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US10Y-US02Y

How VIX follows SPXVIX is a measure of volatility. It takes the last 30 days of SPX, and measures it's variance. I would guess that VVIX does the exact same thing to VIX, it takes the recent 30 days of VIX, and measures it's variance. These two, along with SKEW are some of the methods investors calculate risk. I don't have the technical/financial knowledge on the ways investors can use risk management for better financial decisions. If we do some "magic" we can transform these notoriously unchartable indices. I am aware that since VIX takes the value of SPX, gets affected by both the volatility and the price of SPX. So technically from it's nature VIX tracks SPX. If, for example, we plot the chart (1-VIX) we will see the following: As we already know, he inverse of VIX follows SPX. Low volatility equals high SPX. The calculation logic of the chart is: Scale down VVIX such that it is in a similar scale to VIX. Then subtract one from the other. SPX is scaled down, after we divide it by M2SL. I would guess that from 2009 to 2019, the growth was sustained because VIX was consistently low. I also noticed that VVIX this year is incredibly low. One would expect that with such this year's recession that VVIX would also pick up the pace. During periods of very high volatility like the Great Recession, VVIX tracks VIX. Not this year however... As a fellow trader pointed out quite some time ago: Now VIX is higher and it's behavior with VVIX is very similar to 2008. We could say that the current situation is much similar to 2000 or with 1970s with stagflation and not 2008. Some things however, they smell foul. The elephant in the room maybe... SKEW is in an all-time low. This could encourage investors to over-expose. THAT is when crashes happen. Overexposing when liquidity is being dried up from the FED, is a recipe for disaster. Even if we grow from here and everyone wins, who will have the money to pay back all these winnings? Especially now, with everyone investing like crazy, over-leveraging and such. And if EVERYONE is buying, who is selling? "Buying the dip" is part of the equation... I believe that the bottom is NOT in yet. And since charting indirect stuff like VIX, like housing, yields, energy, all point to the same direction, I cannot ignore them. PS. The elephant is the collapsed worldwide-production-chain. The elephant is that we are one step away from war or famine. And maybe, just maybe, the elephant is long gone... we just don't know it yet. And we are talking about how the DOW will not fall. We are convinced that we are in the bottom and we are buying the dip. We are dreaming of more money quicker. Tread lightly, for this is hallowed ground. -Father Grigori I am not a trader, I am a father of a cat named Alyx. Don't take what I say as trading advice.
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by akikostas
Inverted yields and odd weeksThis chart shows the periods with inverted 10y2y yields. Usually inversion doesn't lead to recession, like 2008. However the similarities with 2000 are striking. 3 Years ago we had a brief yield inversion, like in 1998. Then a second inversion occurred, bringing prices down with it. The same happens now. Half of the bubble burst occurred with yields inverted. Therefore it isn't necessary for yields to normalize for us to drop. We are in a bubble and it probably has burst. And a less interesting part of the idea follows: Yesterday some uninteresting-number-of-weeks candles closed. It was fun checking out where we are and how RSI reacts. This has nothing to do with trading. I just love charts. I didn't bother with 1W chart because I consider it common. In the following charts SPX is analyzed. I could post them in a new idea but got bored... 2W - we couldn't escape the ribbon, and RSI is flirting with its EMA. It is a tad lower than 50. 3W - RSI below its EMA and below 50. 4W - A bull trap on the price appears. But we are above the ribbon (for now?). RSI just barely above 50. 6W - A bullish engulfing or something? And then an inverted hammer appears. Even though stochastic RSI reached the bottom, this doesn't mean that there is enough buildup to push RSI upwards. It takes two to dance/grow. Also EMA of RSI is helpful to me. RSI passing it provides me with an early signal of trend change. 9W - In this chart, the similarities to 2008 end. It resembles the .com bubble burst. It resembles the region just before the October 1998 rally. This one is less grim to the charts before. The candle however is a little mixed. 12W - Kinda bullish? I dunno... RSI made a higher low 18W - 2014-2022 stochastic RSI shows clear divergence. Stochastic producing lower highs, and with this candle it is confirmed. 36W - RSI and it's stochastic show a close similarity to September of 2000, the .com bubble burst. Finally, I will add this DJI chart showing us where we are in history. Let the drop commence I guess?
NASDAQ:NDX
by akikostas
3
Yield curve inversion cyclesUS10Y treasury yield minus US02Y treasury yield is an accurate predictor of impending economic recession. Here we compare the 10 Aug 2022 yield curve inversion low point to the low points in 2007 and 2000 that pre-dated the Great Recession and Dot Com stock market crashes. While a small inversion (below 0) does not always pre-date a recession, inversions as low as the current 10 Aug 2022 always have. Even more interesting is when you zoom in to the daily chart. Here we see the 10Y - 2Y moving back towards 0 from 10 Aug 2022 through 22 Aug 2022, even as stocks have begun to decline since release of the Fed minutes and recent commentary from Fed officials about the importance of continuing with additional rate hikes based on current inflation data.
TVC:US10Y
by theagileagent
5
the stagflation paradox. higher real rates + steepen yield curvehi there, dear fellow. we've recently stumbled upon this chart, in the quest for a leading gauge for the dxy. this chart depicts a paradox. in white, US10Y-USIRYY; in orange, US10Y-US02Y. if you remember our previous idea, namely on the DXY and the yield curve spread (US10Y-US02Y), we've pointed out back then that a steepening of the yield curve would be bearish for the DXY. well, now we just compared it with our gauge for the real rates, namely US10Y-USIRYY. what happens is, as it itself is on an extreme low in the last 20y+ (i haven't checked it beyond that, and it doesn't matter), it's likely to eventually revert to the mean. by the way, that's where the fed efforts are pointing to. that on itself is DXY bullish, untill and unless other CBs beat the fed in hawkishness, which is not the case by now. the recent tandem between both curves (since feb/21), suggests they're going up together, when and if. as for the orange curve, that should be dollar (DXY) bearish; as for the white on, bullish. who wins? the white one, for as higher real rates make more sense to be dollar bullish than it makes to be dollar bearish under a steepened yield curve. why? world wide higher inflation. in short, literally, DXY has a long way to go. our estimate is 2y+ of pain for stocks and cryptos, for as high and higher DXY is risk off for SPX and BTC. thank you.
TVC:US10YShort
by greenfield_br
3
Update on long duration bondsHello everybody! I wanted to make a quick update on where I think the 10y and 30y bonds will be headed in the next few months, as in the past, I've been talking quite a bit about deflation and a recession being close. We have seen TLT rise significantly, yet I think there is more upside. In the short term, I can see a further pullback, but in my honest opinion, the drop over the last two days was caused mainly by Pelosi visiting Taiwan and bonds getting overbought on lower timeframes. The 30y yields were rejected at the monthly pivot, while the 10y yields bounced at support and were denied at resistance. Yields are still in a short-term bearish trend, and there is no confirmation of a reversal yet, although the trend might have changed. It all depends on the situation between China and the US, as the more the tensions between those countries increase, the higher inflation will be, and therefore the higher rates will be. If China starts aggressively selling US bonds, this could create chaos in the funding markets. If the US starts banning Chinese imports or exports, the US bond market could explode, and yields go to the moon. This would force the Fed to step in and do unlimited QE / yield curve control. Essentially we are stuck in a scenario of mutually assured destruction here, and there is no way either one will come out as a winner in the short term. I believe that we are in a deflationary/disinflationary period, which could be disturbed at any moment if China invades Taiwan. The Russia/Ukraine war pushed inflation higher at a time when inflation was about to start slowing down, and a China/Taiwan war could push inflation higher at a time when inflation was about to slow down. TLT could quickly reach 125-135 in the next few months. However, I don't believe bond yields are going negative soon. It will be challenging for the market to have negative nominal yields when inflation is so high and at a time when the Fed might be forced to intervene and do YCC.
NASDAQ:TLT
by BitcoinMacro
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.
TVC:US10Y
by NoOneWhoIsSomeone
4
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:
TVC:US10Y
by NoOneWhoIsSomeone
Yield Curve Inversion + S&P500 strong retractionsChart showing lead time between the curve inversion and the start of the stock market crashes along the time. Longest lead time was around 760 days (+2 years) Shortest lead time was 4-5 months. Consider a 6 months as a rule for your readiness: - Build up cash reserves. - Partial sells of variable income equities (stocks, crypto, etc). - From 4-6 months forward, start buying OTM SP500 options, specially when VIX is on support levels. (Bear Put Spreads are also a viable alternative). Start of the crash, what to do: - When SP500 has fallen around 20-30% from its peak, start buying variable income equities (stocks, crypto, etc). - Sell your OTM put options - ALWAYS KEEP SOME CASH RESERVE!
TVC:US10Y
by FernandoHilario
Welcome to 2018 but way worseIt took less than a year for relative yields to do what took 5 years in the previous cycle. Last time it was gentle and made us fall asleep at the wheel. This time, it's forcefed down our throat and the economy will be dragged down by these companies who have made harmful malinvestiments for years with no recourse. Look at half the companies on the Russell with no profits, for example, and how "well" the index has done while they roll around in fresh fake money.
TVC:US10YShort
by fringe_chartist
One of the Most Important Charts You Will Ever SeeThe bond market often has an inverse relationship with the stock market since it is considered a 'risk off' asset. Bonds generally yield more interest for longer maturities. For example, a bond investor in a healthy economy would expect a greater yield for a 10 year treasury compared to a shorter duration. However, the yield curve can 'invert' (shorter term bond actually pays greater interest) when bond traders believe a recession is imminent. Since the Fed's reaction to a recession is to drop short-term rates to 0% and recessions cause 'risk on' assets like stocks to drop, the smart money will rotate from higher risk stocks (like tech, since it's future cash flows are highly sensitive to the cost of capital) and hide out in bonds to weather the storm and minimize downside risk. Yield inversion info: www.investopedia.com This chart shows the interest spread between 10 and 2 year treasuries in blue. Shaded vertical boxes show where the yield curve inverted in the past. The S&P is in red (at least I think it's red. I am color blind). Note how the shaded boxes start just prior to the dot.com peak, the GFC peak, and even the Covid recession. Currently the interest spread is heading back towards zero as the Fed is set to hike short-term rates to combat inflation, likely beginning in March. At it's current drop rate, the spread will invert in ~Q4 of this year, which means a recession is on the table for the first half of 2023. Keep checking back for updates as I will be watching this one VERY closely.
TVC:US10YShort
by HypnoticStrix
2
..an attempt to showcase the flatteningFlattening for the close. Getting a couple of questions re; flattening after the hints in previous idea, for those following 10s30s you will notice the test of 55/54bps is underway. ↳ The latest breakdown is implying we are at the minimum here in an ABC expectation leg towards support ↳ Inflation readings will be key to drive this one, this is signalling a dangerous environment for equities and risk in general going into September. ↳ To the other side, buyers will need to break through 11th May highs to call for reassessment in the flattening view.
TVC:US30YShort
by ridethepig
3
ridethepig | US10Y testing resistanceA timely update to the US10Y Yields chart as we approach key areas. The 1.35% pivot level in the very short term is our line in the sand and will define which battlefield we will play Q3 on. ↳ The waterfall lows from 2020 started the next five wave impulsive sequence to the topside, it will take years for the moves to unfold but critical to understand our long term direction (higher yields). ↳ Typically we will see ebb and flow, particularly in summer months. Now with 1.35% & 1.45% the key resistance areas defined and ready to monitor, all we need to track is for a sustained breach above as will imply buyers are in control and demand reassessment in the view that a base is already in . ↳ Here actively tracking for one more leg lower towards 1.00%, it should be enough to unlock the pressure valve in USD one more time before we see the next leg lower in global equity markets in October (more on this over the coming weeks). [/chart
TVC:US10YShort
by ridethepig
1
ridethepig | US10Y Market Commentary 2020.04.10An important chart update for all early and late cycle players, the lows in US10Y Yields are not yet locked and this is holding the window open for a final leg to the downside cooking in Global Equities and risk markets. A lot of buying interest in bonds towards 0.85 / 1.00 highs which will be enough to keep the downtrend in pay. I am looking for a full ABC completion from a strictly technical sense to complete the pattern. It will make things a lot easier for later in the year / into 2021 (and beyond). On the map a very simple area to track: Steel Resistance 0.89 <=> Strong Resistance 0.77 <=> Soft Resistance 0.69 <=> Mid-Point FLIP 0.6 0 <=> Soft Support 0.48 <=> Strong Support 0.39 <=> Steel Support 0.30 Thanks as usual for keeping the support coming with likes, comments, charts and etc... jump in with your questions and views!
TVC:US10YShort
by ridethepig
2
US10Y - US02Y -- Yield Curve Cycling LowerThis is a Weekly Chart of the US10Y yield minus the US02Y yield. (This composite is sometimes referred to as the Yield Curve and if the spread or difference goes below 0.000, then that phenomena is termed to as Yield Curve Inversion). This spread is widely followed worldwide as any number below or close to 0 tends to indicate impending slowdown in the US Economy, (which is the world's largest) and thus the most important. You will notice that the Yield Curve tends to cycle and that the initial low point, marked as Point 1, was in 1989; when the US Economy suffered a total collapse in domestic manufacturing and started to initiate the concept of outsourcing manufacturing, particularly semiconductor fabrication to Taiwan, heavy shipbuilding to South Korea and automobiles and domestic electronics to Japan. The fall of the Berlin Wall in 1990, which was joyfully called the "End of History" was when US Corporations found themselves in the unique situation of no longer having to give in to their workers demands for unionization and normal humane conditions; in order to pacify them and have them stop demanding the same work and social security conditions of their fellow workers within the Soviet system meant a boom till 1992. Those workers did not have a leg to stand on from 1990 onwards. Point 2 is the dot.com crash of 2000, Point 3 is the Great Financial Crisis or GFC and the collapse of the Mortgage Backed Security or MBS global housing market in 2006/07. These two events were frantic attempts to keep the US Reserve Currency system afloat as well as to inflate the US Stock Markets and keep failing corporations commercially viable. This was achieved by the total and absolute destruction of Iraqi Society and subsequently the total annihilation of Libya as a functioning sovereign nation, in order to keep the Petro-Dollar system concurrent. We are now approaching Point 4, which is a Currency Crisis and a collapse in the US Dollar or the USDX or DXY. This will lead to a massive convergence towards digital currencies and IMF/World Bank sponsored attempts to replace fiat. The question remains; will the debt burden of those same workers within capitalism be written off and if so, will that be initiated via a Bernie Sanders led Administration in the US before the situation gets totally out of hand.
TVC:US10YShort
by supratimbarman
4