After making a major low in 1981, bonds entered a rising trend that lasted nearly 40 years. During that period, new rules and expectations were constructed and acquired that still influence decision making today — which is unfortunate, because the game has changed.
In 2022, the long-term rising trend line was broken, and the technical implication is that bonds will continue to trend downward for many years to come. That downtrend will not, however, proceed without some relief, and such a relief rally seems to be in the immediate future.
You will note that a falling wedge has formed, and the most likely resolution of that formation is an upside breakout. This is a long-term chart, so the rally will probably last for several months, during which time the rules and expectations of the now defunct 40-year rising trend will be reinforced, setting up the bulls for failure when the downtrend resumes. I should add the caveat that my conclusion depends upon this month’s price bar not making new lows. Nevertheless, a relief rally will ultimately take place, later if not sooner.
Conclusion: Bonds have broken a long-term rising trendline, and have entered a down trend that will probably last for years. Failing to recognize this change will be costly.
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