Treasuries
TLT: Go long above Brexit resistanceWe have a nice double bottom in TLT. We can speculate on going long on a break above the Brexit key level resistance at 134.42.
Good luck!
Ivan Labrie.
Long Opp HappeningLong term trend up indicated by the 89 day simple moving average over the 89 week moving average.
Short term price action creating a great trading opportunity to go with the trend.
Fractal momentum is reaching a maximum to the negative.
Fractal acceleration is about to turn positive.
We are waiting and watching for entry signal.
TLT: Time to scoop treasuriesWhen most people are fearing an asset bubble in treasuries, and after increasing fears of rising yields, with many doomsayers calling for the end of this 'bubble', and a rapid selloff, it's clear that $TLT has found support, and that we can take the long side if it breaks last week's high. An integral part in any portfolio, $CEF, and $TLT.
See my previous $TLT publications to have an idea of how effective the trading in bonds has been.
Good luck,
Ivan Labrie.
Rate hike indicator: the 3 month treasury The reason for Friday's massive market selling is said to be because of the Fed's message that the rate hike is coming.
Seems that it may just be broad market selling after a period of complacent low VIX and broader overvaluation.
For confirmation that the rate hike is coming I'll be watching the 3 month treasury rate closely for signs.
A move from .30 to .55 would seem reasonable over the next several months if we are to see 25 bps increase for 2016.
In 2015 the 0.25% rate increase was starting to be priced in by late October into early December.
The CME Fedwatch tool currently shows the futures are betting on 58% chance of rate hike by Dec.
Time To Sell BondsLooks like we're topping out here at the peak of a massive ascending wedge. HIGHLY likely we form a beautiful high test on the quarterly chart but I'm not going to wait around for that to happen.
Martin Armstrong's Socrates signaling major trend change to downside within TLT which confirms techs.
Trade Management:
First major area of support seems to be around 115-120. We'll likely breakout and retest that level, then head back up to test bottom of wedge before headin down to the 100~ area where we formed our major 2014 low.
Best guess is we bounce off of the 100~ area heading back up to the monthly 50/60 ema and 115-120ish level to form a right shoulder.
If/when we get that right shoulder we'll then break down to all time lows. If this occurs it is going to be due to massive instability within US Government. Probability of gov default will rise DRAMATICALLY and could likely occur.
Gold oversold intraday but continuing correction towards 1297The 1327 retracement level has been breached today following the sustained bounce in 10 year yields. Although the market is looking oversold intraday, I expect the correction to continue to potentially as low as 1297 before becoming attractive again from the long side.
I remain bullish on gold medium and long term (as I have been all year) with a year-end price target of $1400-1425 following a correction. In the short term over the coming quarter I would not be surprised to see gold contained within a 100 point range of $1300-1400, presenting an attractive risk/reward skew for longs.
US 10-yr yield Bearish Cypher, what it means for markets?About 5 days ago, I had pointed to the possible Bearish Cypher formation on the 10-yr treasury yield . The pattern stands completed today.
Point D = 1.499% = potential reversal zone (PRZ) has been tested. As per the pattern, we should be heading down from here. For related markets this means -
US stocks may be in for correction
USD/JPY rally could run out of steam if treasury yields slips from PRZ
US 10-yr treasury yield – Bearish Cypher set upThe hourly chart shows bullish price RSI divergence led to the recovery in the yield from the record low of 1.322%.
We also have a bearish cipher set up, courtesy of the recovery from record low.
Point D, which is the potential reversal zone, stands at 1.499%. This means the yield could turn lower from 1.499% or if the level is breached on the higher side on daily closing basis, we may be in for a rally to 1.59%.
Breach of 1.499% on the higher side appears likely if the non-farm payrolls report beats consensus estimates and wage growth numbers spike.
Otherwise, yield is more likely to reverse from Point D = 1.499%.
Treasuries/Gold Ratio 6/24/2016Watch the lines - this is the perception of long term Dollar value divided by Gold.
BTC, Gold, 10 year notes: UpdateAs I had explained in my previous post, it was likely to see an 'emotional high' in these instruments, followed by a sharp decline.
After this break down, all these instruments are at a major support level once again, and in sync too.
Notes:
I'd get out of shorts here and maybe flip long in a few days.
Gold:
It might have some more room to fall, but if it makes a higher daily high tomorrow, it is possible to see a rally.
If short, cover half and trail the stop to today's high after the close perhaps.
BTCUSD:
I went long with a small risk position, considering a 10% downside risk as worst case scenario. I used spot, have no stop, and no margin. I also bought ETH with a 20% downside tolerance here.
The plan is to capture the upside in BTC and ETH once they resume the weekly uptrends they are in, and avoid losses in a choppy enviroment in gold and notes. The trades have been good so far, so try to protect profits first.
We will see volatility, so it's good to be prepared.
Good luck!
Ivan Labrie.
BTCUSD, 10 year notes and Gold: Are they ready to fall again?This is a simple analytic piece on Gold, Bonds and Bitcoin. After the Fed meeting yesterday, the market clearly decided the fears of low rates and weak dollar were justified, with a very dovish Fed, and gold and 10 year notes rallied (and quickly chinese buyers followed suit in BTC).
The interesting part is that gold has yet again broken the recent highs, which like we were discussing in the 'Key Hidden Levels' chatroom, might be warning us that there is a Megaphone type pattern unfolding here, contrary to popular belief that this is a consolidation before a giant uptrend starts in Gold.
The gap up in ZN1! is really remarkable here as well, it might give way to a very strong topping pattern soon.
BTC has hit a monthly resistance, but is currently above it. I'm waiting for the month to close to more precisely determine when to short it (if at all). For now you could maybe trade shorter term long setups in it, although it might be dangerous in this climate.
The bottomline is, that for gold and 10 year notes to top, we needed mass hysteria to reach the boiling point and I think this might be it. We'll need confirmation to enter shorts, but if you're long, look to trail your stop or get out, that's my personal reccomendation. The same is true for BTC longs.
I'll update the chart once we get a good short setup in either of these instruments.
Cheers,
Ivan Labrie.
Great Short Opp Here!Futures are not for everyone. Futures trading involves financial risk of loss. Please consult your professional trading advisor before placing any trades.
Next Stop 4%TNX appears to have ended its 3 wave decline. If 3 hits the common 1.618 multiple of 1 expect TNX at 4.23 before its next significant correction, which will end above 3.0, the top of wave 1 and then likely equal the ascent of 1 for wave 5...
Long TNX, short bonds...
FINALLY! GOLD COMPLETES THE RISK-OFF *3* - !SHORT EQUITIES!Finally Gold completes the market risk-off 3 for rallying... we not have JPY, BONDS and GOLD all rallying - this completes the set of 3 -riskoff indicators, we are now in full bear mode for stock markets imo..
as you can tell from the US Treasuries and JPY, these riskoff assets have been gaining value for some time, gold has been lagging behind but today following a poor NFP print but STRONG Unemployment print.
IMO gold is rallying higher as the probability for a fed hike becomes higher since unemployment is their target measure along with inflation (and not NFP as some will believe).
with all 3 riskoff assets rallying this means there CANNOT be enough liquidity in the market to push risk assets (SPX/NAS100/DJ30) to new highs as well - its all but a 0 sum game - the liquidity to push JPY BONDS and GOLD higher MUST have come from risk assets.
I believe this will be the end of the modest bull run for equities #downwego probably starting next week.
A movement lower in equities at his point is well served - we have many high risk events coming up and i believe people will be getting out of risk and into safety starting next week given 1: fed on the 16th 2. brexit on the 23rd and also BOJ on the 16th (along with a slew of other Central banks also due to declare their monetary policy).
Given the above uncertainties/ Risks NOW seems a perfect time for investors to flee to safety and for the SPX to follow suit 5-10% lower in the coming weeks.
As per my previous articles this answers all of the questions, we now have enough uncertainty momentum to push gold UP and stocks down IMO.. the paradoxical bonds/jpy AND stocks higher will come to an end in the coming days with STOCKS selling off for at least 4 weeks.
PLease see the attached articles for more information.
#Dollar Showing Weakness, Intermediately OverboughtThe U.S. dollar went bid following rhetoric from Federal Reserve officials that a potential rate hike could occur in June, following hotter than expected inflation data.
However, after posting on pending technical weakness here, the dollar has retreated slightly over the last few days. Price action as traded neatly within a descending channel on the daily chart, and potential signals of another move downward are pending:
The daily RSI has broken through an indicator support level, and the stochastic indicator is signaling a highly overbought condition. If price price action continues to falter, a sell signal below 80 could trigger selling pressure.
The DMI is about to form a bearish convergence, which would indicated bearish price action will take over.
In order to regain upward momentum, the DXY would have to close above channel resistance near 95.66; 96.55 will be key resistance point in order to challenge 98. If selling pressure does occur, DXY will likely seek out 93.80 (50% fib retracement from current minor uptrend)
The long-term macro dollar theme continues to be deflationary. It is important to note, a spike in inflation has been a late cycle occurrence. Every U.S. recession since the mid-1950s has seen an increase in inflation (after previously declining).
We must also include that as the global economy continues to slow, global central banks will look to continue monetary easing this will at least support the greenback. Furthermore, as the U.S. economy rolls over, a deflationary spiral is expected to occur.
MacroView is still expecting the U.S. economy to reach recession between Q2-3 once final data revisions occur.
If you would like to know more about MacroView's products and services, please feel free to message us.
As always, comment and post charts. We love to talk markets!
Symmetric triangle on 10Y US TreasuriesJust about hitting a support level on the symmetric triangle.
Fundamentally, the global markets are going through a rough time this week, which could drive demand for haven assets such as 10Y treasuries, driving the price up to hit the resistance level of this triangle. I think that we will see a short-term move up to the resistance.
Look for breaks on both sides, however.
Treasuries/Gold Ratio 4/28/2016These lines help us see how quickly people are switching from Treasuries to Gold.
Notes keep fallingIf you caught this trade congrats...it's a nice move but it's time to trim some and pull down stops. If you missed this trade don't chase down here. Wait for another pullback. You can also take a look at the Bonds...they have yet to break down.
