30yearmortgage — Trading Ideas on TradingView

30-Year Fixed Rate Mortgage Moving Higher 9% (1M)30-Year Fixed Rate Mortgage Monthly Well I guess I'm glad my mother-in-law's basement isn't a total dungeon.. What's sunlight? I'm familiar with grass because that's eye level when I'm looking out our window. Big brother JP, the head of the Fed, says rates aren't going anywhere any time soon, and we've all heard the fear mongering of 8% mortgages coming. Why would anyone want a house when you can load up on lumber and build a tiny home on your in-laws side lot? Life hack; build one in your parents backyard and you have a vacation home. Well lets all hold hands because the mongerers might be on to something. Chart / RSI / Momentum Rates previously pierced an important level of resistance (Red Solid) back in October and topped out just north of seven percent. Fast forward ten months and we're back retesting the same level, but this time we have a golden cross (Highlighted); a first on this chart. The RSI has also broken back above 70 level, indicating the strength of the trend to continue, and invalidating the previous bearish divergence (Teal Solid). After breaking past a previous level of significant resistance, Momentum has broken past it's previous peak (Teal Dotted) and continued it's trend higher; another indication of a strong trend. What Seems Legit? 30-Year rates crackin' nine percent because everything is signaling us higher. Chart Key Red Solid = Important Level of Resistance / Support Teal Solid = Divergences Teal Dotted = Momentum Level of Resistance Green Box = Resistance / Target Area Highlighter = Golden Cross / RSI 70 Level Break High

Inverted Yield Curve Starts in 2023 - Explained When the yield of the 3-month bond is higher than the 30-year bond yield, this is known as an inverted yield curve. It is a rare and unusual occurrence and we are seeing this today. This signals a potential economic recession in the future. An inverted yield curve suggests that investors have a pessimistic outlook for the future of the economy. They are willing to accept lower yields on long-term bonds because they anticipate a slowdown in economic growth. In contrast, they demand higher yields on short-term bonds because they expect the central bank to raise interest rates in response to inflationary pressures. An inverted yield curve can lead to a decrease in borrowing and lending activity, as it can make it more expensive for businesses and consumers to borrow money. This can result in a reduction in economic growth and can eventually lead to a recession. Some reference for traders: Micro Treasury Yields & Its Minimum Fluctuation Micro 2-Year Yield Futures Ticker: 2YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 5-Year Yield Futures Ticker: 5YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 10-Year Yield Futures Ticker: 10Y 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 30-Year Yield Futures Ticker: 30Y 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com

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Lumber and 30 year Mortgage Lumber and 30 year Mortgage – weekly scale: FRED 30 year rates lag most mortgage rates already above 5%. It has been since 2018 since rates were above 5% and lumber was sub 300.00. High priced lumber (any high priced commodity) will eventually correct itself. High prices cure high prices. Now the pinch is on and rates are reacting. Cost of money is no longer viewed as cheap. This could/should accelerate the cause and effect of high prices cure high prices. Support for lumber is the 800-820 area. Below look for the trend to remain down with continued support at 600 and the 460 area. Risk is 360-380

Inflation is plateauing and likely to end flat in 2023 Inflation is plateauing and likely to end flat in 2023, so what will that impact the markets? Though inflation peaked at 9% last year and has been declining to 6.4%, CPI seems to be plateauing and may close flat in 2023, but this is not good news at all. Why? Because the Fed wanted to see the CPI or inflation coming down to 2% in a sustained manner. Studying across the 2-, 5-, 10- and 30-years yield, we are seeing all the 4 yields almost breaking above its October 2022 all time high again. As long as the inflation remain flat at this current level, the Fed will continue its moderate rate hikes. Therefore, we are expecting more volatility ahead with a flat inflation number. This is definitely bad news for the stock investors, but not for the traders. Since 3rd week of 2022, I have exited from my long-term hold for the U.S. stock markets to trading the U.S. indices with much anticipated inflation and volatility. Also, trading into the Micro Yield Futures. Since it is on an uptrend, I prefer to focus mainly on buy on dip strategy. CME Micro Years Yield Futures Minimum fluctuation 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com

However you slice it, real estate doesn’t look good.While it might not be the subprime/GFC “SELL” kind of situation, the real estate sector is undoubtedly facing headwinds. With the most recent Fed’s preferred inflation measure, the Personal Consumption Expenditure (PCE) printing higher than consensus, maybe it’s about time we take the Fed’s hawkish commentary more seriously. To review, let us look at interest rate expectations from a month ago vs today. Market expectations are now pricing in three 25bps hikes instead of one, and more importantly no more rate cuts in the second half of 2023. This rise in rates expectation has notably resulted in sideways action for equities, while the dollar strengthens. What a difference a month makes! Mostly importantly, it’s not hard to see how higher rates will translate into higher mortgage rates. This is bad news for home buyers as borrowing becomes more and more unaffordable. In fact, higher mortgage rates have continued to weigh on the minds of Fed officials as underscored by the following statements in the latest Fed minutes, including “Participants agreed that activity in the housing market had continued to weaken, largely reflecting the increase in mortgage rates over the past year.” and “Participants agreed that cumulative policy firming to date had reduced demand in the most interest-rate-sensitive sectors of the economy, particularly housing.” Existing home sales are now at a 12-year low, surpassing the 2020 lows. Only 2 other periods post-GFC, saw a lower print, and it’s worth noting that mortgage rates during those periods were at the same level or lower. Home prices have also started to turn over, ending a 12-year run higher. Lower prices could indicate tepid demand in the housing market, which we will watch closely over the next few prints. And forward-looking indicators all seem to point towards contraction. With US Building permits and NAHB Housing Market Index slightly off the covid low, while the MBA Purchase Index close to the 7-year low. It does seem like however, we slice it, real estate looks pretty ugly now. One way to express the bearish view on real estate could be to use the CME E-Mini Real Estate Select Sector Futures which tracks the S&P Real Estate Select Sector Index. Looking at the sector futures alongside the 30-year Mortgage rates shows us the effect of the rising rates on the real estate sector. On the technical front, we see the sector future breaking the short-term support established since October 2022, while the longer-term trend seems to point downwards. Given our view that rates have further to go, negative home prices and sentiment measures across the board, and a technical break lower, we see the potential for the sector future to trade lower. We set our stops at 196, a previous resistance level, and the take-profit level at 163, with each 0.05 increment in the index equal to 12.5 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.federalreserve.gov

Four decades of downtrend has broken - Yield / Interest Rate All the fixed tenure yields have broken above their four decades of downtrend. - 2yr, 5yr, 10 yr & 30yr To note, the shorter end, the fixed 2 year tenure yield is climbing faster than the longer end, the U.S. fixed 30 year tenure government bond yield. The year closing, it will be crucial to determine the trend transition; from this long-term downtend to uptrend.

The yield curve has inverted, how to overcome this?Content: • Difference between interest rate and yield? • Why it is important to note of yield curve inversion? • How to tell when Yields are inverted? • What is the long-term trend for interest rates and yields • How to manage a rising yield? Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. 1. Difference between interest rate and yield? i. Interest rates are a benchmark for borrowers and ii. Yields are for lenders. For eg. investors to the U.S. government iii. Both interest rates and yields move in tandem together 3. Why is it important to note yield inversion? i. For eg. - when the return on a 30-years yield is lower than the 2-year yield, that indicates a ii. For lenders or investors – a pessimistic outlook, a reluctance to commit their money to the longer-term bond, they prefer short-term deposits as the market is unclear in the long-term. iii. For borrowers – most individuals or companies have shorter-term borrowing, for eg a 2 years fixed rate or a bridging loan. When the yields are inverted, suddenly they find them paying more on interest rates repayment. Since interest rates and yields move in tandem, expect the shorter-term lending rates to go higher. This will hurt companies and individuals who have higher leverage items on their books. If you are into shorter-term trading, do look into the market with live feed data. I am starting an inflation series, in the next video tutorial, we will discuss why inflation is happening not just in U.S. but all around the world. Micro 10 Years Yield Futures 0.001 = US$1 3.488 = 3488 x US$1 = US$3,488 3188 to 3488 = 300 x US$1 = US$300

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