US Treasury bonds

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

In these charts there are same multi-yearly spread indicators of previous post (30y vs. 2y; 20y vs. 2y; 10y vs. 2y; 5y vs. 2y), but in simple price-format.

Yield spreads price-progressions have impressive bullish-array, and they are strongly above previous tops; a sign of not confidence in the long-term US macro-economy ???


Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

In these two charts there are sub-yearly spread indicators in order to measure US-TBond yields (5y vs. 3mo; 2y vs. 3mo).
A decrease of both components can still to determine uptrend or down-trend of indicator, since the change of two components may have speeds (or slopes) very different.
A decline of indicator curves indicates a loss of power in the first component vs. second one, a rise indicates an increase in strength of the first components vs. second one.
These indicators are a useful (not quantitative) instruments for the evaluation of the components used, in relation to the underlying financial markets stress. It is more useful to look and analyze the general trend of the indicator curves and not pay attention on the price scale.
These indicators have contrarian behaviours to stocks-market price-evolution (as S&P1500 and Wilshire-5k) and are in daily ema-format, with S&P1500 as benchmark (daily-close) and with mid-term PPO below.

These curves shows a strong bearish-array, with positive implications on equity (outflow of cash from risk free assets toward more riskier assets).
These two curves shows high probability of new tops for stocks-market.
The prices of the spreads, however, shows a descending-cone gradually in closing, and a constant divergence between lows (ascending) of PPO and lows (descending) of price-curves; there is also a bullish sign on PPO of two curves (see lines).
We then see some warning signs for the second part of 2010-autumn; attention to the PPO zero-line.


Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

http://i52.tinypic.com/29p7lv7.jpg
http://i54.tinypic.com/qqohu9.jpg
I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

This curve is the sub-yearly spread indicators 6mo vs. 1mo yield.
A decrease of both components can still to determine uptrend or down-trend of indicator, since the change of two components may have speeds (or slopes) very different.
A decline of indicator curve indicates a loss of power in the first component vs. second one, a rise indicates an increase in strength of the first components vs. second one.
This indicator is a useful (not quantitative) instrument for the evaluation of the components used, in relation to the underlying financial markets stress (cash allocation in relation to sub-yearly stress). It is more useful to look and analyze the general trend of the indicator curves and not pay attention on the price scale.
This indicator has contrarian behaviour to stocks-market price-evolution (as S&P1500 and Wilshire-5k) and is in daily-close.

The descending-array of 2010 curve has positive effects on stocks-market in short-mid term.
The indicator shows now none financial stress.
Watch 0-line for a possible (but not final) zone of financial stress re-start.

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

http://research.stlouisfed.org/fred2...vintage=_&nd=_

I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

These two curves are the spread between ETF on US-TBond vs. ETF on global stocks-market (Bond/Equity-H.I.), in order to analyze (not quantitative) the cash-flow between gov.bonds vs. stocks.
A decrease of both components can still to determine uptrend or down-trend of indicator, since the change of two components may have speeds (or slopes) very different.
A decline of indicator curve indicates a loss of power in the first component vs. second one, a rise indicates an increase in strength of the first components vs. second one.
It is more useful to look and analyze the general trend of the indicator curves and not pay attention on the price scale.
This indicator has contrarian behaviour to stocks-market price-evolution (as S&P1500 and Wilshire-5k) and is in ema-format with two mid-term oscillator (PPO; RoC).

The second curve shows a double 2010 bottom, in positive divergence with S&P1500 descending 2010-tops; this sign is positive for global stocks-market.
Two oscillators shows a strong bearish-signal with rupture of their structural ascending-lines; moreover the oscillators shows descending 2010-lows vs. in-line 2010 lows of Bond/Equity-H.I.
For 1-3y frame this H.I. shows high strenght of equity vs. bonds and high probability of new S&P tops.

The III H.I. shows an ascending-array of 2010 lows, according to S&P1500 descending 2010-tops.
Two oscillators shows a strong bearish-signal with rupture of their structural ascending-lines; moreover the oscillators shows in-line (about) 2010-lows vs.ascending 2010 lows of H.I.
Also for mid-term frame, this H.I. shows high strenght of equity vs. bonds and high probability of new S&P tops.

The long-term H.I. (20+ years) shows same chart of the III.


Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

http://oi52.tinypic.com/ejvokn.jpg

HI ALL. Some notes about €-Bond spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

http://media.economist.com/images/20...1008EUC041.gif

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

The double curves of sx-chart (first chart) is the yield (US/gov.-TBonds) spread between 30y vs. 5y and 10y vs. 5y; the double curves of dx-chart is the yield spread between 10y vs. 3mo and 5y vs. 3mo.
With these curves we try to measure the cash allocation (from a US/gov.-TBond point of view) in order to assess confidence in riskier segments of financial markets.
The underlying stocks-market benchmarks are S&P1500 and Wilshire-5k.
Two curves of sx-chart have reached the highest since 1993, showing maximum distrust of the issuing country, from a long duration point of view.
This may be caused by lack of confidence in the long term (> 10y) into the financial markets in general, and specifically to the issuer.
This can be caused also by forecasts of inflationary pressures, over long periods, difficult to control.
Now the double curves is above previous 2002/2003 tops, with a little bearish phase during 2009 (fast stocks recovery) and a continuation bull of indicator during 2010 !
The double dx-chart curves shows a real outgoing stream of cash from the sub-annual (3 months) TBonds (violent yields acceleration) vs. 5y and 10y TBond.
This is a clear sign that the phase of mistrust on risk segments of the financial markets (started in 2008) is over from a medium-term view.
It's very interesting to note that despite "V"-2010 shape stocks-market, the outflow has continued without stop, consistently increasing the yield of sub-annuals vs. multi-annuals.
Now the double curves shows a short-term bullish turn (2010 II-III/quarters) and come from a historical double tops 2002 vs. 2009 !!!
The multi- vs. multi- annual spreads (sx) has shows a little bear during 2009 and a continuation bull during "V"-2010; the multi- vs. sub- annual spreads (dx) has shows a big bear during 2009 and now in bullish turn during II/III-2010.
The double chart structure is not positive in the short term (for stocks-market) from III-quarter start.
A new big-violent phase in confidence on risk segments of the financial markets there will be below orange zones.

On the two charts are visible dramatic structures of graphical contest in progress (valid only in theory) but that deserve to be briefly described.
On sx-chart there is a giant C&H, already upward validated, and in progress for the final pull-back.
Lows 2009 is the maximun extension of this bearish pull-back; if those lows were mets but respected, it would ensure a consistent bull for risk assets.
After the pull-back, the double curves would surely turn in structural-buy with cross of neck and upward sky-rocket, (2.0 spread-points upward ?).
This graphical model would the collapse of the financial markets structure, according to the indicator behavior in the past (similar to that already seen in 2000/2003).
Two graphical signs are in according to this model:
-) there is an important divergence among indicator key-lows 2000/2006/2007 and key-tops of SP1500, Wilshire-5k;
-) the indicator is the highest since 1993.
Dx-chart has a wonder bullish H&S vs. bearish multi-tops, with neck-area on double tops 2002/2009 and head-apex on 2006/2007 lows.
H&S target is 6.5 spread-points above neck, very disruptive to the stability of financial markets, according to this indicator.
Also on this indicator there is a significant divergence 2000/2006/2007, but at present, it was not renewed the top but only equaled.
Maximum bear-extension for a symmetric right shoulder is the 2002-low (orange area).
If the orange area will be properly broken in downside, there would be the cancellation of the symmetrical figure. But if the orange area will not be broken in downside, there would be a first bullish validation of H&S, which must then be completed on the neck-area.
Obviously these are a simplistic assumption of a purely graphic work but they are useful to consider.
On C&H time-target we can make the following speculations: examining (with a mirror method) the price-evolution of figure left side, there would be a period of the actual phase loading of about 12/24 months, with a time-target at 2011 for the start of the indicator sky-rocket.
On H&S time-target we can make the following speculations: the left shoulder took about 2.5 years in order to complete; the current right (in progress) shoulder, is symmetrical to left, will be completed in 30 months, right in the middle of 2011.


In the III chart, all the main US/gov.TBond yields were combined into a single simple algebraic curve (30y, 10y, 5y, 3m), in order to obtain a single spread-evaluator.
Some graphical signs are in according to the previous two charts:
-) the bear of single-curve spreads during 2010 did not go below 2002/2003 lows;
-) in 2009 the curve is on the top from 1993;
-) bullish H&S vs. bearish multi-tops, with symmetrical dx-shoulder inside orange-zone;
-) important divergence among indicator key-lows 2000/2006/2007 and key-tops of SP1500, Wilshire-5k;
With indicator below orange-area there would be the symmetrical H&S cancellation, with unbelievable cash flow to riskier assets.
But if the orange area will not be broken in downside, there would be a first bullish validation of H&S, which must then be completed on the neck-area.
But already close to the relevant 1994-top we watch the financial markets again under hysterical pressure on their stability; the validity of H&S would be very negative for the stability of financial markets, with a probable sky-rocket of curve of at least 12 spread-points.
Obviously also this is a simplistic assumption of a purely graphic work but it is useful to consider.
On H&S time-target we can make the following speculations: sx vs. dx shoulders symmetry project a time-target to 2011 (II-III quarters) for the re-start of the indicator sky-rocket.

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

In these two charts there are all the main US/gov.TBond yields were combined into a single simple algebraic "one-curves" (two algorythms), in order to obtain a single spread-evaluators (30y, 20y 10y, 5y, 2y, 1y, 6mo, 3mo).
The underlying stocks-market benchmarks are S&P1500 and Wilshire-5k (contrarian to indicator price-evolutions).
Some graphical signs are in according to the previous spread-charts:
-) ascending-array of two one-curves (see lines in chart I and red-markers in chart II); this is negative for financial stability in long term ???;
-) bearish-phase in 2010 not below the dotted (green or red) area, the key zone for hard relaxation phase in financial markets (by these indicators);
-) top from 1990 in IV-2009/I-2010 in divergence with stocks-market; this is negative for financial stability in medium-long term ???

Obviously also this is a simplistic assumption of a purely graphic work but it is useful to consider in order to study financial stability in long term.

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about €-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

These two charts (contrarian to stocks-market) are useful indicators for assessing the financial stress in the €-area.
The first is Loirs spread, useful in order to assessing the global financial condition of €-banks.
The second is the yield-spread between 10y vs. 3mo €-Gov.Bonds, in order to assessing the financial confidence toward €-area.

Loirs shows a very impressive bullish leg, started in oct.-nov.2010, with a relevant top now. A sign of decreased confidence in €-banks financial conditions.
The yield-spread shows high value of indicator and a bullish turn in building. A sign of re-start of confidence-loss in € financial markets.

If two indicators will be in continuation-bull, the European stocks-markets will experience a robust increase in financial stress.

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

Indicator in the chart shows the spread certificates of deposit vs. US-TBond yield at 3mo frame, in order to assess the financial confidence/stability at short term.
After a 2010 I-third top of indicator, this curve is in quiet phase and do not shows stress in the structure of underlying financial markets.

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about US-TBond yield spreads [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

First indicator in the chart shows the Fed founds vs. US-TBond yield 3mo spread, in order to assess the confidence/stability at short term inside US financial structure.
This curve is in quiet phase and do not shows stress in the structure of underlying financial markets.
The structure of this indicator has bullish-array from 1992, with ascending key-lows/tops (no good sign in medium-long term view).

Also the second indicator (an algorithm of Comm.papers vs. US-TBond yield 3mo) is in quiet phase (After a 2010 I-third top) and do not shows stress in the structure of underlying financial markets.
We can see an interesting sign in the comparation of 2003/2004 vs. 2009/2010 lows-base; a re-start for a new sky-rocket of indicator ???

Tuned on yield curves.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about Financial Stress Indicators [bad English, sorry http://cdn.forexfactory.com/images/icons/icon9.gif ]

Financial Markets Observatory Lab.

In this five-chart there is a short view of some important financial stress indicators (1, 5 are Fed indicators: contrarian to stocks-market prices; 2, 3, 4, as stocks-market prices).
These indicators shows a local divergence in 2010 key-levels vs. stocks-benchmark (see: MSCI world or S&P1500).
A continuation of this pattern is dangerous for stocks-market. An important pattern-break will cause a strong relaxation of stocks-market.
The main and secondary trends of stocks are in hard bullish-array.

Tuned on financial stress indicators.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

Sal.Vi,

As a someone new to treasury trading, what would you suggest reading to in order to better understand the US treasury market, trading, technical analysis?

Thanks

Hi Nova

My suggestion is to read the yield curves (multi-year bonds and intra-yearly bonds) on a historical basis, with comparative study with large stocks-benchmarck (world or US).
: )

HI ALL. Some notes about Financial Stress Indicators [bad English, sorry ]

Financial Markets Observatory Lab.

The yield spread (in log format) of certificate of deposit vs. Gov.Bond (frames: 3 mo) is a stress indicator for financial markets.
This curve shows the 0-line as a marker for the start of big financial stress increase.
Now the phase is quiet but the lines-array is the same of 1970/1980.
Alert on the 2010-tops of curve and on the ascending line-levels.

Tuned on financial stress indicators.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about Financial Stress Indicators [bad English, sorry ]

Financial Markets Observatory Lab.

The yield spread (in log format) of Gov.Bond (frames: 1-3-10 Y) vs. FF is a stress indicator for financial markets.
This curve shows:
an ascending array of main lines (not good sign for financial stability in the future but not signal);
the dotted-area is the max target of a simple technical recovery of bull-sboom 2008/2010; analogy of 1999/2001/2003 vs. 2008/2010/20?? is not a good sign (but not signal);
medium ascending lines in set-up with dotted-area is the main structural-pivot of this indicator for 2011.

Tuned on financial stress indicators.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about Financial Stress Indicators [bad English, sorry ]

Financial Markets Observatory Lab.

This curve compare the yield of corporate bonds (divided by rating) vs. 2y US-Gov.Bonds, in order to measure the financial stress of markets.
The curves (in different colors and in linear-format) shows that the markets are in recovery phase on the previous main top-lines (same colors).

This curves-array is not a good sign for the future of financial markets; only below their top-lines the curves shows a structural bull of underlying markets and not a simple recovery phase.

Tuned on financial stress indicators.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

HI ALL. Some notes about 30y US T-Bond yield [bad English, sorry ]

Financial Markets Observatory Lab.

Comparative chart between inverted 30y US T-Bond yield vs. S&P500 Index

http://dshort.com/charts/Kimble//201...ted-110120.gif
http://bigcharts.marketwatch.com/cha...063&mocktick=1

Tuned on financial stress indicators.
It is very important do not anticipate the main trend of the underlying financial instruments.

I.M.O. by $@!Ψ¥

#TNOTE / Daily / Three ideas

#TNOTE / Daily / Three Ideas

#TNOTE / Daily