Pattern Update

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Without going into too much detail, I think the most likely possibility at this point from a logic/pattern standpoint is that the move up since September has started a new pattern in the S&P 500. I believe it is most likely to be either a triangle or flat type pattern. In either case the high of this leg may be the high of this bull market before a bear market of sorts. The defining point will be whether any subsequent decline exceeds the Sept. lows on the downside. If so, then I think any new highs would be very unlikely. The pattern in the chart above is one logical possibility. But if any subsequent correction is rather small followed by a move to new highs, then that would not really fit with this idea.

Also since the market is at new highs now, there is no question that this move up is a leg up in a bull market. Now I don't have any hard stats on this, but from going through charts in the past the average leg up in a bull market lasts approximately 4 months. So at a little over two months this leg up may have some time to go. But from the sentiment data I would say that it probably is likely not to have much longer before at least a normal correction.