Most of the forecasts I hear relating to bonds appear to be based mostly upon what bonds have executed for many of the final 40 years, with out acknowledging what has occurred extra just lately. The chart beneath reveals that 30-Yr T-Bonds have been in a rising development from the 1982 low, however, in early 2020, they made a long-term high and commenced trending downward. That downtrend lasted lengthy sufficient for worth to violate the rising development line, which is powerful proof that the long-term development has now shifted downward. Technically, we must always anticipate that this downtrend will proceed for a very long time, most likely a long time.
The issue with long-term charts is that we get to assessment enormous segments of time with out experiencing the tedium of the traditional real-time market ebb and stream. For instance, whereas the value development from 1982 was primarily up, there have been intervals of a 12 months or extra when worth moved down or sideways, so despite the dominant downtrend, it’s possible that bonds will rally quickly, and that the rally might final for fairly some time. When that occurs, I warning in opposition to assuming that the long-term development is altering to up. Perhaps it’s, nevertheless it most likely is not.
Conclusion: It’s exhausting for individuals to desert funding strategies which have principally labored for 40 years, however it’s clear that the paradigm has shifted, and {that a} new method is critical.
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Useful DecisionPoint Hyperlinks:
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Worth Momentum Oscillator (PMO)
Swenlin Buying and selling Oscillators (STO-B and STO-V)
Carl Swenlin is a veteran technical analyst who has been actively engaged in market evaluation since 1981. A pioneer within the creation of on-line technical sources, he was president and founding father of DecisionPoint.com, one of many premier market timing and technical evaluation web sites on the internet. DecisionPoint focuses on inventory market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and weblog contributor.
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