Rates and bond yield will go back to nothing. History repeats itRates and bond yield will go back to nothing. History repeats itself
Banks will get good balance of so many holding long term lockdown in yield.
US02Y trade ideas
2 year yield drifting higher.The 2 year yield saw one of its biggest divergences from the Fed Fund rate during the banking collapse.
Now that the banks have settled the 2 year yield is closing the distance on the Fed Fund rate.
Recapturing the daily 200 MA is bullish for the short term yields.
This move up in yields could be signaling inflation starting to uptick as the economy & labour market remain robust.
2Yr & $TNX coming back hard & worrisome for #techLooking @ a few different #yields
(Not shown)Weekly 6month and 1Yr easier to notice BEAR FLAG & the pattern is close to being annulled.
Daily 2Yr looking good, breaking out of channel.
Hard to short dull market but seeing #bond yields climbing is worrisome for short term.
TVC:TNX 10Yr looks like 2Yr.
2 yr yield risingBanks reported profits, bank fears are gone, yields rising, lol.
Aside from my index futures indicators (which predicted a red day anyways), rising yields are causing the market to drop. The whole pump this week was about "disinflation", but yields were down on bank fears so now the reverse play, lol.
Gold and cryptos down along with everything besides financials, lol. Makes sense if you think about it, but not something I would have predicted.
These bond yield adjustments usually take a couple of days, so bearish for Monday
US02Y / US10Y vs SPX - Double top on SPXGood times until late 2023.
We might form a huge double top on the SPX.
At the tops, before 2000 + 2008 crash, the US02Y/US10Y had started to fall.
Right now it's still holding flat. We probably have a couple months before markets crash. Bull run until then.
What the fed is going to do with interest rates?Did we reach the peak? I don't think so, and even if we did, another little jump on the rate is probable
The 2 Year Rises Thoughts on the yield curve ?
Shall we stabilize from here (uninvert?)
Shy is the two year rising away from the other treasuries in the face of a slowing economy?
US02Y about to break its 1W MA50 and start a mega stock rally?The US02Y has been trading on its 1W MA50 (blue trend-line) for the past 4 weeks, closing above it on all occasions. This is a key time for (primarily) the stock market as the last time the US02Y broke and closed below its 1W MA50 (week of December 31 2018), a massive rally on stocks (which on this chart are portrayed by the S&P500 and the black trend-line) was initiated.
This was at the end of the U.S. - China trade war. The 1W RSI also shows that we are closer to that break-out than ever. Will a closing below the 1W MA50 give investors finally what they've been waiting for?
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04/04 Journal: US 2Yr Tue, 04/04 ~
2023 has printed a HH into LL @ gfib; a setup for reversal. Next wave should form LH. This should be btwn 4.361%-4.580%
Us govt reversed 2/3 of QT recently (hence recent downtrend) so could see weakness in 2yr over coming months
Rmb Bonds down, mkt up and vice versa
What’s next for Gold & S&P 500?Having covered Gold & the Equity Index last week, this week we will look at how we could leverage both to trade on the move we’re watching!
Quite a happening market we first covered Gold two weeks ago.
Firstly, the interest rates market had a sizeable correction, with the 10Y-2Y yield now trading at close to -0.45% instead of the -1% range just 3 weeks ago.
Secondly, with FOMC out of the way, we have some clarity on what the Fed thinks of the current bank contagion episode as well as how markets reacted to the Fed’s statement.
With all these in mind, one thing we want to point out is the relationship between yield curve inversions across the different tenures of the curve. Comparing the past 2 episodes of yield curve inversion on the shorter and longer end of the curve, we note a few things here.
Firstly, the 10Y-2Y inversion generally leads the 2Y-3M inversion. Secondly, the past 2 times when both sections of the curve were inverted, we saw a significant sell-off in equities happening soon after. Thirdly, the inversions also marked the start of the next leg up for gold.
With peak inversion likely to pass for the 10Y-2Y curve and 2Y-3M inversion at the all-time low now, we see some potential to buy Gold and sell Equity Indices, as we’re raised over the past 2 articles!
When we use the S&P500 Futures Contract and the Gold Futures contract to view the ratio of the S&P500 / Gold, this ‘Selling’ point becomes clearer!
With the past 2 periods falling 59% and 69% respectively and lasting more than 700 days, this trade could take a while to play out, but the risk to reward seems attractive.
As to the hypotheses of why this relationship might exist, it could reside in the idea that abrupt rate cuts likely merely take place in a time of financial distress, hence the selloff in equities and flight to safe-haven assets like gold. When rates fall off, the non-yielding assets like Gold would start to look more attractive to yield-hunting investors, which could have added fuel to the Gold rally, too.
Taking a conservative target of 35% lower from the current ratio level of 2, we position a short in the S&P 500 / Gold ratio by selling 1 S&P 500 Futures and buying 1 Gold Futures, at the current price of 1980 for CME April 2023Gold Futures (GCJ3) and 4010 for the CME June 2023 (ESM3 ) S&P 500 Futures, the notional value of the position for the long & short leg is almost equal at;
Long GCJ3: 1980*100 = 198,000
Short ESM3: 4010 * 50 = 200,500
Setting up such a spread trade requires some monitoring of the difference in notional value to ensure that the position is properly hedged. Each 0.25-point move in the ESM3 contract is equal to 12.5 USD while a 0.1-point move in the GCJ3 contract is equal to 10 USD. Trading this spread would be eligible for a margin offset of up to 70%, meaning that the capital required to set up this trade is much lower.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description.
Reference:
www.cmegroup.com
www.cmegroup.com
03/27Sun 03/27 ~
Got the rejection we were looking for off the “key” support and mkts pumped. Saw a HH into LL @ gfib; a setup for reversal. Next wave should form LH
Us govt reversed 2/3 of QT recently so could see weakness in 2yr over coming months
Rmb Bonds down, mkt up and vice versa
Assuming that the US02Y has peaked......Fed rate cuts should be dead ahead. This shows how the US02Y leads the Fed Funds Rate. Based upon this, should the Fed hike 25BPS this week - as it is (currently) expected to do - that hike should be the last unless the US02Y rises again.
Recession InboundMaybe we do get one more .25 out of this cycle, but surley the pause follows. The bottom of the markets shall be determined by earnings now...
this is the blow off topthats right guys, the whole damn thing is a blow off top! surpriseeeeeeeeeeee.
5.00% Target on 2yr Yield5.00% Target on 2yr Yield using simple trend analysis.
The Fed follows the two year, so once it hits 5%, the Fed will also stop tightening.
US02Y: BOND MELTDOWN / 4.00% CROSS / MACD CONVERGENCE / RSIDESCRIPTION: In the chart above I have provided a simple MACRO ANALYSIS on current bond market meltdown where the US02Y dropped nearly 25% within FIVE TRADING SESSIONS.
POINTS:
1. US02Y deviation is simple & marked at every 1% difference as bonds rise and fall within the same range percentage therefore it has a rubber band like price action relationship with it's lowest 1% points.
2. Overlapping Orange Line represents ES1! a US Market Future.
3. Dotted Green Lines represent continuous downward momentum in past Bear Markets (2002 & 2008).
4. Bubbles overlapping dotted green lines represent initial break of supporting bond percentage %.
IMO: In my opinion the most concerning factor to take into consideration when it comes to current bond positioning is the STEEP RISE IN PERCENTAGE especially when the overall US market momentum is tied to BOND PERCENTAGE during both RISES & FALLS & the STEEPER THE INCLINE THE STEEPER THE DECLINE can become.
MACD: Notice a complete meltdown of Bonds when MACD confirms convergence to MEDIAN & eventually breaks past median and falls into into negative territory.
RSI: Notice that unlike in other recessions RSI levels have seen more consistent exposure to MEDIAN of 50. But as of lately from a MACRO perspective that is not the case as we have seen current RSI levels linger around 70 or above in EXTREMELY OVERBOUGHT TERRITORY.
SCENARIO #1: In a very BEARISH scenario we come to see BONDS PERCENTAGE go through a complete free fall.
SCENARIO #2: In a less BEARISH scenario we come to see BONDS PERCENTAGE go through an extended consolidation phase with PERCENTAGE LINGERING ABOVE 4%.
FULL CHART LINK: www.tradingview.com
TVC:US02Y
US02Y is on a breaking point. Great news for stocks!The U.S. Government Bonds 2 YR Yield (US02Y) is testing its 1W MA50 (blue trend-line) for the first time since May 31 2021. The 1W RSI is on the very same Lower Highs trend-line rejection that it was during the December 17 2018 1W MA50 test!
Needless to say this shows that the price is on a critical point as when it broke in Dec 2018, a downtrend followed that was at the bottom of the U.S. - China trade war and sent stocks (black trend-line = S&P500) on a 1 year mega-rally (until the COVID crash).
Will we have a repeat?
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Bond Yield Drops 5% Causing - Gloomy Bank RunOkay by now you heard of the SVB Bank Run
--
The US Government Had To Step in
--
"To Save The day"
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To make it more ugly the bonds
have dropped by -5%
--
Only producing +4% per year.
--
Meanwhile the head of the US central bank
is planning to increase borrowing fees to 6%
--
that is 2% more than bond "cashflow"
--
Banks that Borrow from the US Central Bank
Using Bond "cashflow" are going RED!
--
This why you learning trend analysis
will help you
--
1-If you want to protect yourself
2-If you want to have a better advantage
3-If you want to learn how to trade well
--
Before the bond "cashflow was a cool
+4.5%
now it dropped to +4% as show in the chart above.
You need to learn the how to read the direction of the trend
--
study the above chart to see what happened on Monday
and how the indicators moved.
The 3 indicators used in the chart above
--
1)Momentum
2)DMI
3)Parabolic
find these indicators on the trading view platform
--
stay tuned for more information.
$TNX US02Y are CRATERING, Yields falling hardLast week we mentioned that #yields cratering like they did was not normal.
Currently they are all at support with $TNX holding better than short term yields. The 10Yr has BOUNCED a bit off support.
In a positive note it does lessens the inverted Yield curve :D
We'll see how this scenario holds.
What's happening today is more SPECULATION than anything else. The belief is that the #fed will stop raising rates due to the the bank closures that are happening.
IMO I don't think it'll stop them but MAY slow them down a bit.
The Fed Reserve HAS to pick between #economy & #stocks.
While the Fed has been friendly to equities and markets in the past its main concern in the US Economy. They also care about the US #dollar.
Will 2008+ repeat itself?Can 2008 be repeated? And the next fall in the financial markets? We will see in the coming weeks, but when the domino effect starts, it will be interesting
2 year yield plummetsThe 2 year yield has dropped below the Fed Funds rate. This appears to be the bond market pricing in an imminent Fed pivot.
DXY is now Risk On scenario now as banking sector gets crushed!Sharks are smelling blood in the banking sector and they are loading up to strike. Last week, we saw Silvergate Bank collapse and shortly after that, Silicon Valley bank (SVB).
Within 48 hours, 2 moderate size regional banks went under. Last Friday, several banks tanked at least 20% and few were halted due to massive shorting.
The house of cards are falling and this situation looks like a Lehman Brother's. Contagion will spread to vulnerable sectors such as housing and auto.
Jerome Powell wants to further increase interest rates, which will cause more destruction. Investors will be spooked and wanting to pull their money out of Dollar debt system and investments.
2 year US Treasury Bond yields dropped off the sky. With US national debt being so incredibly high at $32 Trillion and counting, US Treasuries are also no longer safe havens. Gold and Crypto perhaps?
DXY just broke new lows on Daily timeframe. The bear market rally is over I believe and with the catalyst of collapsing banking sector with its contagion expectations into other sectors, DXY is Risk On now, which is Bearish.
By Sifu Steve @ XeroAcademy
Looking for a wick off 4.14 then accumulating within the redExpecting a wick off the black line then accumulating within the redlines before moving up: CPI and fomc should see this play out.
