BUND-STREET SMART PLAY BY lINDA RASCHKE2/3YR FCL: Bund Made First close below the Sma, on 2 and 3 Year time frame hence expecting a Bullish retracement
15/16M:RTM: This a Consolidation Pattern, formed my simple or complex consolidation both on 15 and 16 Month Time frames
8M:HOLY GRAIL: This a Retracement formed to the EMA after close off the kelner, See street smart by Linda.
Note that 6 Months is Ranging below the Range of 2-3 Year First close candle, however small time frames are playing off the Bullish trend
1w" Extended Rund
2days, extended Run, expecting Bullish trend
Government bonds
Fed Watch Tool Target Rates on the US 10 YOn this graph, we see the current priced in Interest Rates of the FED Watch Tool in compare to the US 10 Year Treasuries. We can clearly identify by how much the market is frontrunning and at what pace the market believes the Interest Rates will decline.
The Orange Box below is the average Interest Rate of ~2.75% and the expected Mid/Long Term Interest Rate, until something brakes and the next Liquidity Cycle begins.
I personnaly believe that we will see an even faster pace in the future, hence the Earnings showing more uncertainty in the guidance of Corporate Ameria. Additionally the job openings decline, more people are unemployed, the Yen carry trade is not yet unwinded, consumer credit and auto loans are on verge of a credit shock.
Conclusion: hence TLT is pretty much the exact counterpart of the US10Y, I decided to go long TLT with leverage.
German Bund Is On The Rise, So As EURUSD PairWe talked about a bullish turn on German Bund back on June 20th, where we mentioned and highlighted more gains within wave C of an A-B-C rally, which can also recover the EURUSD pair.
As you can see today on August 05, German Bund is extending strongly higher within a five-wave bullish cycle for wave C with space up to 140 area. At the same time EURUSD is also nicely recovering due to a positive correlation and with still bullish Bund, EURUSD can easily see more upside.
US 10Y TREASURY: easing with rate cutsTwo weeks ago markets reacted to surprising jobs data in the US, however, the posted ISM Services PMI on Monday put a dose of relaxation among market participants. Data showed that the US is clearly not in a recession and that, at least, the services sector is doing fine at this moment. All financial markets were traded in a positive manner during the previous week, resetting their sentiment to the previous path. The US Treasuries also re-adjusted during the week, in a move from 3.7% reached on a Monday, till 4.0% reached on Friday. The 10Y benchmark is finishing the week at the level of 3.94%.
Regardless of a positive come-back and re-assessment of the current state of the US economy, the market nervousness might continue in the coming period. It should be considered that the US inflation data and the retail sales for July will be published in a week ahead, where some increased volatility might be possible for one more time. At the current stage, the market is testing the 4.0% level, however, there is some probability for another drop in the week ahead. The level of 3.9%, eventually 3.8% might be tested. The move above 4.0% is unlikely at this moment.
Why are Interest rates falling? Time to buy? We have seen an amazing fall in interest rates.
Bonds have looked to put in a local bottom.
Why are bonds showing signs of accumulation?
Is the bond market pricing in a recession?
I believe the recent decline in yields is due to commodity weakness.
Yields have soften because energy & base metals have become cheaper.
This drives the disinflationary narrative.
I think its to early to tell whether this decline is from demand or global weakness.
Yield ChartThis chart tracks U.S. Treasury yields for 2-year (blue), 10-year (white), and 30-year (orange) bonds, along with the yield spread (green) between the 10-year and 2-year bonds. A positive spread suggests a normal yield curve and economic growth, while a negative spread (inversion) often signals a potential recession.
US 2-Year T-NoteHey Traders
We have US 2-Year T-Note, all my weekly fundamentals are showing a nice drop from from supply zone bounced out and is looking strong to sell down, I will be waiting for a pullback to my sell limit marked off on chart.
When I am lining up a set up I always use the daily TF to place a sell limit or buy limit from supply zone or demand zone.
Please like comment and follow cheers
This chart material is for education purposes only / Demo account should be traded only
Rate Cut? Big Disappointmenting, Unlikely!US10Y Yield Drama: The US 10-Year Yield has been on a rollercoaster—recently dipping, then bouncing back like it’s trying to make up its mind. But let’s be real, being around 4% isn't exactly an invitation to rate cuts.
History’s Not on Your Side:
Sure, the Fed has cut rates before without a crash, but that was when inflation wasn't hanging around like an uninvited guest.
Remember 1998 or 2001? Yeah, those were different times. Now, we've got inflation breathing down our necks.
What’s Really Going On:
This yield isn’t breaking any new ground—bouncing between 4.5% and 3.5% like a broken record.
Everyone’s screaming about an inverted yield curve, but hey, what else is new? We’ve been hearing recession alarms for a while now, and still, no rate-cut savior.
Fed’s Big Non-Move:
The Fed's been singing the same old tune—committed to that elusive 2% inflation target like it’s a sacred mission. They’re not about to abandon ship just because the market’s getting a little choppy.
Meanwhile, Japan hit the reverse button on their rate hike decision. The markets caught their breath, and we’ve already seen some solid “buy the dip” action. Panic averted—for now.
Even with the VIX spiking from all the fear trades, don’t be surprised if it calms down soon. The market’s got a short memory, and we’re likely headed for a higher high once this storm passes.
Cutting rates now would be like pouring gasoline on a fire and hoping for rain. Not happening.
Bottom Line: The US10Y might be teasing you with the idea of a rate cut in September, but don’t hold your breath. The Fed’s playing hard to get, and unless the economy really goes south, they will not lower the interest rates.
Reversion Zones:
Being back to 4% is a very high probability
4.35% will be soon after
Critical Resistance Ahead for US 10-Year Yield: Key LevelsWe've observed an impressive corrective rebound in the US 10-year yield chart. However, we are now approaching a significant resistance zone between 4.06% and 4.09%. This area marks the point where the yield previously broke out of its channel, aligning with the highs seen in March and July of 2023. Additionally, this zone represents the 38.2% retracement of the entire decline from the April 2024 peak to the August low. With this confluence of resistance levels, we will be closely monitoring for any signs of failure.
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Inverted Yield curve re-inversion vs SPYSince 1990, there has been a 4/4 probability of market declines and recession proceeding the re-inversion.
For data not shown on Tradingview, there were 2 outliers in 1980 and 1982 where the market nearly bottomed as it re-inverted (fred.stlouisfed.org/series/T10Y2Y)
However, the last two re-inversions still had the market increase for the proceeding 24 weeks (5-6 months). This is very important information. If this cycle plays out like the last 2, the markets might still crawl higher until Jan 2025.
Yield curve re-inversion vs GoldAs the yield curve re-inverts, it presents an opportunity for safe haven assets like gold to outperform. The only outlier was 1980 and 1982 when gold had already increased 800% in the few years prior due to Fed Volcker's era of runaway inflation.
Evidenced by the inverted yield curve's track record of predicting recessions, the Sahm Rule was also triggered on Friday's unemployment data. Since 1950, the Sahm Rule was able to predict a recession 10/11 times (91% chance). Every time it did predict a recession, it did so within 4 months.
Coincidentally, This time frame fits quite nicely with the 24 weeks of upside proceeding the re-inversion before the start of a bear market
US10Y Government Bond Yield Could Test 3.9% SoonUS10Y Government Bond Yield Could Test 3.9% Soon
The price is showing the completion of a complex pattern that could push the price further.
A very strong resistance area over the previous weeks is found near 4.48% dating back almost 1 month
Also considering overall market expectations, US CPI data on Thursday could help this bearish move.
You may find more details in the chart!
Thank you and Good Luck!
❤️PS: Please support with a like or comment if you find this analysis useful for your trading day❤️
Bearish Yields Can Send USDollar Lower10Y US Yields are falling impulsively within wave C as expected after we noticed sharp leg down into wave A, followed by a corrective rally in wave B. So, there can be now space even down to the former wave 4 area at 3.25%. If we consider a positive correlation with USdollar Index – DXY, then USD can face more weakness. Is DXY trying to break bearish triangle?
Yield CurveThe 2/10 treasury yield spread is quickly flattening and an inversion could happen soon.
All of the previous yield curve inversions are associated with memorable market sell-offs and recessions.
I believe the ripple effect of the ongoing financial and economic sanctions against Russia will end up being the catalyst for the next meltdown.
The market conditions have been favorable to a disaster by many measurements for some time now.
Again, there are many unknown cross-currents beginning to work their way into the global economy. On top of that, the FED is raising interest rates in less than two weeks.
Market topping or not stopping?? Little bit of Macro1. Stocks are fundamentally overvalued.
2. The macro (yield curve and unemployment rate) I'm monitoring is at its peak/low and could be at potential turning point.
3. We need technical analysis to enter this trade and time the short if there is any at all.
These are some extremes I'm looking for that can either enrich you if you're right or make you poor if you lack risk managment skills.
I'm talking Michael Burry 2008 trade if history repeats itself.
Yield Curve touched the 0% - Will it continue up?US10Y-US02Y = Yield Curve.
The Yield Curve has predicted each of the previous market crashes.
The markets are crashing now but is it really the beginning of a bigger market crash?
OR are the markets just very volatile and have more last push up? Maybe yes for the US Markets.
In 2000, the market peak was when the yield curve was still negative (-0.3%).
In 2007, the market peak was when the yield curve was at 0.5%.
Is 2024 more like 2000 or 2007?
Long live "The Widowmaker" trade in JGB'sHistorically, shorting the 10 year JGB was called the widowmaker trade. Yields have trended down for decades in Japan and many a brave soul has tried to call the bottom in yields. Surely the recent move from 1.10% to .72% added a few more souls to the list. RIP
US 10Y TREASURY: September?During the previous week the 10Y US benchmark rates reached the lowest weekly level at 3.78%, and moved down from the support line at 4.2%. There are two major reasons for such a strong drop in Treasury yields. The first was on Wednesday when Fed Chair Powell noted a potential for a rate cut in the future period, which market perceives to be September`s FOMC meeting, and the second reason was surprisingly weak jobs data posted on Friday. The posted non-farm payrolls for July were significantly weaker from market expectations, reaching 114K, from 175K expected by the market. At the same time, the unemployment rate reached 4.3%, again higher from 4.1% estimated by the market. There is currently fear among investors that the US might slip into recession, however, there are also analysts who are noting that weak figures might be due to seasonal effects. Surprisingly weak jobs data led investors to increase odds for more than one rate cut during the course of this year. Also, there is currently 58% chances by market expectations, that the Fed will cut rates by 50 basis points.
After such a strong move in Treasury yields, it could be expected that the market will slowly digest the Friday`s data and adjust positions accordingly. In this sense, there is a probability that the yields would revert a bit to the upside, at least to the level of 3.9%. However, at this point levels around 4.0% are questionable.
Strategic Update: Preparing for the Bund's Takeoff Amidst EuropeI believe it's time for the Bund to take off from here with all this context from the entire European Union. I think the moment we see the Bund again at 141, with a TP zone around 135. The SL zone is again around 1/1 or 1.4, so we leave it room to breathe without putting too much pressure on it. Good luck to everyone, and let's start climbing from here urgently.