The problem of differentiating between a new bull market and a bull phase of an existing bull market can apply to any market: When a stock, index or commodity has a bull market then a bear market then another "bull" market, but with a much shallower trend than the first bull market, can that new "bull" market be regarded as a true bull market when although it makes higher peaks and higher troughs, the trend line drawn through the troughs is invalid because it penetrates price bars if extended backward in time?

The problem of differentiating between a new bull market and a bull phase of an existing bull market can apply to any market: When a stock, index or commodity has a bull market then a bear market then another "bull" market, but with a much shallower trend than the first bull market, can that new "bull" market be regarded as a true bull market when although it makes higher peaks and higher troughs, the trend line drawn through the troughs is invalid because it penetrates price bars if extended backward in time?

This is a long and complex question. Let's split it up a bit:

Firstly, the idea that trends lose momentum is a common one. It is dealt with by drawing shallower trend lines in a fan pattern. The big problem is that the breaking of these lines does not tell us much, although some people ascribe importance to the breaking of the third trend line. I see no logic to this, but there may be some basis in empirical studies I have not seen or perhaps in numerology, which I would reject as mumbo-jumbo.

Secondly, I think you are confused about this idea of a bull market. To define it you must go back far enough to find a clear bear market, so you can see where the bull market begins. I do not have the data, and it is not on your chart.

Also, you seem to be drawing your trend lines on a chart with a linear price scale. With a chart that has a large dynamic range like this, it is incorrect - you must use a semi-log chart. I have taken my 3 year bond data and drawn what I think are the trend lines for you:

The solid red line is the longest term trend line that can be drawn on this data. However, it is unsatisfactory, because we do not know where the trend began as set out earlier. It may be nonsense.

The blue dotted lines are trend lines for the major legs we can see of the primary uptrend. The green dotted lines are trend lines for the major secondary reactions we can see in the bull market.

I have not marked a blue dotted line for the latest leg of the primary bull market, because it is quite close to the long term line. However, if the long term line turns out to be spurious when we see more data, then we would have to draw in such a line.

The longer term data that I have for the 10 year bonds is yield, not price. However, here is the chart:

The issue I mentioned before about going back to 1974 may be relevant. However, I do not recall yields being higher than in 1982, but it was a long time ago.

Assuming 1982 is the start point, then the bull market trend line is the solid red line and the dotted red line is only an acceleration within it. The dotted red line is the long term line that should be drawn on your chart.

Now the line from 1990 could be quite important, because the bull market could end well before the major solid red trend line is broken. You are going to have to watch the peaks and troughs for that - the trend line, of course does not define trend - it only describes the rate of price change in the trend.

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