Elliott Wave Analysis: 10 Year T-Notes Trapp In A CorrectionOn the 10 Year US Notes we see price undergoing a potential five wave drop, with price now trading in wave four as part of this drop. That said, price seems to be undergoing some slow and choppy price activity, which means wave four may unfold as more complex. As such we expect more overlapping price movement to come in play and probably a triangle correction will unfold.
Notes
T-note futures bearish, gap of supply achievedLarge oversupply of t-notes shown as a gap at 124.5, More space to the downside.
Gold will follow. Gold is also near supply level.
Elliott Wave BasicsHey traders. Here I have provided some notes of mine for the very basics of the Elliott Wave 5 wave structure. I am open to constructive criticism. All of this info is derived from the Elliott Wave Principle Book. Thanks Everyone.
FXCM Banned By CFTChe CFTC on Monday fined Forex Capital Markets, parent FXCM Holdings LLC and founding partners Dror Niv and William Ahdout to pay $7 million to settle charges it defrauded retail foreign exchange customers and engaging in false and misleading solicitations. As part of the settlement, FXCM agreed to withdraw its registration and never seek to register with the CFTC again, effectively banning it from operating in the US. The CFTC found the retail FX broker had an undisclosed interest in the market maker that consistently won the largest share of FXCM's trading volume, and was therefore taking positions opposite its retail customers.
www.zerohedge.com
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.
10 Year US Notes Reversing For A Temporary Correction10 year US notes fell in five waves from July highs so we can expect more weakness ahead which may drive stock market even higher. However, before continuation to the downside may continue on US treasuries we need a contra-trend reaction in three waves. Well, based on recent turn up we see price in wave a-circled of a three wave advance that may stop at former wave four, near 132'30.
www.ew-forecast.com
@ewforecast
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.
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.
NOTES are RipeThe Notes, like Goldie, are consolidating and ripe to break this week. We rolled to the June contract Friday and we are looking for a leas one more day of consolidation. We want to wait for a break of our levels before getting involved.
One and done!One target and stopped for us on the Notes. Looks like we were early on ti trade even though we believe lower note price are in the cards. We will keep our eye it...closely
Bond fireworks soon?The weekly chart on the Bonds is developing a signal. No matter what direction the wedge breaks we expect a 6-10 week move. Keep this chart front and center on computer.
Excuse me sir, can put that in reverse?Target #1 is in the books but there was a nasty reversal and it looks like the rest of our trade is in jeopardy. We will honor the stops.
Notes trigger shortThe Notes trigger short for us. We are keeping stops a little tight as rumors spread about the FED. Regardless of any rumors we will manage the trade like all others.
Notes are in the Zone!We are in the Trigger Zone on the Notes and will be watching short term time frames for a trigger short. If we get the trigger then our final target will be a break of the lower wedge. REMEMBER: NO TRIGGER, NO TRADE!
Did you get my Note? The Notes had a nice fake break and are now wanting to test the lower part of the wedge. The Bonds broke their weekly wedge and closed on their Friday lows which tells us the Notes and Bonds are weak. We are looking for a short position on bounces in the Trigger Zone. This is a Weekly chart trade and we will be looking for huge break down on the Notes. Remember...NO TRIGGER, NO TRADE!
Next Fin. Crisis?It's been more than 6 years since the last major financial crisis occured in 2008. If we assume financial crisis come out almost perodically in every 8 - 10 years then I think it's time to start thinking whether we are close to the next one.
10Y US treasury notes have always been preferred investment tool for non-risk takers regardless to the financial environment. But what about 2Yr treasury bonds? Can it tell us tell of something different?
So I looked at how the spread between 10Y and 2Y notes changes. I took the difference of 10Y and 2Y note yields (drawn in blue line) and looked how it changes with time. I marked with green circles where the spread is equal to 0 (10Y yield = 2Y yield) First 1990, second (little one) 1998, third 2000, fourth 2007. I'm sure you're very familiar with these years:) Before every major crisis 2Y note yield became equal to 10Y note yield. Why? Because smart money managers see the uncertainty and the approaching crisis in the market and move their money from short term bonds.
Up to this point maybe that was what you heard before. But can we predict the next crisis time? So when I drew 2Y note yield (red line), I noticed the 2Y note yields at the time of crisis are decreasing linear starting with 9,55% in 1990 and ending with 4,92% in 2007. (the green descending trend line) This confirms today's ongoing deflationary markets in all over the world. If we assume the trend will continue as it is, 3 - 3,5% would be most probably the next 2Y treasury note yield at the time of the next financial crisis. If we look at the FED rate history, we see the fund rate is pretty similar to the 2Y note yield. So did you recall the FED fund rate projections for the next years?? Most of the FED members project the fund rate will be around 3,5% at the end of 2017. Bingo! And also in 2017 we will have had 9 years after the last financial crisis. Be careful in 2017 if the spread of 10Y and 2Y notes yields close to each other..
www.federalreserve.gov
Come back....No entry for now. Bonds gapped down and didn't even get close to our entry area. We will watch for a bounce...below the zone we will continue to look short.
