T-Bond 34 year Bull Market Review: Another “D” wave Top?

 

zbh17-dec-3-2016

 

When we look back to 1982  where this T-Bond bull market started, then we have close to a 34 year bull market already completed.  In reality the majority call it a bull market,  but when we take a critical look at the patterns of the last 34 years, then we can’t find a single set of 5 waves that I can call a pure impulse.  Some come close, but they are only seen in very small degree levels.

I had the entire bull market as a potential 4th wave top in Cycle degree, but this leaves the question of what type of a decline we could expect. Either way they were all very bullish on T-Bonds before the election.

There were so many areas that waves overlapped, which still looks like a big zigzag,  but I dropped down all the degree levels down by one degree.  Any “D” wave will work just like a 4th wave can, so using a “D” wave top can hold for a long time.  A “D” wave Primary Degree top would match the US dollar and Nikkei “D” wave tops of the same degree. When we have a choppy bull market like the T-Bonds had, then this is a sign of a market running against a bigger bearish trend. Depending on the degree, I would always expect a complete retracement of any “D” wave bull market.  The EWP book makes it very clear that large degree “D” waves are  bull traps.

A complete retracement would bring the T-Bonds down to the $55 price level, and if this ends up becoming true, then rates will be going up in the future.  Any “D” wave top is followed by an “E” wave decline, which should at least resemble another zigzag in Intermediate degree.  Any 3 wave decline in T-Bonds, would also match a potential 3 wave decline in the stock markets.

 I’m sure we will see some safe-haven seeking, bond buyers create T-Bond rallies, but any rally will not last, until we get close to an “A” wave bottom in Intermediate degree.  With a potential “E” wave decline, then we should see no more T-Bond record highs, but record lows would be created instead.