2026 Annual Scenario Planner

After several years of persistent pressure, the bond market appears to be entering a transitional phase. Yields have risen substantially since 2020, and much of that adjustment now looks reflected in price. Rather than signaling a clean trend reversal, current conditions point to a period of consolidation as markets reassess growth, inflation, and policy expectations.

/

The scenario for 2026 is largely the mirror image of what we expect for risk assets—primarily equities, Bitcoin, and other intangibles. As the bottoms give way for those markets, an I-T (Multi weeks to months) trend is expected to break out for bonds. CT expects this sideways-to-bottoming phase in bonds to end within the next two to four weeks, followed by a rapid decline in interest rates over an intermediate-term window measured in weeks+. By definition, that implies a meaningful advance in bond prices.

This is a contrarian view. The majority is likely to interpret the coming leg higher in bond prices as the beginning of another secular bond bull market, similar to what followed the 2007–2008 financial crisis and ushered in the zero-interest-rate era. We do not share that view. Our work suggests this countertrend rally will retrace roughly 38% of the multi-year decline that began in 2020, not reverse it.

A peak in bond prices is expected to occur roughly in sync with a significant I-T low in equities. Based on our timing models, that window centers on mid-year—approximately June or July of 2026. From that point forward, the secular bear market in bonds is expected to reassert itself, aligning with the longer-term 36-year and 18-year bear market cycles.

Looking ahead from 2025, investors and traders should expect 2026 to be a more favorable year for active traders across all markets—not because trends will be easier, but because volatility will be higher and trends more changeable. Many participants will be repeatedly misled as sell-offs produce only partial retracements, while bond prices resume their broader bear-market behavior.

The 3-year and 6-year cycles last bottomed in 2024 and are not expected to bottom again until sometime in 2027–2028. Because we are operating within a bear-market framework, these cycles are due to crest, not trough—and importantly, to crest in a left-translated fashion. Even for those new to cycle analysis, this concept is straightforward: left-translated cycles peak early, fail to sustain momentum, and resolve lower. That behavior is consistent with a dominant larger bearish trend, not the birth of a new bull market.

What is bottoming now is the shorter-term cycle—the 45-week to 50-week cycle—and that cycle is the engine driving the advance expected in bond prices.

This hierarchy resolves the apparent contradiction. A tradable intermediate-term rally can and often does unfold inside a long-term secular bear market. The featured chart illustrates this clearly, showing intermediate-term 45-50 week cycle bottoming right at the apex of the unfolding triangle. That is occurring at the same time the 3-year cycle is past its midpoint and the 6-year cycle is approaching its own.

Trading ranges are trends in their own right, no less valid than ascending or descending channels. This is a distinction many investors and traders routinely forget.

What the price structure is saying at present is equivocal. What is not equivocal is that the coming year is shaping up to be a trader’s market, not an investor’s market. Is just not the current price structure that has been forming for the past six months but the rule of alternation suggest to expect something different. After a low volatility year trader’s should expect something different.

To make the equivocation point , from a structural standpoint, the rally that peaked in October fits cleanly as the (E) wave of a larger fourth-wave consolidation. That interpretation aligns precisely with our volatility model, which has been signaling “trend-ready” conditions since late 2025.

This point is critical: A post-triangle move is not the start of a new secular trend.
It is terminal. Accordingly, any break from the current range should unfold with a high rate of change and decisive directional follow-through. The sideways phase is ending.

One of the dominant themes for at least the first half of the year will be the battle between inflation and deflation — specifically, which tail risk ultimately asserts itself. Disinflation, the comfortable middle ground, is increasingly unlikely. Commodity markets are breaking higher, and they are doing so without the support of crude oil, which has slipped back below $60 a barrel. That matters.

Crude oil represents roughly a quarter to a third of most broad commodity indices. When commodities break out despite oil weakness, it is not a mixed signal — it is a strongly bullish inflation signal. It means inflationary pressure is broadening beneath the surface rather than being driven by a single energy spike. In other words, the market is tipping its hand: the inflationary outcome is asserting itself.

Against that backdrop, bonds are no longer in a state of ambiguity. As this compression resolves, there are only two viable outcomes.

Either stocks fall hard and bonds rally. This would represent a counter-trend, flight-to-safety move—terminal in nature. It would complete the triangle in bonds and be followed by a continuation of the secular bear market into the 18 year cycle low.

If stocks and bonds fall together, this is the more dangerous outcome. It signals credit stress and rising cross-asset correlation — the hallmark of a systemic phase shift.

In bond terms, however, it would represent the terminal move of the secular bear market in bonds that began at the 2020 high.

Structurally, this would take the form of a post-triangle thrust lower (see the above chart,) driving bond prices decisively below par. That terminal decline would then set the stage for a powerful reflexive rally, similar in character — though not in policy outcome — to the bond market rally that followed the 2008–2009 financial crisis as authorities attempted to stabilize systemic stress.

The distinction is critical. That rally would be a response to crisis in the equity markets, not the foundation of a new long-term bull market. Structural inflation, fiscal dominance, and altered policy constraints mean interest rates are not returning to zero. The era of secularly falling rates is over.

There are certain little rules and triggers that we keep to ourself. So while the major astrological event it is being used for timing is clear to everyone that is the Saturn lunar Neptune conjunct that began already in August. It's really a matter of what the trigger is and that astro event strongly suggest that the market tips its hand by the second week of 2026. By that point, the equity market should be clearly trending lower, while bonds break out of their triangle to the upside in response.

That sequence matters. We are positioning for the first-tier risk—a risk-off move led by equity weakness and a flight into bonds. The second-tier risk follows later, as the system overreacts to the first move. One overreaction will give way to another. The deflationary tail risk.

As always, it’s not a question of direction.
It’s a question of timing.

Contrary Thinker insuring your future in the global equity markets.

Great and many thanks,
Jack F. Cahn, CMT+
MarketMap™ 2025 Scenario Planner
Contrary Thinker™ since 1989

Copyright 1989-2025

All-inclusive analytical method: Astrological and Historical Cycles, Advanced Technical Analysis, Traditional EWT, Volatility modeling, Contrarian sentiment modeling. All empirically tested with technical methods hard coded and tested for validity.

Contrary Thinker
1775 E Palm Canyon Drive, Suite 110- box 176
Palm Springs, CA 92264 USA
760-459-4681

OR

25/1 Poinsettia Court
Mooloolaba, QLD Australia 4557
614-2811-9889

-- Contrary Thinker does not assume the risk of its client’s trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

-- Client subscribers are responsible for keeping their payment details up to date and cancellations via the payment gate.

-- Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice at any time. Digital products are not returnable or refundable.

-- Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options.