Recession RisksWhen the 2 year yields reconnect with its declining moving average, markets get really vulnerable.
Not always, but often.
But I guess nobody cares anymore about recessions...
Government bonds
US10Y Yeild US10Y in a bearish channel. Will it breakout to the up side or respect fail and break towards the downside?
US10Y yieldsYields are the factor that dictates what happens to the market next.
In case of a break above the white trend around 4.8% expect another push higher towards 5.2% which will mean the stock market might a final push higher, then a recession should hit at this rate.
in case of a break below the yellow channel around 4.35% expect further downside to 3.2% which should coincide with a healthy market correction and a run to safety with a rise in bonds, below this level should means recession is already in
Did the 10 year yield break in 2008?Good day Traders and investors,
The 10 year yield on the 6 month chart. This is the entire history on one chart.
What is going on with the 10 year yield? It is getting very, very volatile. It all started in 2008 with the financial crisis just looming around the corner. At the same time it broke the .236 on the Fibonacci sequence and has been diving ever since. That is until the next major crisis of the pandemic where is seems to have bottomed and took a strong bounce off a cliff dive. What does all this mean? did something break in 2008 like a lot of economist are saying? It's very possible. When we look at the chart, the 10 year yield compared to the last decade has been very stable. Even during the Volker years (late 70's early 80's) when interest rates spikes it barely made a move out from the norm and then rode the top of the trend as support for years until 2008. This volatility break out does look deferent and kind of scary. What will the volatility lead too, massive spike? or massive plunge? Could it also just bounce around sideways for years? What we have to keep in mind is, these are historically long-term trends. 20 to 40 years. Could this move up be a fake out? Yes, I think it's possible, however a fake out is on this chart 5 to 10 years, so it's of no major concern at the moment.
THE INDICATRORS
Right away, when look at the chart and the RSI, we see clear weakening and bearish divergence on the trend. We can see it playing out (bearish divergence) from 1968 to 1981, when the yield made a higher high but the RSI made a lower low. As we can see the divergence did play out, but it took almost 2 generations in 40 years. Also the ASO has been showing that the sentiment over the yield has been lessening over the years on the up swings and down swings, but it just had a major cross, so is that over now? Time will tell, a lot of it.
Touching on the Historical volatility again, we clearly see a sense of somewhat controlled or stable volatility for close to 100 years until 2008. Could this new volatility be the new trending range for the next hundred years? Possibly, if so, it shouldn't concern us. For now, we should just focus on the next 5 to 10 years and see what happens.
I have included a couple of scenarios in the chart. If the RSI gets rejected from this down trend, then yes, this is the chance that it could be a fake out move and then reverse and go lower. If volatility stays high and the trend is to go up for 20 to 40 years then I do believe the RSI would have to break this down trend. both of those in my opinions are scary, the 2nd one than the first. There is also sideways action for a decade and possible a cool down of the volatility before the next move, I would prefer this one, as it seems less scary to me.
THE FLUFF AND EXTRA
I think the yields being a fake out and go lower is the least likely scenario. However, (and here is the Fluff) my conspiracy mind has one scenario where this could happen. It all hinges and plays on CBDC's becoming a thing during this time frame. The theory is if CBDC's are introduced within the next 5 to 10 years then the yields could reverse, go back and make new lows at some point. The reason being is I don't think we can go negative yields without CBDC's. That doesn't mean it's a given if CBDC are implemented, it means the doorway would be opened for it. Remember, this is just FLUFF and opinion and means nothing.
Kind regards &
Have great day
Demetrios
JP10Y JAPANESE GOVERMENT 10 YEAR BOND YIELDJP10Y PLAYS A KEY ROLE IN YEN TRADING ACROSS ALL PAIRS
Interest Rate Differential: When JGB yields rise, it increases the interest rate differential between Japan and other countries. This makes JPY more attractive to investors, causing the currency to strengthen.
2. Capital Inflows: Higher JGB yields attract foreign investors seeking higher returns, leading to capital inflows into Japan. This increased demand for JPY causes the currency to appreciate.
3. Reduced Carry Trade: A higher JGB yield reduces the attractiveness of the carry trade, where investors borrow JPY at low interest rates to invest in higher-yielding assets. Reduced carry trade activity leads to a stronger JPY.
4. Increased Hawkishness: Rising JGB yields may signal a more hawkish stance from the Bank of Japan (BOJ), which can lead to a stronger JPY.
US02Y : The strongest 'indicator'The chart above explains.
Big decision for DXY and Stocks.
Good luck.
2024 is a wrap - time for 2025 outlook - let's go2024 will be a memorable year
-23% gains
-Mag 7 + Semiconductors + Bitcoin all contributing nicely
-PLTR was the top performing stock in the S&P 500 (impressive 340.48%)
As always, 2024 wasn't in a straight line up, though it felt like it at times
VIX had #1 and #2 largest single day moves ever (Aug 5 and Dec 18)
April was a sticky inflation pullback month
August was a Bank of Japan deleveraging weekend scare
FED dominated the catalysts with guidance, narrative, and wait and see between employment and inflation data
2025 will bring new president, new policy, new Republican power. Many were excited about this but there are still checks and balances and markets need more reassurance than hyperbole. I plan to look at income plays and trading plays were buy and hold. Whatever I do own equities and ETFs wise, I want protection just in case the market isn't as straightforward and bullish like it has been since Oct 2022.
Happy New Year - thanks for watching!!! See you in 2025!!!
US 3mo as short term Leading Indicator?As I continue to watch bond markets and the 3 month specifically I have noticed a pattern for short term bullish confluence with SPY.
I have highlighted (with the light purple dots) the pops in the daily 3mo chart that occur after at least a five day downward yield slide. Above the 3mo candles is a snip of the SPY chart that corresponds with the initial 3mo daily pop. The text in green notes the percentages over the following 7 and 13 trading days. A couple of the SPY snips actually fell off on the 14th day after the initial pop so that is where I am capping the potential gains going forward. Please also note that the Dec 4th pop resulted in a loss in SPY for both the 7 and 13 trading days afterwards.
The SPY fractal that starts from today’s 3mo pop (Tues Dec 31) is essentially a copy of SPY action from mid-Nov to mid-Dec 2024. If it were to play out we would be at or slightly above all time highs going into the Jan 20th US inauguration and then flat into Jan 29 FOMC. FYI…the daily sideways scale of the SPY snips does not align perfectly with 3mo daily candles. I did try to line up the starting day for each though.
There are of course 3mo auctions 4 times a month on avg. (large snip left lower on chart) so take this info as you will. I am only noting what I see as a pattern of a pop in yield following a significant decline in yield and the corresponding SPY price action in the following week or two. One could easily argue that the santa rally is not here this year…and the glaring head and shoulders on the SPY daily chart warrants more downside. I am choosing to remain cautiously optimistic with the bond information in conjunction with my overall thesis leading into Q1 of 2025.
I believe the bond markets close at 2pm today, so assuming todays 3mo candle remains a green pop I offer this thesis as a possibility.
Thanks and take care. Happy New Year all.
MR
US 10Y TREASURY: adjusting to Fed`s narrativeThe largest surprise during the Holiday week on the Western markets was a sudden move of the 10Y US benchmark yields toward the higher grounds. The 10Y yields reached the level of 4,629% after weightening the Fed`s narrative from the last FOMC meeting. The market is now anticipating a more hawkish Fed's policy in 2025. The next FOMC meeting is scheduled for January 2025, but there is no expectation that the Fed will make any move in interest rates during this meeting. As Fed Chair Powell noted in his statement in December, the Fed will continue to look at inflation and strength of the job market, before it decides on a next rate cut. Inflation is expected to stay sticky in 2025, while the market will continue to listen closely what Fed is saying.
Weelky Leading Indicators are NOT BullishThe Weekly Leading Indicators have had broken into Bearish mode.
SG10Y have broken up of a trendline
TIPS and TLT have broken down support
JNK similarly broke down of support
The combined US Equities weekly chart are at an indecision range, but daily chart analyis tells of a more bearish story.
SOXL is holding up somewhat though.
So while all 4 Leading Indicators are red flagging.
The Indices have yet to respond.
Watch for it... and be careful.
Happy New Year 2025!
UP "Please provide a meaningful and detailed description of your prediction..." Says Tradingview
Up. It go up. Why? Idono the same as you do or do not know. It's the simple things I think that makes dollars sound like soundness of mind. While lil Timmy has been working hard to get a few bucks to buy his favorite dog coin he heard about at lunch yesterday in middle school.
Asking a fool like me what to buy with his allowance. Who isn't looking for a return nowadays I guess even at 11 we need to make 1000x gainz because "10 years!?" "That's forever!" he and any other like minded person may say to me. I think all they heard was the "10 Year" Part...😋
Ya know? One things for sure we are all counting dollars when this or whatever thing you think will make you money moves up or down. Hummmmmm Maybe there's something to that whole I need a dollar thought?🤑
I bet it would be carzy to see the Yield on the 10 year US GOV Bonds run up to 16%.
What kind of future are we all living in when that happens??? Asking for this 11 year old thats asking me what the next best coin is from here....
YOLO Moonboyz 🌛 If you feel so inclined to do so.
🚽👄 Toilet Mouth: "Why do all your post say Short!?" or a bunch of "BUT, BUT, BUT"
⭐Not my job to tell you to buy or sell entries matter to most I only care about my exits.
⭐Let each person determine their cost to acquire and choice to play or not.
No Advice to give just thoughts that I can't shake after the last 8 years in the world of "CRYPTO"
Things 🤷♂️ #Fixed IDK!
🙏FOR JUST A HEALTHLY PULLBACK!
""KEEP CALM AND MANAGE THY RISK & BALANCE your Senses!""
I am The CoinSLayer 👨💻😈
You have been warned by The Coin SLayer!
P.S. Now witha bag!
P.S.S. well two or Ten
10 YR StuckAll bets are off until further notice following the Fed day rout. That said, it has been and continues to be the case that any meaningful improvement in rates will require downbeat economic data and softer inflation. At this point in the year, we're waiting until early January for the next major shoes to drop (NFP and CPI, specifically).
You Are Here -> 10YR YIELDSThe next financial crisis is potentially right around the corner
11:11
The question is, has the fed lost control?
Is it by design?
In less than 50 Days the fed gets back together, 11/7
Election is 11/5
Veterans Day is 11/11
Look What 10 Year Yields Have Been Doing for The Last 10 YearsThis is a 10 year chart of the 20 Week SMA of the US 10 Year Treasury Bond Yield.
The simple moving average of the US10Y formed similar head and shoulder patterns, one inverse, before the last two large reversals.
10 YR Heading HigherAll bets are off until further notice following the Fed day rout. That said, it has been and continues to be the case that any meaningful improvement in rates will require downbeat economic data and softer inflation. At this point in the year, we're waiting until early January for the next major shoes to drop (NFP and CPI, specifically).
10 YR Heading HigherAll bets are off until further notice following the Fed day rout. That said, it has been and continues to be the case that any meaningful improvement in rates will require downbeat economic data and softer inflation. At this point in the year, we're waiting until early January for the next major shoes to drop (NFP and CPI, specifically).
A Turning Point for RatesAll bets are off until further notice following the Fed day rout. That said, it has been and continues to be the case that any meaningful improvement in rates will require downbeat economic data and softer inflation. At this point in the year, we're waiting until early January for the next major shoes to drop (NFP and CPI, specifically).
Comparing US10Y/DXY/US500/VIX, fundamental/technical analysisProposed technical/fundamental analysis for US10Y/DXY/US500/VIX.
Bank unrealized losses on available-for-sale and held to maturity securities was $364 billion in Q3 2024; this number will continue to increase as long-term treasure rates increase (www.fdic.gov).
US10Y yield chart looks for yield to go higher, north of 5%. If treasury rates continue to increase, there may be a bank run, as banks get more and more underwater with their unrealized losses. DXY will go up above 120, US500 will crater below October 2022 low of 3490.2, and VIX will pop towards 80.
Understanding the US10Y Crab Pattern in 2024
The US10Y refers to the 10-year Treasury bond yield, which is a key indicator of the overall health of the economy and is closely watched by investors.
"Analyzing the US10Y trend, a bearish butterfly pattern has emerged at the 1.276 and 1.618 level, indicating a potential bullish trend in 2023. This pattern suggested a reversal in the current market direction, and The US10Y bond market has been exhibiting an intriguing pattern known as the "CRAB PATTERN," with implications for the year 2024.
This pattern suggests that the market may experience a period of consolidation before potentially reversing its direction. Additionally, the presence of a parallel channel further supports the notion of a bearish trend, as this technical indicator typically indicates a downward trajectory in the market.
Traders and analysts should closely monitor these developments and consider potential strategies to navigate the market amidst this anticipated trend.
It is crucial to conduct thorough analysis and consider various factors before making any significant trading decisions in response to the observed pattern and trend.
US 10Y TREASURY: only 50 bps in 2025?The Fed spoiled the market game for one more time. Although interest rates were cut by another 25 bps as expected, still the market did not like what Powell said about projections for 2025. He noted that the Fed expects persistent inflation, hence, the current projections are drop in interest rates by only 50 bps. Inflation expectations were also corrected, so now the Fed expects the PCE indicator to end next year at 2,5%, versus 2,2% previously forecasted, while its targeted 2% is expected to reach in 2027.
The inevitable happened on the Treasury market - yields went strongly higher. The 10Y US benchmark yields were moved from 4,3% from the start of the week toward the highest weekly level at 4,58%. However, they eased at Friday's trading session, after better than expected US inflation data, ending the week at 4,52%.
Holiday season on Western markets is coming in the week ahead. During this period of time it should not expect any stronger moves or higher corrections. In this sense, the 10Y US Treasury would most probably end this year around levels of 4,5%.
100 Years of 100% ProbabilityThis Chart shows the normalized Bollinger Band Width for the US Ten Year Treasury Bond Yield.
Basis = 10 Year SMA
Upper and Lower Bollinger Bands = 3.0 Standard Deviations from Basis
Normalized BB Width = (Upper - Lower) / Basis
For the last century, 100% of the time that US Ten Year Yields extended 3 Standard Deviations above their 10 Year SMA while their normalized Bollinger Band width reached this 100 year long trend, rates experienced a sharp and meaningful correction.
*** During World War II, width reached the trend line but rates remained at the 10 year average and did not extend 3 Standard Deviations above it.
SG10Y SG Govt Bond Yield UNCANNY heads up on US EquitiesHere is a rehash of the relationship between the Singapore 10Y Govt Bond Yields and US Equities ETF, SPY (Blue Line).
Noted that when the SG10Y technically breaks out, the SPY technically breaks down, and vice versa.
This is not 100% but happens an estimated 80% of the time, and recent occurences since September are marked out with bullish green or bearish red time lines, respective to SPY from the SG10Y leading indications.
Just middle of this past week, the SG10Y spiked strongly and broke out, the next day saw the SPY tank significantly. In fact, the MACD for the SG10Y had already pre-warned of the breakout two days earlier!
Given the current set up, as usual, I do my technical and charting projections. And in this case, it is clear that the Santa rally fizzled, year closign and next year opening should be weak until early February. Now, if this projection works as it should, then we would likely see a weak 2025 for the US equities... not only to take profit, but also offers opportunities to buy in at some point.
(side note: as far back as 2020, 2025 was marked as the year of some resurgence of affliction from the neck upwards. It is a little sketchy, but it would very well be the surprise to tank the markets enough... watch for it)
