Not too many analysts will show you a 35 year bull market. I like to use the Fibonacci 34 year time period, even though it is a bit longer. This chart topped out on July, 6, 2016, but I called a top just one month after, on August, 20, 2016.
When we look at this T-Bond market, starting back in September 1981, What patterns stand out the most? Do we see any great looking impulse waves like what the book shows us? No, not at all! Those pretty idealized waves they show in the EWP blue book, don’t exist.
They don’t exist, and the main reason is that they all show nice and pretty waves all exactly the same length. Folks, this never happens at any degree level. I spent close to 20 years, counting waves, and I have “Never” seen a wave structure, like what they show us in the book.
What we have above is a wild and crazy set of diagonal waves, telling us that this entire bull market has traveled against the bigger trend. This Trillion Dollar crash should be just the tip of the iceberg, and there should be far more damage to come. When these T-Bonds continue to crash, then interest rates should go higher, forcing the Fed to do the same.
We’ve had major bond crashes before, but in a bullish phase, crashes always recovered and then retraced 100% of their declines. Now, and for the foreseeable future, any rally should be a false rally, and then get completely retraced, as it resumes the bearish trend.
A Trillion dollars went up in smoke, and I’m sure we will see many more fires as time goes on. They will have to put a supercharger on the printing press motor, as they can’t print the money fast enough to make up the trillions that will still get lost.