USBONDYIED FALLING
Volatility is high in US Treasury bond markets, but yields fell this week. n our view, the tide is turning in favour of sovereign bonds.
GOLD IS RISING
US10Y trade ideas
US10Y ~ Intraday Analysis (2H Chart)TVC:US10Y intraday mapping/analysis.
US yields dip while bonds & stocks rip.
US10Y in clear downtrend with potential bearish H&S pattern developing, TBC.
H&S development would correlate with bonds/stocks pullback before further bullish momentum into EOY.
Left shoulder, head & neckline outlined. Right shoulder parameters:
Rally above ascending 1st trend-line (green dashed)
Resistance at 200SMA, gap fill, 2nd ascending trend-line (green dashed) + upper range of descending parallel channel (white)
Price action rolls over to re-test/break neckline & validate pattern
Prelim target = lower range of ascending parallel channel (light blue) + 50% Fib confluence zone.
Note: break of "neckline" before right should formation negates H&S = express trip to prelim target.
10-year US Treasury bond : Black Swan and WOLFE Wave detected10-year US Treasury bond
Black Swan and WOLFE detected
EMA.50 and EMA.200 are possible targets
Look :
PRZ
Levels: Fibonacci / Bollinger / ICHIMOKU
US10Y Extremely overbought on Bearish Divergence. Sell longterm?The U.S. Government Bonds 10YR Yield (US10Y) is having the first red month (1M) after rising non-stop since May. It has been on extremely overbought levels for the last 12 months as the price established itself above the multi-decade Bearish Megaphone pattern, the same way it was oversold below it following the March 2020 COVID crash. As you know the price quickly corrected back inside the Bearish Megaphone in a pure technical harmonization process of the extreme levels.
Technically it should follow a similar reversal now again, as the most important technical development of the year is October's Lower Highs formation on the 1M RSI. This is a huge Bearish Divergence as the price during the same period is trading on Higher Highs. The same kind of Bearish Divergence has only been spotted another two times in the last +40 years. On both occasions, an aggressive decline started. As a result it is only natural to expect a 1M MA50 (blue trend-line) test before 2024 is over, which right now is a huge early sell signal.
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Relationship between US 10yr yield & the DXYAs traders look for signals on potential moves in the FX market, a frequent question I receive is regarding the relationship between the 10yr yield and the DXY.
US 10-Year Treasury Yield:
The US 10-year Treasury yield represents the interest rate on the 10-year government bonds issued by the United States.
It is considered a benchmark for long-term interest rates and is often used as a reference for borrowing costs across the economy.
This yield is influenced by various factors, including inflation expectations, economic growth, and monetary policy.
US Dollar Index (DXY):
The US Dollar Index, or DXY, measures the value of the US dollar against a basket of major foreign currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.
It provides a snapshot of the US dollar's strength or weakness relative to these currencies.
Relationship of US 10yr yield & DXY
The US 10-year yield and the DXY have a relatively strong positive relationship.
Increases in the yield on 10-year Treasuries have the tendency to draw capital into the US bond market because investors find US government bonds more attractive with higher yields.
Because of the increasing demand for the US dollar to buy these bonds, the dollar gains strength leading to a rise in the DXY.
As with any relationship between financial instruments, it is seldom 100% positively correlated given that there are a variety of factors, including inflation expectations, economic growth conditions, market sentiment, and central bank monetary policy.
US 10Y TREASURY: yields have peakedThe final breakthrough for the US Treasury yields was the latest FOMC meeting where the Fed decided not to increase further interest rates. Although, they are leaving the possibility for further hikes in case that inflation remains persistent, still, the market perceived it as the end of the Fed's rate hikes.
At the beginning of the week, the 10Y US Treasuries tried for one more time to test the 5.0% level, reaching only 4.92%. There was clearly no market strength to push the yields further to the upside. After the Fed's meeting, yields dropped to the level of 4.6%, while after the Friday`s jobs data, yields ended the week at the level of 4.57%. There is still space for yields to relax and move to the downside. Actually the level which is currently pending testing is 4.4%, which might be tested during the week ahead. Further supporting level stands at 4.0%, but currently there is no clear indication on charts that it might be tested in the week ahead. Evidently, the yields started their reversal path, and they will certainly not return back to the previous levels around 5.0%.
US10Y - Is it a "sea change" or a strong buy for TLT and TMF ?In December 2022, Howard Marks told in an interview that a "sea change" is underway in markets.
When I have seen below charts of TVC:US10Y , I have remembered that interview:
(Unfortunately I needed to remove the graph due to lacking reputation points. Maybe you can view with //x/HZKlWa8U )
TVC:US10Y was in a downtrend in a channel since 1980 and this long lasting channel has been broken at April 2022, and upper line of the channel became support at July and August of 2022. So there are some signs that it's not a fake going out of channel like the one in 2020 March.
Does Howard Marks right by saying it's a "sea change" ?
And in this weekly chart of TVC:US10Y , we can see it has formed a new uptrend in a new channel:
(Maybe you can view the chart with /x/DHeM0t8W )
See how good it has used that upmoving support. Now, we are again hitting that support and if that support line is broken, it would be a "strong buy" for NASDAQ:TLT and AMEX:TMF .
Both graphs have given bullish divergence recently:
(Maybe you can view the charts with /x/2jGkJkCJ and /x/5NGqJ3Ze )
This week we will see if TVC:US10Y will break the channel and confirm the bullish divergence of TLT and TMF. If the support would been broken at TVC:US10Y , then 4.20 and 3.40 and 2.75 are the levels to watch for the bullish trend of NASDAQ:TLT and $AMEX:TMF.
In conclusion, if TVC:US10Y will break the channel this week, I'm long in NASDAQ:TLT and $AMEX:TMF.
If not, we will keep watching if Howard Marks was right and it's really a sea change.
US10Y ~ November TA Outlook (Weekly Chart)TVC:US10Y chart mapping/analysis.
US10Y getting dumped off combination FOMC decision, US economic data + US Treasuries update triggering institutional short covering.
Bond & equities market squeezed higher, in-line with seasonality.
Possible bearish H&S in development on lower timeframe, pending pattern confirmation.
10year and 2 year Yield Curve InversionThe 10-year and 2-year yields foreshadow a recession. However, the market top is indicated when the yield curve stops inverting around the green area.
$US10Y Negative Divergence Played Out"The TVC:US10Y Negative Divergence Played Out as we observed a scenario where the momentum indicator, such as the Relative Strength Index (RSI), had been showing bearish divergence with the U.S. 10-year Treasury yield. This indicated a potential weakening of the yield's upward momentum, despite higher prices initially. Subsequently, the divergence 'played out' as the 10-year Treasury yield indeed reversed its upward trend, aligning with the bearish divergence signal. This divergence resolution may have led to a shift in market sentiment or investment strategies, impacting various sectors and asset classes."
10 years US Yield UP to 1.3%10 years US Yield UP to 1.3%,that position 2016.7,or 2020.2.at that time in 2016,FED pause Hike Rate in whole year.at sametime China supply Money to property, property price fly high in China.
The Bond Market is Pricing in a Collapse of The Yen Carry TradeThe spread between the US10Y and JP10Y has historically been a great leading indicator of contraction within the Yen Carry Trade and likely will be into the future.
If we were to apply TA to it, we can see that the spread appears to be Double Topping and has formed a Bearish Shark at this top as the RSI breaks down and the MACD Diverges. If we are to take this as a warning, then we should expect this spread to go down significantly, and that would be accompanied by the contraction of the Carry Trade, leading to lower liquidity and signfiicantly tighter credit conditions and ultimately a depreciation in market pricing.
I think we could see JPY and USD strength during this time but would avoid other currencies.
10 & 30 have short term topped since call on Oct 23GOOD MORNING!
Didn't have time to post yesterday.
Busy the entire day until I got home @ 9pm!\
10 Yr #yield topped the day the original tweet was posted.
30 Yr yield topped the following day!
#stocks #bonds TVC:TNX (See profile for more info)
10 minus 2 year Yield SpreadTime bomb...
1990-91
recession
2001
recession
2008-09
recession
2020
recession
#recession #gold #spx #purchasingpower
US 10Y yield has topped short-termThe Fed left its policy rate unchanged at 5.25%-5.5% and the US 10Y yield sold off on the back of a less hawkish Fed.
The daily chart reveals a small top completed between 4.80-5.02 and this implies a short-term target of 4.58.
We are viewing this as a correction lower, rather than the end of the longer-term broader upward trend at this stage.
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Strongest Recession Signal EverThe yield curve has inverted to the most extreme degree ever, which is a warning that a recession is coming. In this video, I analyze the charts for the AMEX:SPY S&P 500, NASDAQ:NVDA Nvidia, NASDAQ:AAPL Apple, and the yield curve on U.S. Treasurys to see what they're telling us about future price action.
In the video, I mention that the bull rally following the Great Recession was primarily due to the Fed's monetary easing. The chart below shows evidence of this. When the value of the assets added to the Fed's balance sheet is compared against the value of the S&P 500, the stock market appears to have essentially moved horizontally. This shows that the primary reason for the stock market's rally is the central bank's extreme expansion of its balance sheet.
If you enjoyed this post, I would greatly appreciate it if you leave a boost! If you have any questions or would like to share your thoughts, feel free to leave them in the comments below.
Important Disclaimer
Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
Possible bull flag? Pretty new to this. Looking for feedback to this idea. If breakout occurs, target is approximately the pole height.
Pick your fib target. How far do Bonds crash?Inverse chart of US 10 year bond yields.
6.249% looks like near certainty.
8%, 10% & 12% are all on the table.
US 10-year yield topped out?The US 10-year yield is showing signs of topping out after recently touching a 16-year high just above 5.00%. It’s still too early to confirm that long-term yields have topped out but given the entrenched inflation, risk-off sentiment and growing US government debt, US long-term yields will probably remain elevated until the Fed’s interest rate policy becomes clearer. Yields of 4.80% is the first level of support and a break below this level will allow yields to ease lower towards 4.50%.
There is also a degree of divergence on the RSI that I'm keeping my eye on.
US 10Y TREASURY: waiting FOMCThe US Treasury yields eased a bit during the previous week, as inflation data are showing further relaxation in inflation figures. The 10Y US benchmark tested 5.0% level at the start of the previous week, however, the week ended at level of 4.83%. The FOMC meeting is scheduled for November 1st, but current expectations are that the Fed will not further increase interest rates due to the latest posted inflation figures. However, Fed Chair Powell's statement after the meeting will be closely watched, which might bring some volatility back in Treasury yields.
The 10Y Treasury yields will start the week ahead by testing 4.8% level. At this point on charts, there is no indication that yields have opted to return to the levels of 5.0% and above, in which sense, some further relaxation to the downside is probable. In this case, 4.6% might be a probable target and a short stop on the road toward 4.4% in the weeks to come.
10 Year wants 5%...at a minimumDo you really need to ask if interest rates have topped out?
Head & Shoulders patterns at tops and bottoms are generally spot on...this Inverse H&S pattern occurred at a bottom, clearly broke out from the neckline and just wants 5%...at a minimum.
"Don't fight the Fed"
The Fed is not going to pivot to the downside anytime soon...why would they? What makes anyone think this is on the horizon?
Here are the 3 things Powell stated would need to happen for a pause (not a pivot ) at Jackson Hole:
1. Lower Growth
2. Softening Labor Market
3. Inflation on pace to 2%.
2022 Q2 vs. Q3 GDP came in positive and much stronger than expected, Jobs reports remain hot and inflation isn't anywhere near 2%. So at this point, we can't even check off any boxes for a possible pause in rate hikes let alone a pivot . In addition, Powell hasn't really wavered in his statements since Covid, he's been pretty straightforward, so why would he all of a sudden change his behavior?
US10Y: Channel Up intact but first time on a Bearish Divergence.US10Y continues to rise inside a long term Channel Up, with its 1D technical outlook bullish (RSI = 57.618, MACD = 29.942, MACD = 0.116). The 1D RSI though is for the first time in the recent months under a LH bearish divergence so for the first time the probabilities for a bearish reversal get stronger. Consequently, if the price crosses under the Channel's bottom, we will see and target the 1D MA50 (TP = 4.600). Until then, we will but on the first 1D candle that closes under the S1 level, aiming at a +10.70% rise (TP = 5.185).
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10YR Treasury to Resume Rise Post-FedThe 10yr has taken a break in the past couple days off it's highs. This is normal but and happens regularly in the relentless overall path upwards in rates. The Fed has made all the signals that they are blind to the supply and demand issues of treasuries and willing to allow the market to do what it will as long as it results in less inflation. Chairman Powell in his September 26th speech stated that he still does not believe rates are restrictive enough and with a 4.9% GDP - although questionable at best - he will likely continue his hawkish tone in the November 1st meeting. Once the market realizes there will be another period in which no help is coming - along with a massive issuance of treasuries coming in November and in the line up for 2024 - rates will continue to rise into the end of the year. Target is 5.5% by EOY. I expect it to be choppy, but we won't be stopping here at 5%.
We broke about the blue horizontal line which is a Gann fan dating back to 1982's peak in rates. This is the first time in 40 years we've risen above this line and we've stayed over it. The pace higher will continue until something breaks or the Fed changes tone on their QT policy.
No one wants our treasuries - Japan, China, etc. The Fed isn't buying and Yellen keeps adding billions more to the market weekly. Important dates are November 8th and 9th where the 10 year and 30 year auctions take place. A bad auction could be the onset of the rise if the Fed doesn't provide that on Nov 1.
