I closed all long Bund/short BTP spreads earlier last week as weekly chart was reaching key resistance at +200 bps. Weekly haDelta signals possible start of consolidation. Given the daily Heikin-Ashi setup and MACD, it is possible that we'll see more pull back towards 170 bps+ support. At/below 180 bps spread we have to start looking for buy signal again, and...
when stocks crash usually money parks in stocks , we really will not see anyone rushing to Italian government here as the trust levels are just not there, we will get there but not for some time. Retail participation is also at all time lows, with danger on the public side with smart money selling bonds and running to equities . we are looking at government debt...
After some noisy consolidation period in the daily Kumo cloud, Italian BTP is under selling pressure again. Obvious buy signals on both weekly and daily time frames now in favour of German Bund. Wise to keep long Bund vs short BTP, as spread is likely to blow up to minimum 195-200 bps. While holding short German Bobl is probably a good idea too. Note: I need...
This spread trade was one of the best setups in 2016. As we have more signals now that ECB will also normalise rates, it is time to review which one can be a better short: German Bund, or Italian BTP? Fundamentally it is not a question. Italy has a huge and ever increasing debt, absolutely impossible to scale down, especially not until they are EUR zone members....
Weekly: Not much change, bullish consolidation right below key resistance zone of 1,35-1,40 Daily: - Bullish Kumo breakout? Forward Ichimoku structure (both spot and forward components) has bullish bias. Note that both Kijun Sen and 100wma point up! - Minor pull back seems to be over. Couldn't even reach 127-130 bps support. It looks like Mr. Market doesn't...
Weekly: - Ichimoku setup is not yet bullish until the spread level can not break above Kijun. - Resistance zone of 1,36 - 1,41 % marked by Kijun and horizontal lines held again. We saw only a temporary push to 140 bps. - Heikin-Ashi signal suggests loss of momentum, possible start of retracement. - Key support is around 123 bps (means Italy 10y bond yield 1,23 %...
These charts show the Italian 10y BTP bond yield over German 10y Bund yield, as a spread. If ECB can not cause any more spread compression in Italy and in EUR periferia bonds in general, then what would? Simply look at the left side. Weekly chart start to look horrible. I see a huge bowl, which will soon start to boil! Ichimoku setup is turning towards bullish....