To begin, I am not a Seasoned Trader; I use this blog for:
1. Record keeping; &
2. Formalizing my thoughts
a. If I can't explain simply here, I shldn't engage
To begin, my Rules of Engagement ( RoE ) to identify an upside of +3 to 1 Risk to Reward ( “R/R” ); in this case it may yield a 3.1- 3.94 R/R.
• Asset | IEF ( iShares 7-20 Year US Gov’t Bond )
• Type |...
This chart is an inverted chart of the IEF/LQD ratio with a SPX (SP500) overlay line chart Not Inverted . This shows the corrrelation to easing conditions and the S&P500. This is what the FOMC is failing at fighting. With QT and rate hikes, this has only had pullbacks. Jawboning too.
Order BUY IEF NASDAQ.NMS Stop 94.67 LMT 94.67 will be automatically canceled at 20230401 01:00:00 EST
IEF daily hammer wave 3 of wave 1 uptrend ABC correction is complete at the bottom of mean reversal channel
A slide from today's research report, published to clients yesterday evening:
Credit Spreads: US Treasuries (IEF ETF) vs Sub-Investment Grade Debt (JNK ETF): Credit spreads have remained subdued however traders should be monitoring the 1.08-1.09 level (pivot zone) for evidence of increased stress which may ultimately be reflected via further moves lower in the...
As you can see the inverted IEF/LQD is a great correlation to the SPX (SP500 market). Makes sense as the fed is failing to tighten financial conditions, actually LOOSENING them somehow. This not only sent equities racing up but also helped set up the conditions to invert the 10-2. The 10-3mo is close behind. Those are sending recession signals even if equities are...
This is an elliot wave count of IEF which is the long dated bonds and shows a roadmap for how the long bonds yield will drop below the short term bonds causing a yield curve inversion, signalling a recession (which is already well anticipated by now to those paying attention).
When bonds rally in wave 2 it will be violent and fast and will send yields down below...
US Treasuries (IEF ETF) vs Sub-Investment Grade Debt (JNK ETF): Credit spreads have remained subdued however traders should be monitoring the 1.08-1.09 level (pivot zone) for evidence of increased stress which may ultimately be reflected in the equity market.
The TIP / IEF ratio (reflecting relative strength of Treasury Inflation-Protected securities against T Bonds), having broken thru a declining long-term trend early in 2021, has now advanced to record an 8 year high. The Fed inflation narrative does not appear to be satisfying bond market participants.
In the chart below you have the TIP and IEF the IEF ratio. IEF is Ishares 7-10 year treasury bond ETF and TIP is the TIPs bond etf. On the right side of the chart you have the 10 year inflation breakeven. Now looking at the two you can see that they track pretty closely. Now generally the IEF 7-10 year has a very similar duration to that of the TIP etf.