Bonds – The Sell of a Generation?

I still have a copy of the brilliant Dominion Securities Ames Trend & Cycle North American December 1983 Supplement authored by Ian Notley and Don Stark. That was when Notley & Stark proclaimed “the buy of a generation” on bonds. I quote, “VERY LONG TERM SECULAR UPTREND – Possible very long term secular uptrend originated in early 1982 and established its first bull phase into 1983. Final confirmation of a new secular uptrend would be given at the next cyclic bottom, expected to occur in late 1984, with the next bull phase top arising in 1986. According to Kondratieff Wave theory, the secular advance in bonds should persist through 2005!”

Well - with Notley & Stark not with us to-day we mortals are left to do our own long term work on the technical outlook for bonds. Our chart is a 55+ year plot – June 1960 to May 2015 - quarterly bars of the US 10y T-Note and I have overlaid a cycle measure smoother in order to get a very long term cycle count – which totals 5 which is a good Elliott Wave count for a complete secular bond bull (or secular yield bear).

I was on BNN’s Market Call last May 22 and blindsided host Michael Hainsworth with my “sell of a generation” call on the bonds – that would be a “buy of a generation” call on yields. Hainsworth politely brushed of my outburst and we went on to take calls. Can’t blame the guy – after all I am no Ian Notley..