Joe Gun2Head Trade - US 10 Year Yield topping out?Trade Idea: US 10 Year Yield topping out?
Reasoning: Head and shoulders top on the hourly chart
Entry Level: 2.842
Take Profit Level: 2.617
Stop Loss: 2.922
Risk/Reward: 2.81:1
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US10Y
$AGG - US bonds ready for a bounce?I think we are quite close to seeing a bounce in US Bond ETF's. With the 10 year falling back under 3.0% and bond charts in general showing lots of divergency between price and indicators, i think we can get a bit of a bounce here. Also some good volume coming in on the AGG US bond etf which shows interest emerging.
DXY - CPI Data Day 💣Since it is a big day for the dollar it is only right we take a look at the DXY to get a better perspective on what we can expect.
I am in two minds - the daily chart would suggest we have an incomplete compression that needs to push higher to take out early sellers.
BUT
The four-hour charts suggests that breakout sellers have already been liquidated and that it may be time the buyers get a stop hunt.
What will happen is unclear but at least we have two scenarios we can work with depending on price action.
Keep this in the back of your mind during trading today and make your own judgement.
Waiting for the worst...In the chart we have the SPX versus the US10Y (US 10 Year Government Bonds Yeld Rate, in the blue line).
We are at a peak moment.
In principle, the rate in US10Y is inverse, that is, when it goes down, more people are buying — more people leave the stock market and buy government bonds.
The correlation with SPX is high in periods of extreme volatility, as shown in the circles.
Frighteningly, the US10Y is close to the same levels as March/2018 and October/2018.
If it drops like it did before, will we see a strong correction in global markets?
Analyzing the US10Y alone:
The US10Y has broken up a long bearish channel.
The RSI (Relative Strength Index) indicates an extremely stretched value, signaling a possible reversal to the downside.
On the weekly chart it is in a resistance test region, similar to the periods mentioned.
US10Y-US02Y Yields Are Steepening NOWAhead of incredibly important CPI data to be released tomorrow, we are seeing yields steepen in a very dramatic fashion. In comparison to each of the last 3 inversions, this one is not even close to the past.
It is important to understand that when yields steepen , it systematically leads to downside in the SPX/NASDAQ. It has been the indicator of almost every recession since 1980 .
Now we can't jump to conclusions just yet, we can only try to anticipate what comes next.
Tomorrow key CPI data gets released which is why markets are selling off in the face of it. This data will be the reason for the next move up or down.
Focusing back on the chart, we can see just how far yields have deviated from the 200MA. In comparison to the past, this is the farthest divergence on record.
IF yields were to retest that 200MA, it would almost certainly lead the markets down a very dark path rather quickly.
We are seeing a clear momentum gain on the RSI to match this.
Now let's take a look at the previous two inversions not shown in the chart; (2000, 2008)
First, take note of where the 200MA is here in comparison to now. Second, notice when yields are Steepening the SPX is falling. They have an inverse correlation.
Take a look at how extended the NASDAQ is still;
The same can be said about the SPX;
There are very significant moves being made in the markets at this moment, and it will take absolute diligence to ensure survivability if the markets take us down a dark path ahead.
For now, pay attention to the data tomorrow. If it is optimistic, we could see some short-term relief. If it is worse than anticipated, watch CLOSELY! The projected CPI tomorrow is 8.4% .
That's your best case going into tomorrow (April 12th) . Use it as a measure.
Possible top on 10Y US GOVT Yield? After yesterdays rally it could be that we have hit a possible top in the rise of 10Y Govt Bond Yield.
If this is correct it could signal a possible continued rally in more speculative investments.
If it breaks above and continues up this logic will be invalidated, and further downside to speculative assets may enroll.
Not financial advise, just an idea, I learn through doing
US 10Y Yield Nearing 3%I believe that watching the US10Y is a great way to gauge what's happening in the equity markets. As we've been witnessing, stock valuations are being compressed and investors are feeling the pain. I've been watching this chart for a while, and you can see that the 10-year Treasury yield is nearly at 3% and is at 4-year highs. This is something to definitely keep an eye on as we continue to see a hawkish fed. We could see a change in dynamic within the secular trend of the market if this scenario continues in this trajectory.
ICARUS , known to most as 2Y-10Y Yield ~ I am nicknaming the 2-10 year yield "Icarus".
Pushing back towards to the sun with haste it would seem .
Kind of interesting how this is off the media radar today .
Oh my wings! See my two wings! How I love to fly!
-The final words between: Icarus, and his father~
Why volatility is the king among all financial markets?With the usage of ATR, applied on the close of the daily candle, I have calculated the volatility channels for the daily TOP and BOTTOM.
Based on this logic, we can estimate, with a huge confidence factor, where the prices are going to be compressed for the trading day.
Having said that, lets take a look at the data gathered among the most important financial markets:
SPX
TOP CROSSES : 2116
BOT CROSSES : 1954
Total Daily Candles : 18908
Occurance ratio = 0.215
NDX
TOP CROSSES : 1212
BOT CROSSES : 1183
Total Daily Candles : 9386
Occurance ratio = 0.255
DIA
TOP CROSSES : 759
BOT CROSSES : 769
Total Daily Candles : 6109
Occurance ratio = 0.25
DXY
TOP CROSSES : 1597
BOT CROSSES : 1598
Total Daily Candles : 13156
Occurance ratio = 0.243
DAX
TOP CROSSES : 1878
BOT CROSSES : 1848
Total Daily Candles : 13155
Occurance ratio = 0.283
BTC USD
TOP CROSSES : 416
BOT CROSSES : 417
Total Daily Candles : 4290
Occurance ratio = 0.194
ETH USD
TOP CROSSES : 247
BOT CROSSES : 268
Total Daily Candles : 2452
Occurance ratio = 0.21
EUR USD
TOP CROSSES : 820
BOT CROSSES : 805
Total Daily Candles : 7489
Occurance ratio = 0.217
GOLD
TOP CROSSES : 1722
BOT CROSSES : 1569
Total Daily Candles : 13747
Occurance ratio = 0.239
USOIL
TOP CROSSES : 1077
BOT CROSSES : 1089
Total Daily Candles : 10231
Occurance ratio = 0.212
US 10Y
TOP CROSSES : 1302
BOT CROSSES : 1365
Total Daily Candles : 9075
Occurance ratio = 0.294
Based on this, we can assume with a very high confidence ( 70-80%) that the market is going to stay, within the range created from the BOT and TOP ATR points.
US 10 year yield, US 10Y The most important chart of all the markets is this little kid here.
This chart shows us the cost of US government borrowing which also means the strength of the US dollar as cash in the investors portfolio,
As we can see in this monthly graph that the government's 10-year borrowing yield is 3% (high going back to 2018 before COVID)
What is the meaning of this?
It means that the cash held by households, investors and institutions has reached its peak, as no one is buying and not investing and inflation has remained high and the Federal Reserve will target higher rates on the federal funds,
All this leads to increased risk appetite as bond yields may regress south + inflation starts to fall = real yield will approach 0% after being in negative territory.
The bear market will be over and risky assets like cryptocurrencies may welcome decent green days if not months.
*Note, if the 10-year US yield continues to rise to 5% and 6%, then we will see the euro, stocks, Japanese yen, as well as cryptocurrencies in the best place to buy them all
US10Y-US02Y Time To Pay AttentionEveryone is talking about yields inverting and the recession that follows it. Here I am going to do a quick rundown on how to actually use this information to your advantage.
It is not the yields INVERTING that is cause for concern. This is only the first step of a potentially long process. It is when yields start STEEPENING that there is real cause for concern.
There is no question that yields inverting is a recession signal, it has historically proven itself to be since the 1970s. But if you think the market is ready for a recession right at this moment of inversion, you are misinformed.
Pay close attention to when the yield first inverts, to where/when the market actually enters a recession. It is not until after yields STEEPEN is when there is real downside.
Now, this brings us to the chart, where we are potentially seeing the first signs of steepening. Not only from the yields themselves but from the Bullish Divergence on the RSI.
As yields have inverted (gone down), the RSI has trended up, showing a clear divergence. Also, notice how far yields have deviated from the 200MA.
If you compare it to 2000, it is potentially showing a very similar picture
Even in august of 2019 we see the same divergence which signaled yields to begin rising. Which told us it was really time to pay attention in the coming months.
These are just a few insights to hopefully help you understand what this all means in the bigger picture. Right now more than ever is the time to pay attention and to stay vigilant.
Hope this helps!
Here is my initial analysis on yields tightening, as well as the Yield Inversion in relation to the SPX:
US 10 YEAR BOND US 02 YEAR BOND US10YAlarm in the markets: a part of the US interest rate curve is inverted that has not been in 16 years
US five-year bond yields rose as much as 10 basis points to touch 2.64%, outperforming those on 30-year bonds.
Receive a cordial greeting, In Spain on 03/30/2022
Sincerely, L.E.D.
10 YEAR YIELD GOING HIGHER MOST LIKELYIn the current high inflation environment we are in and with the Rus-Ukr war pushing energy and other commodity prices higher and higher, we can all agree yields on bonds have every right to move way higher then we have been seeing the past few years.
The peak of the 'Tamper-Tantrums' back in November 2018 (Seen with black arrow) we can see the 10 year yield was higher than current levels. This was also when the fed wasn't that eager to release a 9 trillion dollar balance sheet back to market and when inflation levels were no where near what we are seeing (and feeling...) today.
I do think we could be seeing the 10Y yield trying those levels (hit a little over 3% during those times) in the upcoming weeks. I do think the market will be ahead of the Fed, and push it to move higher faster. We may even break the 3% level.. especially if there is a hyper-inflation panic.
Faster Bond movements could drag the market down (especially high flyers, tech stocks, etc) as e have seen in the recent past.
We had a 2y/10y inversion last week which could be a leading recession indicator. In any case, be sure it's the Bond markets that will be setting the tone.
Trade with caution :)