T-Bonds 1981-2016 Review

If we start back in 1981 we can see that T-Bonds started a rally that carried on for 35 years until it popped in 2016.  The first thing we see in this bull market are massive price swings in both directions. The waves in this bull market constantly overlap at critical times, which doesn’t allow clean impulse waves to form, except for very small degree sequences. 

These are not impulse waves, but you could force them into a 5th wave bull market. I counted the entire bull market as a Cycle degree 4th wave, which means that T-Bonds were in a huge 35 year bear market rally. This is about as close to a Fibonacci 34 years as we can get, and the only question is if the bonds are still going to add one more leg up?

Recent fundamental news had traders create a sell off, as the government drags its heels on tax reform.  As bonds decline this will keep the pressure on rates to go up.  Governments can only change rates when market forces allow them to do it.  We can already see that with the crash of the Fed Fund rates. 

Our present rally was also very choppy so that increases the odds of another leg down and not up.  At present, any rally was very choppy so the pressure could be for bonds to head down as well. 

In the long run, the wave pattern would be a 5th wave decline, so we have to wait and see, if the decline will be a better formed diagonal. Technically speaking, we should get 5 waves down in Primary degree, which is the opposite of the Primary degree 5 wave bull market I anticipate in the general stock markets.