Recession InboundMaybe we do get one more .25 out of this cycle, but surley the pause follows. The bottom of the markets shall be determined by earnings now...by reluctantplumber2
The SVB Collapse and Why It Matters To YouInteresting situation with the collapse of SVB (SIVB), the people have yet to realize we control the market not the central planners. and the collapse of SVB is a realization of that power. So , here is what i know from the very little articles and podcasts that I listen to and I will give you guys the why its important. From what i know is that SVB business model was somewhat risky in the first place, and their main consumer base was startups, and tech startups. hence the name Silicon Valley portion of Silicon Valley Bank. Now a little money education... in the world of money and currency (remember currency as current it will become important later) there is a concept called the velocity of money, basically the volatility of money. for my stock traders think the VIX. when the VIX is low there is no money to be made because money is not moving. but when the VIX is high there is plenty of money going around so why not use your dollars as napkins, right or "fun coupons"! this is the velocity of money the faster a person can make money move the more money they stand to make. the banks know this. So when you go to the bank and deposit your check your money is already out the door into something else before you're able to but your wallet in your bag or pocket. this happens because of what is called as the "fractional reserve system" and to be honest its a "F"ed up idea but has worked thus far. what this system means for every dollar you put into the bank, the bank can lend out 10$. A bank is a business it makes its profits by lending money, and when you save your money it cost the bank money, because of your .01% interest rate. the reason for the big push for open accounts is because the more open accounts the bank has means the more money they have liquid, which means the more they can loan out, which means the more they stand to profit. now as an insurance policy the US government makes the banks keep a fraction of their total account balances on site incase of what they call a "bank run" happens (get to what a bank run is later) Now, normally you dont notice this or even care because when you go to the bank and want to pull 100$ from your account its no big deal whats a 100$ when your dealing with 100s of thousands. you want a 100$ you get 100$ instantly. But want to see the system become a problem for you, if you have more than lets say 25,000$ or more in an account go try to pull ALL that money out and see what type of road blocks you encounter. they will make you give ID, reasons for shutting down the account, basically your first born child and your blood type. partly is because they really want to know why you're closing the account, because thats profits walking out the door. but the main reason is, they have to reach out to sister branches and other banks to pool that money together to be able to give it to you and this typically happens like over night. so if you think you're about to waltz into your local bank and demand a 25,000$ check right then and there you're sadly mistaken. the same exact process happens when you take out a mortgage, now your talking $200K and up so now there are more road blocks. whether you're the buyer or the seller. you sell your house for 500K and you think that check you deposited is there right when you get it... yeah its not! back to the currency comment money is now a currency it has to keep moving to keep its value. think of it as a river, mostly you can drink water from a river and be okay because bacteria cannot grow in moving water but drink water out of a pond and you just might catch Syphilis (sarcasm intended). money is the same way, the faster you can make it move the more you stand to make and the healthier the money is, if take money out of the river and stick it in your pond as a savings account inflation will eat it alive making it very unhealthy. Even historically before all this crazy inflation started happening the savings rate in a savings account was like 0.01% and inflation was around 2 percent. Now the importance of this lays with the SVB. When looking at their business model it seems solid... "invest in high beta companies, or higher risk endeavors, then to off set this risk we will load up on the safest paper assets money can buy... the US 10Y bond." Officially the US hasn't defaulted on loans before... i mean we will print more money before we default. I mean it sounds like counterfeiting if you ask me, but who am I just a low key, low level, low volume trader with a computer living in my moms basement :) sarcasm... or is it?! Well from the looks of it it would seem SVB bought a ton of these 10Y bonds in 2021 when the economy was ripping and roaring. So, when bond yields are down their prices are way up. So in the full swing of the "roaring 20's" yields were around 1.12X or keeping it simpler 1.1XX. so that must mean the value must of been sky high. My only rational thought for this type of purchase was the risk manager must of thought he could off load the bonds in the bond market for a nice profit thinking good times were going to continue. On the surface it seems okay high risk business model with a low risk counter weight. But "We the People" were leaving SVB, and going back to what i said about taking your 25,000$ savings out, and they were running out of reserves and their bonds were worth less than the paper they were "printed" on, so they filed a loss on their report. on the surface this was fine, because only die hards read a companies 10Q or 8A but all it takes is one... and there is always that one Guy... and not this Regular Guy either. I personally dont like the instability of the tech industry. i mean i do believe we will make a full blown terminator but i dont want to gamble on which company that is regardless of what the gain is... might as well go gamble in my opinion. So, because there was a mass exodus of accounts they were having a hard time fill orders so file your 8A detailing you're offering more stocks to drum up some money and it falls flat. people read said 8A and see that you dont have cash so the word got out and the consumers made a bank run. Dont get it twisted either this can happen to any commercial bank JP Morgan, BofA, Chase, Citi, Credit Suisse and the like. a bank run is when the majority of depositors want their money back now and they do it in close succession of each other forcing the bank to say "we dont have your money" so they in essence "run" to the "bank" to get their worthless paper. Now, what i just learned is back in '08 our amazing government passed legislation basically stating they will no longer bail out banks. (honestly if you guys know the piece of legislation please post it in the comments) I agree with this legislation because when I lost 15k on a bad USDCHF trade 7-8 years ago the government didnt bail me out. that was all my money... just gone in a matter of seconds. So the US government came out and said " we will make sure all depositors will get their monies back... How? step in Bail-Ins And again a bail in is something i literally just learned about... i swear at this point were just making -ish up at this point... ok so we know what a bail out is... basically the US government funnels all this cash into a failing business(s) and the tax payer picks up the tab. so what is a bail-in?... glad you asked a bail-in is when the depositors pick up the tab... How? well the FDIC picks up the first $250K and anything over that 250K is now funneled into bank to help offset the loss. so if you have $500K in the bank the first $250K is yours... uncle sam gives it back via FDIC (which that money has been long gone spent, so i dont know where theyre going to pull money from to keep this facade of the FDIC up) and the next $250K is the banks... So congratulations you have just become a unwillingly silent partner of a failing bank. -ishy news is that the current administration is trying to give more power back to the IRS and bring it back to its glory days like it was in the 80's so you wont be able to claim those losses on your taxes, if you had a business friendly administration you might actually have a fighting chance. i have a feeling the whole world is watching what is about to happen, because the entire banking system relies on high value accounts. if the US says tough luck that might send uneasy shock waves to all the high income earners and might make them want to pull their funds out of the banking system... there is a very interesting article on Credit Suisse that i want to read so ciao! by ARegularGuy115
US10Y : Holding the 200MABond yield had been dropping since SVB. US10Y as well as US02Y fell until both hit the 200MA. Lets see if it will stay where it is now or fall further. But I think the next FOMC will decide. And watch out for OIL. Good luck. P/S : Do not just believe what I say. Use your common sense.Shortby i_am_siewUpdated 116
this is the blow off topthats right guys, the whole damn thing is a blow off top! surpriseeeeeeeeeeee.Shortby rhall6451331
Super inversionYield curve has been very inverted for the last couple of months. This is the strongest signal for a recession compared to the fake out that happened in 2022. Strap on to your trousers there is more bear market to come most likely for pretty much everything. Short big run ups and stocks that are highly overvalued and there will be a continued correction for many names. Shortby MysteriousPersian111
3 month YieldMarket priced out the .25% hike for next week, if the Village Idiot sticks to his guns (which he should) then the market tanks next Wed because they need to price it back in and adjust portfolios accordingly. The problem here is that we're dealing with a complete idiot, so chances are high that he won't do what he needs to do. Tanking the market is part of what's necessary to control inflation, even if it means more banks go under. Failure to do so will lead to uncontrolled inflation which will necessitate even higher interest rates which means even more banks will go under. Basically it's pain now or more pain later, and Simple Jack Powell isn't smart enough to understand that. Just imagine, if he doesn't get inflation under control now and it goes into the teens like the 70's, and he has to slowly raise rates over 10%.... then you figure we'll really have an 80's S&L crisis except with larger regional banks this time. The damage was done when they did COVID QE, I said it when they did it. The Fed members are older than I am (51 years old), they should all know better since they lived through the 80's S&L crisis. The idiots were all too busy snorting coke while working for investment firms apparently. Remember when he said "transitory inflation"? LOL, Pepperidge Farms remembers.by hungry_hippo4419
ten year yield plummetsToday the 10YY has proven that the last breakout turned out to be false as Treasuries are being bought hard. I think this is a fear move because of banking issues. Usually a lower interest rate / yield would be positive for stocks but not necessarily in the face of other bad events happening.by MrAndroid111
5.00% Target on 2yr Yield5.00% Target on 2yr Yield using simple trend analysis. The Fed follows the two year, so once it hits 5%, the Fed will also stop tightening.Longby MULMANUpdated 1
US02Y: BOND MELTDOWN / 4.00% CROSS / MACD CONVERGENCE / RSIDESCRIPTION: In the chart above I have provided a simple MACRO ANALYSIS on current bond market meltdown where the US02Y dropped nearly 25% within FIVE TRADING SESSIONS. POINTS: 1. US02Y deviation is simple & marked at every 1% difference as bonds rise and fall within the same range percentage therefore it has a rubber band like price action relationship with it's lowest 1% points. 2. Overlapping Orange Line represents ES1! a US Market Future. 3. Dotted Green Lines represent continuous downward momentum in past Bear Markets (2002 & 2008). 4. Bubbles overlapping dotted green lines represent initial break of supporting bond percentage %. IMO: In my opinion the most concerning factor to take into consideration when it comes to current bond positioning is the STEEP RISE IN PERCENTAGE especially when the overall US market momentum is tied to BOND PERCENTAGE during both RISES & FALLS & the STEEPER THE INCLINE THE STEEPER THE DECLINE can become. MACD: Notice a complete meltdown of Bonds when MACD confirms convergence to MEDIAN & eventually breaks past median and falls into into negative territory. RSI: Notice that unlike in other recessions RSI levels have seen more consistent exposure to MEDIAN of 50. But as of lately from a MACRO perspective that is not the case as we have seen current RSI levels linger around 70 or above in EXTREMELY OVERBOUGHT TERRITORY. SCENARIO #1: In a very BEARISH scenario we come to see BONDS PERCENTAGE go through a complete free fall. SCENARIO #2: In a less BEARISH scenario we come to see BONDS PERCENTAGE go through an extended consolidation phase with PERCENTAGE LINGERING ABOVE 4%. FULL CHART LINK: www.tradingview.com TVC:US02YShortby DGSTBROKERACC4
US02Y is on a breaking point. Great news for stocks!The U.S. Government Bonds 2 YR Yield (US02Y) is testing its 1W MA50 (blue trend-line) for the first time since May 31 2021. The 1W RSI is on the very same Lower Highs trend-line rejection that it was during the December 17 2018 1W MA50 test! Needless to say this shows that the price is on a critical point as when it broke in Dec 2018, a downtrend followed that was at the bottom of the U.S. - China trade war and sent stocks (black trend-line = S&P500) on a 1 year mega-rally (until the COVID crash). Will we have a repeat? ------------------------------------------------------------------------------- ** Please LIKE π, FOLLOW β , SHARE π and COMMENT β if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- πΈπΈπΈπΈπΈπΈ π π π π π πby TradingShot5525
Bond Yield Drops 5% Causing - Gloomy Bank RunOkay by now you heard of the SVB Bank Run -- The US Government Had To Step in -- "To Save The day" -- To make it more ugly the bonds have dropped by -5% -- Only producing +4% per year. -- Meanwhile the head of the US central bank is planning to increase borrowing fees to 6% -- that is 2% more than bond "cashflow" -- Banks that Borrow from the US Central Bank Using Bond "cashflow" are going RED! -- This why you learning trend analysis will help you -- 1-If you want to protect yourself 2-If you want to have a better advantage 3-If you want to learn how to trade well -- Before the bond "cashflow was a cool +4.5% now it dropped to +4% as show in the chart above. You need to learn the how to read the direction of the trend -- study the above chart to see what happened on Monday and how the indicators moved. The 3 indicators used in the chart above -- 1)Momentum 2)DMI 3)Parabolic find these indicators on the trading view platform -- stay tuned for more information. Shortby lubosi1
YIELD CURVE HAS LIKELY BOTTOMED--RATE HIKES WILL ENDthe #yieldcurve 10y2y. The Weekly Chart has a picture perfect hammer candle striking EXACTLY at the 1.0 Fibonacci Extension at -1.081%. This fibonacci bounce, coupled with the banking crisis, and the huge drop in the 2y yield (BIGGEST DROP IN 2Y SINCE 1987), leads me to believe the curve has bottomed. by mjmassens111
US10Y - SVB Smokescreen πΉWho knows maybe its a coincidence πΉ but SVB collapse happened on Friday and on the very same day the first US10Y bearish momentum candle printed pulling down and away from the long term Fibonacci cluster and the Demand Line from the lows. Friday was the first day the yields bear took over. The 3rd wave before the collapse grinded up the Demand Line and then printed a mini blow off top shakeout reversal pattern. FWIW we shorted TBT to take advantage of the decay as the day MACD lines crossed on Wednesday. But anyhow the take home point is that the news have scared everyone away now. Everyone now knows its a terrible time to buy, especially anything classed as "risk on." Meanwhile the crypto bull market has been going 2 months. And the stock bull market is about to begin. Its the same game at every bottom - works every time πΉ. Not advice. Shortby dRends35Updated 3313
$TNX US02Y are CRATERING, Yields falling hardLast week we mentioned that #yields cratering like they did was not normal. Currently they are all at support with $TNX holding better than short term yields. The 10Yr has BOUNCED a bit off support. In a positive note it does lessens the inverted Yield curve :D We'll see how this scenario holds. What's happening today is more SPECULATION than anything else. The belief is that the #fed will stop raising rates due to the the bank closures that are happening. IMO I don't think it'll stop them but MAY slow them down a bit. The Fed Reserve HAS to pick between #economy & #stocks. While the Fed has been friendly to equities and markets in the past its main concern in the US Economy. They also care about the US #dollar.by ROYAL_OAK_INC1
US 10 Year Treasury The bond traders are the most accomplished on he street. This chart shows the blow off from news. It is important that we understand the if rate sink more this will but a huge pressure on all stock and upward push on gold. Please look at this chart and understand that a interest move much lower could cause a huge reaction by jdouglas0201
Biggest Drop since 2008 - Right After our Post πGood that I always TRUST my Charts: US Government Bonds 10 YR Yield has dropped 'nicely' since my last post, which was 'against the stream' since when i posted it Powell was being extra-Hawkish and situation was different. News: The yield on the 2-year Treasury note fell sharply on Friday as the shutdown of Silicon Valley Bank sparked a flight to safer assets such as government bonds. The yield shed at least 46 basis points over a two-day period, a sudden decline not seen since September 2008 , when the markets were in the throes of the global financial crisis. Perhaps by no coincidence, the flight to bond safety this week was caused by the biggest bank failure since the financial crisis. These were supposed to be 'Good news', rates could ease and markets (and crypto) could do better but unfortunately it all happened for the wrong reasons: Some Banks going bust. Better check my other posts today. Everything changes FAST so watch out for the CPI tomorrow: If inflation is better the Feds are saved...if inflation persists we could ALL be in DEEP trouble. One Love, The always optimistic Professor Shortby FX_Professor10
Will 2008+ repeat itself?Can 2008 be repeated? And the next fall in the financial markets? We will see in the coming weeks, but when the domino effect starts, it will be interesting Shortby SK_Analytics1
The 10 - 2 spread suddenly contracted by 20%This finally might be the beginning if the re inversion of the yield curve. When it crosses above 0% prepare for something unexpected to start the sell off. Might be a chain event from all these banking issues. This is the calm before the storm.Shortby BGMind_Control1
2 year yield plummetsThe 2 year yield has dropped below the Fed Funds rate. This appears to be the bond market pricing in an imminent Fed pivot.by MrAndroid1
US10Y - Strong support around 3.60%US10Y - Strong support around 3.60% (green line - uptrend from 2020). Multi-decade red downtrend line, already broken. Longby platinum_growth1
DXY is now Risk On scenario now as banking sector gets crushed!Sharks are smelling blood in the banking sector and they are loading up to strike. Last week, we saw Silvergate Bank collapse and shortly after that, Silicon Valley bank (SVB). Within 48 hours, 2 moderate size regional banks went under. Last Friday, several banks tanked at least 20% and few were halted due to massive shorting. The house of cards are falling and this situation looks like a Lehman Brother's. Contagion will spread to vulnerable sectors such as housing and auto. Jerome Powell wants to further increase interest rates, which will cause more destruction. Investors will be spooked and wanting to pull their money out of Dollar debt system and investments. 2 year US Treasury Bond yields dropped off the sky. With US national debt being so incredibly high at $32 Trillion and counting, US Treasuries are also no longer safe havens. Gold and Crypto perhaps? DXY just broke new lows on Daily timeframe. The bear market rally is over I believe and with the catalyst of collapsing banking sector with its contagion expectations into other sectors, DXY is Risk On now, which is Bearish. By Sifu Steve @ XeroAcademyby XeroAcademy1
SG 10Y Govt Bond and SPY relationship Part IIIn a bearish (engulfing) week for the SPY, it appears that there is more downside to follow, which I would expect. Thing is, it appears that the SG 10Y G-Bonds broke down a supporting trendline, giving advance heads up that it would be a bullish rally in the weeks to come. Previous dotted arrow line is now sold red as the SPY (blue line) moved up for a last hurrah and retraced really hard down in the weeks following from mid-Feb. Expect a bit more downside, but also expecting a bullish recovery given the heads up from the SG 10Y G-Bonds. The green dotted arrow lien depicts this expectation to last till mid- to end-April. Let's see...by Auguraltrader2