The future of Interest RatesRough map pf rate expectation without pretension of accuracy for dates nor timing...
Yields
US10Y First 1D Golden Cross after 9 months formed!The U.S. Government Bonds 10 YR Yield (US10Y) is expanding the new Bullish Leg, and continues to follow the buy signal we gave on January 24 (see chart below):
The key development today is the formation of the first Golden Cross on the 1D time-frame in 9 months (since July 10 2023). This is a huge technical buy signal on its own and becomes even more so since it is so rare. The previous Golden Cross before July 2023 was on October 29 2021, which means that when the market forms this pattern, the price rallies aggressively.
That is exactly what we expect to happen now. A short-term pull-back to test the 1D MA50 (blue trend-line) similar to July 19 2023, is possible but as long as it holds, we expect our 5.000% Target to get hit relatively soon.
Beyond that, we need to see the previous Higher High breaking (similar to August 21 2023) to justify further buying. If that happens we will look for a new Higher High extension on the 1.618 Fibonacci extension level, approximately around 5.800%.
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Spy / Oil / Natural Gas - Market Analysis CPI comes in hotter than consensus.
IWM slaughtered / QQQ under pressure / SPY closes negative.
Yields & Dollar ripping.
Oil ripping / Natural Gas selloff.
Are we entering a new reflation trend?
Are Interest Rates going Higher?What would cause rates to move higher?
Inflation 2.0?
According to this long term yield chart were about to experience a paradigm shift in rates.
If this Monthly Golden cross occurs we should see a bull market in rates continue into the future.
This would not be a good sing for risk equites. The last time we got the opposite signal" Death cross" we saw a 30 year bond bull market/ 30 year bear yield market.
Maybe the traditional 60 equity/40 bond gets toppled. Maybe we move to a 40 equity/60 bond portfolio.
If This rotation was to occur, the stock market would likely see a significant loss.
Real yield in uptrendThe weekly real yield is in uptrend, which should act as support for the USDOLLAR and as a headwind for the risk markets.
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Past Performance is not an indicator of future results.
Interest Rates NOT showing cuts...Let's keep looking at #InterestRates. Gives us an idea of what the Fed may do.
The 1 & 2 Year are still under their RESISTANCE level. Struggling a bit, but not breaking down. Trend is still there, weak though.
10 Yr looks like it wants to break the resistance zone.
30 YR looks like it's gone. Does not look like it wants to retrace at the moment.
#FederalReserve TVC:TNX
Goldaholics Anonymous Pour yourself a glass of Goldschläger and let's review the 12 steps before diving into this.
1. We admitted that we were powerless over the Fed -- that our balance sheet had become unmanageable.
2. Came to believe that a Power greater than our central bank could restore us to solvency.
3. Made a decision to turn our fiat over to the care of sound money, as we understood it.
4. Made a searching and fearless inventory of our finances.
5. Admitted to Peter Schiff, Lyn Alden, and Pomp the exact nature of our wrongs.
6. Were entirely ready to have big, fat Gains.
7. Humbly asked to avoid getting short squeezed.
8. Made a list of all the naysayers about to be harmed.
9. Sent direct messages to them to gloat in victory.
10. Continued to count our gains and polish our bullion.
11. Sought through fundamental and technical analysis to improve our entries and exits.
12. Having had a financial awakening as the result of these steps, we tried to carry this message to other goldaholics, and practice these principles in all of our trades.
Macro Fibonacci
Below we can see the magic of Fibonacci extensions, measuring the last macro bull run to the 2016 low.
Zooming in a bit, it is clear that these levels attract attention. Each one of these fibs acts as a step in the staircase. All we need to do is look at volume and price action to validate each level. The smart money had their sell orders at the 0.618 Fibonacci extension. The 0.5 could not hold which indicates that the next level down will be tested. Watch for heavy volume to come in there near the 0.382 level.
In the U.S. stock market and many other developed financial markets, about 70-80 percent of overall trading volume is generated through algorithmic trading.
Historical Price Action
Looking back to the last bull run there are a few simple patterns to watch for...
1. Weekly MACD flailing around above the zero level.
2. Mark the down trends and wait for the break.
3. Price action is above the 20 Week EMA.
Trading Setup
Using historical price action the trading setup becomes clear...
1. Weekly MACD is flailing above the zero level.
2. The down trend line is clear. Wait for the break.
3. Wait for 20 Week EMA support.
Now, the targets are the Fibonacci levels above, and the ghost bars look reasonable, however, it would be wise to take a look at what exactly is driving Gold on this path.
The U.S. Dollar
The Dollar index inversely pressures Gold prices so this is worth noting.
1. Momentum is shifting bullish as a bullish MACD divergence reveals itself on the daily chart.
2. This recent move was the 3rd wave down which often precedes a reversal.
3. The index is at the bottom of this future channel.
As this index recovers back towards the 200 Week EMA, it will surely scare the metals market. However, the macro downtrend is only on it's first wave down. From a technical standpoint, the second wave is often the deepest as panic sets in from the failed recovery.
Treasury Yields
Yields recently had a similar bullish MACD divergence with a very weak recovery that followed. The trend is still clear and it's highly likely to roll over as it timidly approaches the trendline in the coming months. Gold has been riding along side Bonds so this should continue to drive up prices. Depending on the severity of falling yields, it could trigger temporary crashes in the metals. But longer term, buying the dips is the way to go.
Trading is risky. Don't do it.
Long
Bullion: Gold, Silver, Platinum
Equities: GDX, PHYS, CEF, SLV, RIO, SPPP
Futures: (Not yet)
US30Y yield back to New high (Bearish bond view)On the back of strong prices data which were not really consistent with the temporary relief in inflation but rather calling for a sustained trend.
US30Y is likely to revisit new high, breaking our
Rates not acting as if a cut is coming...Let's look at rates for a bit.
Short term #yield is slowly climbing the trend line.
1 & 2 Year.
Longer term #interestrates look similar to the short term.
10 & 30 Year.
US #Dollar not as strong as bond yields but it is trading similar to them.
TVC:TNX TVC:DXY
Bearish Yields Could Send USDollar LowerUS Yields have topped back in October 2023 with sharp leg down, which is from Elliott wave perspective first leg A of a deeper A-B-C decline that can send the price back to the former wave 4 area to 3.25% - 2.5%.
At the same time, we can see USdollar Index - DXY also turning down due to a positive correlation with Yields, we just saw some divergence in 2023.
Currently we can see some recovery for the USdollar, as Yields are in a corrective rally within wave B, but as soon as wave C shows up, USdollar can be back to bearish mode.
If we respect technical analysis, Elliott wave theory and positive correlation in the markets, then Yields could send USdollar - DXY lower away from important trendline connected from the highs soon.
US10Y Touched its 1D MA50. Time to rebound?The U.S. Government Bonds 10 YR Yield (US10Y) is expanding the new Bullish Leg, which we gave a buy signal on last time (January 24, see chart below):
Yesterday it touched the 1D MA50 (blue trend-line for the first time since the February 05 break-out. During the previous leg of the 1.5 year Channel Up, the 1D MA50 held all the way until the formation of the new Higher High.
As a result, we are bullish as long as it closes the 1D candles above it, with our 5.000% Target intact.
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IEF: Holding on to an Established Trendline at the 0.382 RetraceThe IEF (US 7-10 year Treasury ETF), has held on to the 0.382 Fibonacci Retrace aligning with a Long-term and Established Trend line and the 200-Month Simple Moving Average with high amounts of MACD Bullish Divergence and a move above the 0 line on the Oscillators. All of these factors point towards lower yields in the 7-10 Year Treasuries and an increase in par value on the bonds themselves. Bullish setups can also be found in other duration ETFs such as the TLT and SHY representing the 20 Year and the 1-3 Year Bonds.
I suspect that all this Bullishness on Bonds will come with the Uninverting of the Yield Curve, which may align in commodities blasting off much higher in the short term, but in the long term could result in the resetting of the Bullish Cycle in Equities and Commodities alike.
TLT: Piercing Line on the Quarterly Chart Signaling Lower YieldsTLT (The 20-Year US Treasury Bond ETF) has recently completed the measured move of the Ascending Broadening Wedge Breakdown and has now confirmed a Piercing Line on the 3-Month Chart while closing above the 0.886 Retrace. We can also see that the RSI has begun to break out of its downtrend and these combinations of variables seem to point towards the TLT reversing the overall downtrend which could lead to a major move up towards the 50-61.8% retraces between $130 and $143 this would come with bond yields falling off significantly and may also be a sign of investors seeking safer investments over the coming months.
Short-Term Bond Yields are Setting up for a Major CorrectionThe SHY ETF is an ETF that holds 1–3 Year US Treasury Bonds and as the yields have gone up this bond ETF has declined. However, in recent times it would seem that this ETF is now trying to confirm a Double Bottom with the test of the 21-week SMA, if it holds we could go p to about $85 which would put a lot of downwards pressure on the bond yields which should align with a decline in the US Dollar and a rise in the Australian Dollar. I suspect the move will be fast and short-lived, but dramatic all the same.
#SA10YGOVYIELDS looking to start a move back to top of range?The South African 10 year bond yield has found support off the intersection of the 200dma and the previous change of polarity point between 9.55%-9.65%. Momentum seems to be shifting up which could see us move back to the top of the range at around 11.16%.
US 20 Year Yield: Bearish Harami at Bearish Bat PCZThere is a Bearish Harami at the HOP level of a Bearish Bat with Impulsive RSI BAMM Confirmation. Alongside that, we also have 2 Major Squareups significantly below the current level and also an unfilled gap. If these Bearish Signals at the highs are to play along, this should be the start of an even greater retrace to fill the downside gap and to complete the square ups. This would likely come with some Bearishness in DXY and upside in the TLT which may also spillover into the IEF.
TLT: Double Bottom at the 0.382 Retrace with Bullish DivergenceSome weeks ago TLT was trading within a Falling Wedge and Double Bottoming at the 0.382 with Bullish Divergence on the Hourly Timeframe and from there rallied to hit its 0.618 Profit Target. Since then, it has come back down just below the level it started at but in doing so has yet again formed Bullish Divergence near the 0.382, this time on higher timeframes. If the TLT were to start bottoming here, it would potentially be the start of an even bigger double bottom than the last one and could result in TLT testing even higher upside retraces such as the 0.886-1.13 which would take it to around $100
CRE & Small Banks coincide with each otherSmall banks account for about 70% of #commercialrealestate.
Small #banks are considered those with assets less than $10B.
We've been bearish CRE for a long time. We believe that this sector will likely not get better anytime soon.
#interestrates are still holding fairly strong. They are at banking crisis levels or higher.
TVC:TNX
Treasury Yields look ripe for further movesCurrent state of the short and long term #Yield.
The 1Yr is underperforming against the 2Yr yield. However, it looks like it wants to push higher.
10Yr vs 30Yr
The 10Yr is performing lil better than 30 but.......
The 30Yr has a BULLISH short term crossing over longer term moving avg, RSI also looks strong. IMO yields are looking good. Seems like there is still treasury selling pressure.
/ZB (US 30-Year Futures): Holding onto Trend, Targeting 1.618The 30-Year Bond seems to have found support at the 89 EMA aligning with a trend line, it seems that demand for this maturity will pick up soon which would result in the 30-year Yield dropping to around 3.5%. I do however think this drop in yields will be temporary, but the move down in 30 year yields and the move up in the 30-Year Bond Futures will likely be parabolic until the 1.618 resistance is reached.
Looking at short & long term yieldsGood Morning Update
Looking at the short & long term Bond Yields.
Short term (3M & 6M) yields are trading above bank crisis levels.
The 1Yr & 2Yr #yield are underneath the crisis levels.
The 10Yr is currently at those levels & 30Yr is above said levels.
Makes one think....... How much longer can #banks support these levels?
CRYPTOCAP:BTC AMEX:GLD AMEX:SLV
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Digesting longer term data = 10 & 30Yr #yield.
Higher lows
Bullish moving average crossover > circles
Moving avgs trending higher
Forming small uptrend
2nd pic = WEEKLY
Back above previous uptrend
Trading under moving avgs
TVC:TNX #Gold #silver #BTC
SLV: Bullish Head and Shoulders and Piercing Line on the WeeklyThere is a Bullish Inverted Head and Shoulders with a Piercing Line on the potential Right Shoulder visible on the weekly timeframe above the 800-week EMA who's measured move would take it all the way up to the 1.272 Fibonacci Extension
if the pattern plays out.
The move up in SLV should be supported by the rising of the TLT and Falling of Yields (if that trend should continue).
I will be getting the ITM Calls, expiring April 19th.
Raising EURUSD Profit Target to $1.114 due to a Bullish CypherDue to the apparent formation of a Bullish Cypher on the Daily, combined with the Bullish Push as confirmation on the RSI, and the strong push push in price action above the 200-day SMA, I will be raising my profit target for the EURUSD to the 100% retrace up at $1.114 as the 100% retrace would be the standard target for a Cypher and the TLT has outperformed which is usually a signal for psoitive price action in the EURUSD.
