US10Y is watching the world now...US10Y is watching the world now. The exchange rate is in the form of a downward correction and a double rising waveform. The bottom of the current correction is 3,013 The current waveform (BC) can be of a similar size to the predecessor first wave structure (0A). If the technical identification is correct, the (BC) wave structure target price is 3.289
Notes
bond are down trending but possibly oversoldCBOT:ZN1!
bonds are getting beat up and oversold. the world money system is based on these bonds as collateral, so unless the world will fall apart in turmoil, we must assume that investors will still be interested in lending to the US and buy bonds when oversold. I am specifically interested in the 10 year instead of the 5 year note or long term 20-30yr bond. The 10 year should be more attractive to all investors who seek yield, and the yield on the 10 is current very close to the 20-30 year bond, rewarding well for the time and also giving investors an exit if forced to hold the notes for the entire 10 year duration.
In my opinion, the trade I would take is to buy 10 year notes and build a position, and then look for a rise retracement of 50% of the down move, so somewhere around 124 on the note contract. low 120 to 124 area is 3-4% potential return before leverage factor in a few weeks to month potentially, if trade idea worked. no guarantee of course, but I'd still be long bonds, not some penny stock.
10 year note , are we looking at a short term correction?Normally movement in the price of oil leads a move in the price of the 10 year note. The blue line is USOIL and it showed me a change in behavior that I couldn't trade. So I looked for shorts in the notes after It made a high .
I am now expecting lower highs given how investors are long SPX after the dip
Rule 1 - Dont Buy GREEN barsDon't buy green bars just because you think its going to pump.
Entry at that arrow would not have reached the TP 50 points up.
Market reversed back down to support
Yield Curve Continues to FallAs investors price in lower inflation and increased expectations for a Fed rate hike, the yield curve (between the 30 year bond and the two year note) is continuously making new lows. Typically, the flattening or steepening of the yield curve is led by one end, but in this case, both appear to be contributing equally. This presents a problem for the Fed as raising rates (or more hawkish rhetoric) could hurl the yield curve closer to negative territory.
We can see the spread has been hugging the lower bound of the Kovach Reversals Indicator for some time, which is an extremely bearish sign. Also, the slope of the spread has become increasingly more negative.
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