Markets are notorious for exaggerated expectations. They sense a tiger when all they see is a cat. Expectations on rate cuts have been no different. Despite the Fed’s speak on measured changes to policy rates, markets got ahead of themselves since late last year. Markets are now starting to align their expectations with reality.
US economic data from January...
Happy Spooky Season boys and girls! Here is just a mock up of how I have been navigating Bitcoin. I am currently short term bullish and possibly long term bullish due to the season and recent price action across major indexes, commodities, the dollar, and Treasury yields. However that is remain to be seen and I will adjust my theses when necessary.
Cool side...
The Dollar and US treasury Yields are all showing signs of future strength leading to the FOMC meeting, as the EURUSD has slammed into Resistance with Bearish Divergence and PPO Confirmation, the Yields have hit a Shark PCZ with PPO Confirmation, and XAUUSD has once again hit the PCZ of a Bearish ABCD and will give us PPO Confirmation of a Type 2 Reversal once,...
The US10Y turned neutral on the 1D timeframe today (RSI = 51.795, MACD = 0.074, ADX = 33.857) after it got rejected on R1 two days ago. It is likely to see a sharp fall as on the March 2nd rejection, and in that case S1 and S2 won't pose any bullish pressure to the downtrend, nor should the 1D MA50 and 1D MA200, which in the past 12 months haven't had any such...
This is nothing new, really. People who have been in markets long enough know that when short term bond yields (3 month and 2 year, for example) come up to meet and invert to a higher yield than longer term bonds (like the 10 year, 30 year etc) that it often precedes a large market sell off as well as a recession that affects most everyone, not just stock...
This week, we thought it will be interesting to review the trade from last week given the reaction post-FOMC, as well as discuss an alternative way to set up this trade.
Firstly, let’s review the post-FOMC/employment data reaction.
- Nonfarm Payrolls surprised to the upside, as over half a million jobs were added way above the estimates of a sub 200K...
Those who have been reading our past 2 ideas will know we’ve been harping on and on about expected rate path and policy timelines. Why the recent obsession you ask? Because we think we’re on the cusp of major turning points.
So, for the third time, let’s look at the market’s expected policy rate path.
With FOMC coming up this week, we are expecting a 25bps...
The head and shoulders breakdown on the daily chart confirmed on July 18 opened doors for a roughly 70 basis points slide. That makes the 200-day moving average support, currently at 2.8%, pivotal.
This is a quite interesting chart showing a ratio (black trend-line) of the Interest Rate, 5Y Yield and Federal Debt trading within a Megaphone pattern since the 1990s. Its (Higher) Highs have naturally coincided with peaks in Rate Hikes (red trend-line). The last peak was on October 2018 and currently the ratio just broke within that range again (red...
The Japanese yen continues to lose ground, as USD/JPY has punched above the symbolic 130 line. In the North American session, USD/JPY is trading at 130.01 up 1.02% on the day.
The US dollar is having its way with the yen this week as USD/JPY has surged 2.23%. The driver behind the yen's plunge is an upswing in US Treasury yields. The 10-year yield rose from 2.84%...
I'v been tacking this Gartley for a while now and eager to post it but opted to wait until it got closer to the PCZ before i posted and now we are pretty much here; This could signal the end of Rising Treasury Yields and the beginning of a Recovery Period within Equities and Securities. I will be taking profit on my Yearly TLT PUTs and buying some Yearly CALLs next week.
XAG USD during the APAC session provided a nice bottom out and pullback from the daily 61.8% touch.
Our analysis yesterday was invalidated during time of posting due to the pullback not completing but testing the main demand highlighted below in the blue zone .
We saw a great order block build and the sellers reject with bullish pressure from the demand block ...
