using bonds in intermarket analysis

foreigner

Est. 12480 Hours and Counting
Piper said:
Ever heard of cross currency analysis or the SMT?..... :eek:

Genius like,so the yield and a face value of a bond doesn't necessary correlate? Since you are so keen to quote ICT(he's great) I will also give you a quote of his:Know the asset class!!...

From now on i will refrain to giving responses to your posts.

Cheers,
Piper
AS ABOVE, what your stating has absolutely no use in yield analysis."like"
 

Alpha-Bet

Well-Known Member
I normally talk about bond correlation and such at dinner parties.
I try to sound intelligent..

Helps explain simple money making.
 

jack

Administrator
Staff member
foreigner said:
Well thanks for quoting me out of context JACK and then sharing information that is of no use in yield analysis, your blinding in-depth knowledge is invaluable Im sure, have you appeared on DAILYFX lately?!
I just went back and re-read a few posts and you're right, I did quote you out of context. My bad. :/

At first I thought you were arguing about a divergence in the relationship between bond price and yield, but instead, you were talking about divergences between USD bond yields and the yields of non-us foreign counterparts.. and that is exactly what this thread is about.

So I edited my post.

The info I pointed out is still useful for people grasping the basis.. so you didn't need to be so abrasive about it, but you were defending your post and yourself so I won't hold it against you. :p Plus, I had to laugh at the dailyfx comment. I too think that place is full of 'canned' useless info.
 
P

Piper

Guest
Yes it is very useful, since its explaining about the fondation of a bond,whats moving the whole thing.
Anyways, back to topic. Guys here talking about skill in determining about rallies and declines. Well no skill required. Simply some understanding of the asset class and brains. If you are comparing the three, then:
Lets say break in correlation, all three are heading down. The one that not failed(not diverged)is the strongest currency, wow i'm skillful.And by comparing slope angles you can get conclusions.
Eg: euro failed swing up, compared to the others, then the euro is the weakest, so it'll be the one the one that probably will be better for shorts,and the pound will be the long one. Quote from one of my chats with Shopster , a true master trader from this forum:
" The markets are simple, treat em as such"
 

foreigner

Est. 12480 Hours and Counting
In tribute to Author Tom Clancy who passed away yesterday, the Hunt for red October is on!

Heres the 30 yr yield, notice the US strength versus the UK weakness, meanwhile, cable failed to make a higher high today.

Coincedence? or is the smart money telling us somthing?? you decide. :eek:



Let me know if you think Im "reading" in to this too much.. lol
 

foreigner

Est. 12480 Hours and Counting
Divergence Divergence Divergence...

Divergence Divergence Divergence...

The story has changed since the start of Red October.

T note Vol and Open Interest increasing in Consolidation

T note Reduction In commercial longs.

Yield rising + FX falling

Seasonal Bullish Tendency

You Decide! :eek:







Addendum: Something doesnt add up for a trend continuation though, "can you see what it is yet?"



More Evidence Supporting Weakness Maybe?

 

shopster

Well-Known Member
Alpha-Bet said:
I normally talk about bond correlation and such at dinner parties.
I try to sound intelligent.

Helps explain simple money making.

snacking on retail is more fun.

s
 

Peterma

Well-Known Member
When ICT references USDX and Bond yields in his earlier videos he had a simple way of generalizing:

"Foreign currencies chase yield".

As all correlations change in the short term it's good to know how correlation is fairing if I am using breaks in same, e.g. cable and fibre - there is a good site for such info, given to us by ICT in one of his very old videos:

The company is MRCI (Moore Research) with lots of free info including their correlation tables.

Have a look at the current 30day number for USZ13(30y US) and DXZ13 ... -91

Thanks goes to ICT for this one :)
 

Peterma

Well-Known Member
Yeah, it's a good site , like I say ICT talks about them in his old videos - he uses them for their seasonal tendency analysis.

The correlation page is good now that it also includes the interactive charts showing vol and O.I.
I like to flick between the 30 day to the 180 day to tell me whether correlation is increasing or decreasing esp on BPZ13 and EUZ13 - before the charts arrived you just had to hover over the symbols, but they are easy enough to recognize after a while.
 

Tansen

Well-Known Member
Peterma said:
Yeah, it's a good site , like I say ICT talks about them in his old videos - he uses them for their seasonal tendency analysis.

The correlation page is good now that it also includes the interactive charts showing vol and O.I.
I like to flick between the 30 day to the 180 day to tell me whether correlation is increasing or decreasing esp on BPZ13 and EUZ13 - before the charts arrived you just had to hover over the symbols, but they are easy enough to recognize after a while.

oh it is moore's research yeah he's mentioned them a few times and there's an old 5,10,30yr seasonal tendencies chart kickin around.
 

aldion07

New Member
Peterma said:
Yeah, it's a good site , like I say ICT talks about them in his old videos - he uses them for their seasonal tendency analysis.

The correlation page is good now that it also includes the interactive charts showing vol and O.I.
I like to flick between the 30 day to the 180 day to tell me whether correlation is increasing or decreasing esp on BPZ13 and EUZ13 - before the charts arrived you just had to hover over the symbols, but they are easy enough to recognize after a while.
Hi Peterma!
I am new on this style of trading, and i think that i have watched all the ICT videos, but i don't remember if ict has explained about this page how does he use this details. I appreciate it if you give to me some indications about all this details and how do you use those. Or if ICT has explained do you remember in what video he talks about this page?
Thnx! :)
 

Peterma

Well-Known Member
Hi Aldion,

ICT referred to it as 'usdx triad divergence' or a breakdown in usdx,bonds10yr, 30yr ( I think were the three) - a heads up on longer charts of possible change ahead.

He referred to Moores as being a good for season tendency research, I doubt if the correlation page even existed back then.

Obviously he talks about correlation concepts in his smt divergence analysis and often the correlation between fibre and cable, but also the many other correlation between various crosses and asset classes that exist.

There was a time back, maybe about a year ago,that the correlation broke down between fibre and cable for about 8-10 wks, when that was happening he mentioned to use a different cross such as eur/gbp - the mrci page had already alerted to the break down, also alerted when correlation was back on track.

L. Williams spoke of the difficulty of trading without a system that has a 'A' and a 'B'.
The rule of logic, he said, was that you cannot predict the action of 'A' with 'A', i.e. predict price with price.
He argued the importance of introducing a 'B' in your analysis, thus, for example he suggested looking at the s&p and it's relationship (correlation) with the bond market, he had a little system which bought the s&p on a 14day break out of the bond market.

Do I use correlation? - yeah, my own little 'A' on 'A' system (based on ICT's Asian Session and that hard to spell word - equilib..... - was telling me to buy fibre Mon morning, it was also telling me to sell cable.
(caused by the higher high on Fri Asian Fibre, not replicated in cable )

That kept me out of those two on Mon, Tue was ok, back in sync.

Do I use the mrci page? - yep, I like learning and seeing changing correlations, I want to develop a good 'A' on 'B' system for shorter term trading - I know it may not be easy but I'm convinced it's doable.
 

foreigner

Est. 12480 Hours and Counting
Does anyone know if its possible to display a 240 minute T note chart on Barchart.com? or even better in Mt4?

I remember seeing a 240 minute barchart in Michael s video but cant get it to display properly..

Cheers and Good Trading
 

Peterma

Well-Known Member
Yep, Oanda have the bonds on their MT4 demo - I'm actually test running a version of L Williams's Willspread indi on the 10yr - I'm not a fan of indies, it just that this particular indi is based on the spread of a connected market, I can choose any market already on Oanda, in the Bonds I am testing Gold on the 5yr and the 10yr on the 30 yr - interesting.
 

foreigner

Est. 12480 Hours and Counting
Nice one Peter..

Ive added the T notes in the web platform but its not pulling through to MT4..

Also, does that indi alert when the spread increases to a given level? if so I have a similar one applied to GBPUSD called Barcolor.
 

Peterma

Well-Known Member
I opened an MT4 Oanda demo acc to get the bonds on MT4, must suss out that barcolor.

No alerts, Williams interprets it when it crosses the zero line, examples it often on the 30 min, he waits for the close of the next bar that caused the crossing - I'll dig up his book and quote what he says.

I'm experiment more on the indi's extremes.

Here's a current chart:
 

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