Original subtitles

Welcome back folks.

This is less than 2.1.

Oh, January, 2017, 19 mentorship.

We teaching using tenure yields in our timeframe.

Now.

Okay.

Tenure notes in higher timeframe analysis, you can see here on the

right hand side, we have the seasonal tendency for the ten-year treasury note.

And I want to take a look at the seasonal tendency chart for a

minute and try to see where the most significant price swings occur.

And don't worry, we'll be able to zoom in in a moment, but you can see

primarily there is a January, February high that treat down to a June.

And then June low trading up into December's highs.

So there's two primary or dominant cycles in the seasonal for treasury notes.

And it's bearish for the first half of the year, and then bullish

for the second part of the year.

This teaching's going to give us an example of where that takes place.

And we're also going to see when the seasonal tendency

doesn't have an influence on.

The market.

And we're also going to see when the market actually performs adversely

or contrary to the seasonal tendency.

Okay.

Before we get into it, some quick notes for you when we chart the ten-year

treasury prices or the futures contract, when we're using bar chart.com.

When we chart the 10 year treasury yield.

We using investing.com.

Both of these websites are free and it's a quick notes for your treasury prices are

inverted yield as treasury prices drop.

That means the futures contract for the ten-year treasury notes.

When that price drops on the chart that shows a treasury yields increase

as treasury prices rise.

Treasury yields decline

as a general rule, thumb long-term funds seek yield.

That means money will be placed or allocated in areas at which

we'll will seek the majority or most return on investment.

Okay.

The dollar index has it relatively easy, or it can rally when the yields increase.

And this is seen when the futures contract prices drop on the 10 year

note and the dollar has its easiest or most opportune time to decline.

When yields decrease.

This has seen when a treasury futures price rise.

Okay here, we have a zoomed in seasonal tendency on a ten-year treasury note,

and I'll take your attention to the first portion of the seasonal tenants.

And he says in January to February, there's a high generally forums and it

trades down into around June or middle of the year and around June, July.

It's really like the last week of may.

Really, if you look at it, it's the last week of may and rolls into

the first week of July, usually it makes it seasonal low there.

And then the 10-year treasury notes usually rally the rest of the year.

Now, if we have this seasonal tendency on the underlying futures, contract

price, On the treasury prices.

This is not the yield.

The yield would be inverted.

Okay.

So in other words, if we're watching the June, July low and prices on

the tenure or rallying, that means interest rates are actually dropping.

So it's going to be an adverse effect or inverted, uh, effect on the yield.

If we see this occurring in the ten-year treasury.

We should be seeing what in the dollar index, if we could show a seasonal

tendency, which we happen to have one in the next slide, by the way, if we have

the dollar index as a seasonal tendency, should this be occurring at the same

time that we see the June, July rally, should that be occurring with a bullish

or bearish move in the dollar index?

Oh, here's that seasonal tenancy for a dollar.

And you can see around the January, February time, there's

usually a rally that takes place, which is contrary to what we saw

in the ten-year treasury notes.

Declining.

Now we have a significant high for me between June and July.

And then the dollar index typically trades down the rest of the year.

You're usually making a low around the last week of

October, first week of November.

And it creates a small little bounce on a November timeframe for the dollar index.

So the primary two trends in this market for the dollar that is in alignment

with the seasonal tendency seen in the tenure is there is a bearish tone to the

marketplace for the dollar index mid June.

To July.

And then we also see some rallying on the dollar index at the beginning

of the year, going into March.

Now there is a seasonal tendency for dollar to decline March into may, but

that would have to be in bear markets.

And in bullish markets, you could expect to see November be, uh, uh, by may.

Be a buy and January, be a buy in for dollar index and the sales

come in that March, June, July, and there's one in September, and then

usually creates some short, uh, pie in the latter portion of November.

Let's go back to the 10 year treasury note just for.

Okay.

You can see there's a strong contrast between the two.

And that means that we do have a high probability scenario for if

the 10 year treasury nodes are rallying and in the futures price.

That means that the yield.

What were you doing?

The opposite?

There'll be going down.

So interest rates will be dropping.

The interest rates are dropping.

That's going to cause the tendency for yield seeking traders or

investors to avoid the dollar index.

Because if the interest rates are dropping, that's not going to incite,

wanting to buy dollar-based assets.

So the reason why we're seeing this adverse effect here is

because there is a direct inverted relationship between the two.

So if we had this blending of these two markets, it gives

us a context to work with.

If we're gonna be looking for quarterly shifts in the marketplace.

Okay.

Here's the 10 year treasury note is the September contract of 2015.

And remember that we saw the seasonal tendency to form a low in

June, July, and a 10 year treasury note contract for September.

Cause you in symbols, name Z N U one five upper left-hand corner.

That U stands for the month of September.

That's the delivery contract or September.

You can see that the contract prices for treasury note prices

started to rally in June.

That means that the yields are going to be decreasing or declining, and that's

going to be bearish for the dollar and.

We see in June, July, we made a short-term high traded lower.

We violated the low in may.

And then look what happens between mid June into July and August.

The dollar index actually has a little bit of a rally at the same time.

September contract of treasury notes, tenure.

At the same time, the treasury notes were rallying with its seasonal tendency.

If we look at the dollar index, it was slightly bullish as well.

So when we see this scenario, we are looking at the likelihood.

If they're moving in tandem, that means we're actually going

to be in a large consultant.

That means it's not going to be a trending environment, most likely.

And that means we want to look for previous highs and previous

lows to be violated in back to the middle of the range.

You can see that was the effect here after July and August delete part of August.

We came all the way down and took out the may, June loads in the market, essentially

from the dollar index moot sideways

2016, September contract.

10-year treasury notes.

Again, we can see that last week of may going into June, that

seasonal tendency for a load of form for tenure treasury nodes.

Ten-year treasury notes, rally all up into July, and that should

give us a bear stance for the dollar index at the same time.

And as you see, we did have a bears decline in the last week of may going

into June and it gave one more lower, low, and a lighter portion of June.

But look what happens again.

We had the dollar index rally one more time.

And again, we'll go back to the previous slide.

So you can see the 10 year treasury note, see how it's slightly higher,

high, and going into July as well.

And then we saw that and we saw that one more higher high pushed into the

dollar index in the latter portion of.

Again, this is going to be an indication that the markets are

going to be in a large consolidation.

So think about what we've already shown here.

If the market's showing the tendency to be in a large consolidation, why?

Because both yield and.

10-year treasuries and the dollar are moving in the same direction.

If that occurs, what we're looking at is long-term in decisiveness.

And that means because both of them were moving in tandem.

The likelihood of a continued directional trade higher or lower

for either one is highly unlikely.

So we would be focusing on looking for stop raids or looking for if

the data range to look back and see previous highs and lows to be violated.

Um, both treasury and on the dollar index.

So if we're looking at this condition, what these dispose that does for foreign

currencies, it does several things.

Number one, it puts you in a long-term consolidation of foreign currencies

because the dollar is in consolidation and treasuries are in consolidation.

If we see times when the treasury market is.

Moving in at seasonal tendency and the dollar is supporting

that same seasonal tendency.

Then we have a strong probability of a directional long-term trend in that's

where the large funds placed their money.

When you get into the marketplace on those moves, you have these long

periods of many weeks, several months in terms of one directional bias moods

and all the words long-term trends.

Okay.

Our next example.

Now we're looking at the March contract of the ten-year treasury

notes for 2017, and I'm using this contract because it allows me to share

the data for the latter portion of 2016 and going into present trading

day, you can see here that treasury.

Market seasonal tendency to create a high in November.

And let's go back to that seasonal tendency just so you guys can see it.

Okay.

Here's the seasonal tendency.

Once again, for the 10 year treasury note, all the way to the far, right?

You can see that green line, that vertical line that most furthest to the right.

That furthest most right.

Green vertical line that delineates the beginning of the trading

for the March delivery contract.

You can see that that actually makes the high of the March contract and it

starts to trade off lower from that price point, that seasonal tendency

to create that high for March contract is going to be influential for us in

that next slide that we just looked at.

So here we are back again, that same.

10-year treasury notes slide for 2017 March contract.

Now we had the presidential election, obviously in 2016.

And what we're looking at is that high, that the election results

shown for Donald Trump, making our president elect at that time of vote.

The seasonal tendency for the March contract could create a high, you can

see that came into effect in November.

So while we're looking at the end of that uptrend for the seasonal tendency on the

10 year treasury note, we're looking at the beginning of a seasonal high, and

that gives us that movement going lower into the latter portions of December

in the SGC here that's transpired 2016.

If we see this occurring, Okay.

And it's now trending.

It's not in consolidation.

It's down trending for the ten-year treasury notes.

That's going to provide the opportunity for the dollar index to

do the opposite, but also do it in a fashion that's in a trending mode.

You can see it in Nova.

We had that same effect.

It's the opposite terms or the election shown this.

So off in the ten-year treasury notes that sell off shows an increase in interest

rates, which means there's going to be an interest to now buy dollar, because

it's going to be going higher as the 10 year treasury should dropping interest

rates are increasing, which means.

That there's going to be buyers.

That's going to be seeking yield by buying the dollar index and you can see

the market did in fact have a trending environment and trying to training higher

than creating short term loan December.

And then finally making this high in the first portion of,

uh, December of this year.

So the moral wall, this is that if we studied the ten-year treasury notes

and its price, It's either going to be moving in it seasonal tendency, or

if the dollar index moves in tandem with it, that suggests that we're

going to be in a larger consolidation.

If you look at all of the currency pairs that we.

Trade in the form of the British pound, the Euro dollar, those pairs

were in big consolidations all through the mid portion of 2016, that was

attributed to the consolidation that we saw in the ten-year treasury note.

And the dollar index, because you're basically moving in the

same direction, but they were range-bound, that's going to translate

into range-bound trading as well.

The only caveat is going to be until we solve the Brexit vote.

And that's obviously going to be the bank impact.

Uh, the latter portions of the summer months.

But prior to that, everything in the marketplace we saw was all

range-bound for currency trading.

So now one of the things I said about this month, it's going to be helpful to use.

When are you looking for a trade?

That's going to be explosive and trending.

When the 10 year treasury notes seasonal tendency is in effect, you

see it happening and it's supported with the contrary and price action

you see in a dollar index, as we described here, If they are not

showing that chances are we're going to be arranged bound consolidation.

And that means you're going to be focusing on very short term moves.

That means it's going to be high probability for short-term trades and

day trades and highly unlikely for longterm position trades long-term

position trades are going to be favorable and the conditions we

just shown here, when we see 10 year treasury notes, moving in trending.

That's going to put the dollar index into a trending environment.

Also, if we see the absence of the seasonal tendency, the strongest form

of the buy signal for ten-year treasury notes around June, July, if that's

not occurring, then we're going to be focusing on where the highs form

seasonally in the seasonal tendency for the 10 year treasury notes to get

ourselves in sync with the opposite scope.

In other words, just because the seasonal tendency is the strongest as it.

In June, July for a 10-year treasuries doesn't mean that when that is not

the case, because the markets are not always doing the same thing.

Every single time, we can focus primary being a bearish, a 10-year

note trader, which would give us the November high as we indicated here,

which lined up also for the seasonal tendency for our election this year.

So we're going to build on this model here in the next teaching

and until then, which good luck.