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Treasuries

Forecast US 10 year treasury yieldThis is an attempt to forecast the yield on treasury notes based on technical analysis. Clearly this is an incomplete analysis as fundamentals will also impact heavily. So let us consider the following a base case. First, there are trends in the yield. I would not call it cycles because they have different duration. Those thends tend to last a longer time, more than six months. I use the average trend duration to make a forecast of the bottom. Second, Fibonacci is used to make a price projection. 38% retracement would mean going down to 2.5% (from 2.8% today). 62% retracement is 2.0%. The fall in yield will not be smooth and will have ups and downs (indicated by an ABC pattern from Elliott. but it could equally well be an 12345). Forecast: In July 2019 the yield will have fallen substantially. A good benchmark is 2.3%. The analysis is incomplete because it does not take explicit Fed action into account. A 10 year yield of 2.5% would invert the yield curve even without any further increase in the short term rate by the Fed.
TVC:US10YShort
by Mats000
US 10y Bond1) Due to the zig-zag nature of the yield values, historically, it seems proper to use Elliott-waves. 2) There was a rate-hike environment in the past which seems similar to the current price action. Coincidentally the wave 5 drop corresponds to the year 2020; 2020 is the year many talking heads are calling for a US recession. 3) In recent years bonds and stocks have rallied in tandem, however, which means a recession isn't necessarily the only way to arrive at the 5th wave. A powerful US economy and continuation of recent co-variance could also push yields lower. 4) I do not believe the well-establish downward trend will be broken, and lower yields are likely to exist post 2020.
TVC:US10YLong
by HyerQuality
The bond bear is not here yet.... use a log scaleThere have been a lot of talks of a bond bear market over the past year. That would be a big problem, but it's not here yet. The biggest problem is that too many chartists are using and circulating charts of trend resistance breaking in bonds that do not use log scales. I get that it seems intuitively dumb for a yield chart to use a log scale, but that's how this has traded for the better part of the last 20 years. Trade what is, not what you think should be. Turns out we haven't yet hit the top channel here, so we're not in a bond bear. It also turns out that touching the top channel occurred every time the fed quit hiking rates over the past 30 years, which preceded the last 3 recessions / bear markets by 1-2 months at least. Short term, we're in a rising wedge that the bond market has obeyed quite well. If we rise directly to the top of the channel, that would imply a May 2019 break of this uptrend and a recession / bear market starting around mid 2019 into 2020. Who knows how this actually plays out, but I know we haven't hit a true bond bear yet, and even when we do, it'll probably be far less exciting than people want to believe.
TVC:US10Y
by GTStockmaster
2
Clear Leading Diagonal - time for a pullback - then up, up, awayThe minute leading diagonal has clearly broken the larger downward wave, which ended in a larger ending diagonal... Expect a short term pullback to the wave iv level and then a continued rise at least 1.618 times the length of this first leading diagonal wave... Short term pullback would be consistent with a modest recovery in equities early next week before a larger sell-off in equities as the treasury rates resume their rise...
TLong
by broughro
Rising rates: Why is the 30 year yield so low? The 30 year treasury yield has traded under 3.25% for almost 4 years now. The Fed continues to hike rates on a quarterly basis and Trump is unhappy about rising rates. Every day we hear how the economy is 'in great shape', and jobs data is 'as good as it gets'. More significantly what is pushing up rates are increased treasury issuance and the Fed's accelerating Quantitative Tightening. So all in all why isn't the 30 year yield closer to 4% like it was only four years ago? For several years the market has priced in low expectations for the long term. The yield curve continues to flatten towards the lowest spreads since leading up to the great recession. (28 basis points on the 30-5 spread and 30 points on the 10-2 spread). At this rate the curve could flatten or invert in 6 to 12 months. An inverted yield curve historically is followed by economic recession. What's your thoughts?
TVC:US30Y
by dime
2
Bonds Remain IrrationalRegarding today's bond market behavior, I am reminded of the following words of wisdom mostly attributed to the economist John Maynard Keynes: "The market can remain irrational longer than you can remain solvent." From Trump's successful efforts in negotiating an end to a 70 year North/South Korean war, and denuclearization of NoKo, to the Fed raising interest rates hawkishly, to the ECB finally declaring an end to QE, everything seemed to support the bond market collapsing further. My original profit target in ZN1! was right about where the red arrow is. I anticipated it to retrace the entire move from the FOMC meeting. Perhaps it is because the bond market is historically bearish. Perhaps it is because big players are cashing out of their net short positions, or because insiders know something we don't, but US treasuries have stabilized and have formed a range, if not a bull flag. The Kovach Indicators (at the bottom) show a solid bullish trend, and we have broken numerous levels of resistance. Perhaps we need more data events like the Empire State Manufacturing Survey, or Consumer Sentiment tomorrow to help this sleeping giant awaken once more.
CBOT:ZN1!
by quantguy
4
US 10-year T-notes. Downside could be limited. Target corrected.This idea supports the previous interest rate outlook. I advise you to book profits on the idea given last September (see related) earlier than set target at 116'07 and this is why: The long-term trend together with the previous low offers strong support for the price and could reject the drop in the 117-118 area. In this area the wave C = 1.272 of wave A and this also fortifies the support. So better close shorts there.
T
by aibek
Short Squeeze for the Treasury bearsTypically I have seen that when everyone is on one side of the trade its quite easy for the market to make fools of the participants. The speculative short position on US treasuries, specifically the 10 year, is massive (and for good reason). While I remain a longer bear view on these treasuries I think we might end up seeing a short squeeze before we see 3% yields. The 10 year is showing some signs this could accelerate and hurt alot of bears who need to cover their positions.
T
by skyman9025
5 years treasuries in bullish flagthe course of the 5 years treasuries have rosen from 1.62$ to 2.60$. Even if the market expectations for higher interest rates are still active we can see a little consolidation on this level - which is the fib retracement 100. After the consolidation in this flag pattern we can expect a continuation of the rise to prices around 2.90$ (fib extension 1,272%). RSI: a little bit weaker but still in buy zone ADX: DI+ just turned to up, but low momentum conclusion: no change in trend, only some consolidation
FLong
by Luettis
USD interest rate growth could be limited by previous top.At the end of last September I called for the drop in the 10-year US T-notes with quite aggressive target (see related idea). In this and the next update I came to the thought that the drop could be over earlier as rates are reaching important resistance level. Despite the aggressive tone on the rate rise in US, I think the upside is limited based on this chart. Wave 5 of (C) already has reached the target zone and approaches the former top at the 3.04% where the wave 5 = 0.786 of waves 1-3. It is quite possible that when we would reach that area above 3 pct something in the economy could cry out - stop it! Let's see!
T
by aibek