keep an eye on TOPS in these #bond yields.
It took 1 year at that time before there was a lower high. IMO will happen MUCH FASTER. Perhaps 6 months tops, no pun intended. :)
#stocks #cryptotrading #rates #interestrates
QQQ/Nasdaq Breakout?Are we about to witness a technical breakout in the QQQ?
Yields have softened, Disocunt window opened, heading into options X...lots of catalyst to rip higher.
However Tech is overbought and into technical resistance.
