US10Y trade ideas
US 10Y : "FED vs MARKETS" |...who will win? | (Part.II)The market is waiting for one of the most important events that could give a clear direction for the coming months. Today FOMC will release interest rate decision and the main players ( TVC:DXY , TVC:GOLD , VANTAGE:SP500 and FX:EURUSD ) will suffer the consequences. Even if we cannot rule out a 25bp increase, most analysts believe that a pause may be the right choice, also because the usual press conference is not scheduled for the next FOMC meeting, so the board could take advantage of this opportunity, to explain this "temporary change in direction" to the market.
So, what will happen today? No I have an objective answer to this question, unfortunately I am not a guru but a simple Trader, so today we will limit ourselves to following events.
Having said that, from a technical point of view, we were lucky in March because we widely predicted this increase in yield rates from 3.30% area to a new high (wave 5 for Elliottians) in Part. I of this Analysis. On weekly chart the trend is bullish and the next technical levels are around 4.46%, 4.61% and 4.7%, but today TVC:US10Y could take any direction.
US 10Y : "FED vs MARKETS" |...who will win? | (Part.I)
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US 10Y TREASURY: digesting week is over?Markets spend the previous week digesting the latest information from the FOMC meeting regarding interest rates levels in the coming period, as well as FOMC economic projections for the next two years. It all created one quite a challenging week on US financial markets, as well as for the US Treasuries. The 10Y yields reached 4.5% immediately after the Fed Chair speech after the FOMC meeting on September 20th, however, during the previous week yields continued to surge further, reaching the highest weekly level at 4.67%. This could be treated as a sort of market overreaction, as yields soon returned to the level of 4.57% where they are finishing the week.
Yields continued to move within an overbought momentum for a second week in a row. This adds to the high probability that yields will further move toward the 4.5% levels which is more realistic to current economic prospectus and wording supported by the Fed. At this moment on charts, a 4.3% level could be the next target for 10Y yields, however, it might take some week or more until yields clearly reach this level.
There is a risk that $US10YR may further breach the 5% rate The US 10-YR Government Bond Yield is at risk of breaching further to as high as 5% which will then weign in more on the other safer haven yellow precious metal #Gold.
A rising yield for the past years since Covid erupted has brought pressure on both equity markets and Gold was never an excuse for this.
Why Gold shall keep falling? Real yields.dear fellows.
we believe gold prices are likely to keep falling, because unlike many analysts say, it is not a hedge against inflation, rather against real yields.
real yields have been rising, and thus, gold prices should fall.
in this video idea, we show how much divergence currently exists between these charts, and why in the next couple of weeks one can expect further losses in the gold price.
thank you for your attention.
best regards.
Inverted Yield US10Y-US02Y==Late 1970s to Early 1980s:
Yield Curve Inversion: The yield curve inverted several times between the late 1970s and early 1980s.
Economic Outcome: The U.S. experienced two recessions during this period: one in 1980 and another in 1981-1982.
Stock Market Outcome: The stock market faced significant volatility, with the Dow Jones Industrial Average (DJIA) experiencing declines during these recessions.
==Late 1980s:
Yield Curve Inversion: The yield curve inverted in late 1988 and early 1989.
Economic Outcome: This inversion was followed by a mild recession in 1990.
Stock Market Outcome: The stock market faced a downturn in 1990, with the DJIA dropping by around 20%.
==Late 1990s to Early 2000s:
Yield Curve Inversion: The yield curve inverted in 2000.
Economic Outcome: The U.S. entered a recession in 2001, partly due to the bursting of the dot-com bubble.
Stock Market Outcome: The stock market began a decline in 2000, with the tech-heavy NASDAQ Composite Index dropping significantly due to the collapse of many internet-based companies.
==2006-2007:
Yield Curve Inversion: The yield curve inverted in late 2006 and remained inverted into 2007.
Economic Outcome: The Great Recession began in December 2007 and lasted until June 2009, triggered by a housing market crash and subsequent financial crisis.
Stock Market Outcome: The stock market experienced a significant decline, with the DJIA losing more than 50% of its value from its peak in 2007 to its trough in 2009.
==2019:
Yield Curve Inversion: The yield curve inverted in August 2019.
Economic Outcome: While many analysts were concerned about a potential recession, the U.S. economy remained resilient in 2019 and early 2020. However, the unforeseen COVID-19 pandemic in 2020 led to a global economic downturn.
Stock Market Outcome: The stock market faced a sharp decline in early 2020 due to the pandemic, with the DJIA dropping by over 30% in a matter of weeks.
It's essential to note that while the inverted yield curve has been a reliable predictor of recessions in the past, the exact timing between the inversion and the onset of a recession can vary. Additionally, other factors, such as global events, fiscal policies, and technological shifts, can also play significant roles in economic outcomes.
Why we expect EURUSD SPX to keep falling.Dear fellows. In this short video we present our case that EURUSD tracks US10Y since 2020 on an inverse relationship. We also expect the yield curve to keep steepening, and by assuming Fed funds rate "higher for longer", US10Y is expected to rise further.
Higher US10Y, thus, implies in lower EURUSD and SPX, as well as other major market indexes.
The particular dynamics of each does not ensure a day to day follow up, however, eventually they do catch up.
Thank you very much for your time. Critics and suggestions are welcome.
Best regards.
Long position US10YHi traders! 👋
Let's take a look at US 10 year bond yields. It's has been in an up trend for half a year now. We expect it to continue to the upside. Right now the price is testing the resistance line. We expect the price to come back to the historically strong support zone and bounce back upwards if it can hold the price. The target zone will be at the upper resistance line.
What do you think about this idea? Let us know in the comments!
US10Y: Short term pullback ahead.The US10Y hit the top of the five month Channel Up, which started after a 5 time hold on the Support Zone, while the RSI shifted to LH (RSI = 68.642, MACD = 0.088, ADX = 56.354). Having completed a common +12% increase, we get the same sell signal as all prior Higher Lows. Our target is Fibonacci 0.5 (TP = 4.315%), highly likely on course for contact with the 1D MA50.
Prior idea:
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US 10Y TREASURY: at overbought sideFed Chair Powell's speech after the FOMC meeting, held on Wednesday significantly moved the markets during the second half of the previous week. A “higher for longer” wording used by FOMC members was not welcomed by the market. Fed Chair Powell mentioned another rate hike till the end of this year, with an expected rate cut somewhere during the end of the next year. FOMC projected reference rates to end 2024 at 5.1%. Such projections implied immediate market reaction and 10Y yields reached their highest levels since 2007 and level of 4.50%. Yields are ending the week at a level of 4.43%.
RSI index reached a clear overbought side, which would in the case of 10Y yields, mean that the market had priced in new information received from Fed Chair Powell. There will be another rate hike till the end of this year, and a level of 4.5% has been priced. From now on, it could be expected some relaxation in the yields, which might return slowly to the level of 4.3% in the coming period. The level of uncertainty is currently increased on the market, but at this moment, further move beyond 4.5% level should not be expected.
Multi-year highs for US 10Y yieldThe Federal Reserve's hawkish stance has led to a significant rise in US Treasury yields, reaching levels not seen in several years. This has, in turn, bolstered the US Dollar while putting pressure on US stock markets.
Later this week, investors will closely monitor the release of US core PCE data, seeking additional insights into the country's inflation trends.
In the short term, with the recent breakthrough above levels last observed in 2008, our primary focus remains on the upside, particularly towards the psychologically significant 5.00 mark and the 2006 peak at 5.25.
Looking further ahead, we've used the width of the downward channel as a basis for measuring potential future gains. This analysis points to a longer-term target approaching 6.00."
Who's ready for a FRED 50 Trillion Balance Sheet? I Am.
Japan has no completely lost control of their bond yields.
Japan has completely lost control the US Yield Curve Control.
The FRED paused (as I expected they had no choice).
The FRED realizing they need to initiate YCC / QE / Rate Cuts before end of 2023 or we're going to see an economic meltdown.
Option 1, let yields raise > mortgages blow up > bank collateral blows up bail out 100 Trillion.
Option 2, start YCC / QE / Rate Cuts down > things don't blow up but spend 50 Trillion.
What's hilarious is there is ZERO news coverage on this ZERO, the USA setup a YCC facility with the BOJ to patch bond yields yet the JAPANESE currency CANNOT handle it and the BOJ is starting to actually panic / tap out.
People waiting for a "country" to enact the third world war, I'll give you a hint they always start when some major financial system breaks. That's this this is where we are at.
Japan has a GDP of only 4.941 Trillion, if they initiate more YCC / QE they will start to turn into the Turkish Lira and then mass people are going to panic about US bonds.
THERE IS ZERO chance we get to 2025 without a FRED balance sheet of over at least 30 Trillion, buckle up.