Likely At or Near a Major High in Stocks

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I believe the current top being put in is likely to end this uptrend and most likely lead to a major decline that will qualify as a bear market. This pattern update above builds on the patterns suggested as likely/possible over the past year. See the prior post for a little longer term look.
Based off the similarity of the current leg up to the one prior to the November correction, this looks like a double combination pattern to me. Triple combinations are pretty rare so I think the end of this pattern will lead to a larger correction than any since November at a minimum, and given the larger pattern since the bear market lows, this will probably result in a larger correction than even the April-July 2010 correction.

As a first level of confirmation that this outlook may be correct, we should see the current decline be larger and faster than the November decline in the S&P 500. That would indicate a larger degree correction is occurring than the November decline.

The further this bull market has gone, the less likely from a historical perspective that any subsequent bear market will go lower than the 2009 lows. That would basically be a first in the history of the US markets. Now Japan did experience periodic bull markets in an overall long term deflationary bear market over the last 20 years. So if the US, or world, go through a major deflationary period, Japan would be the best precedent to look to.

As a general guideline right now, I would again suggest that increasing cash % in a portfolio is sensible if there is a well reasoned strategy to re-invest in the future at lower levels. Again commodities are overbought, so I would not personally suggest moving into gold, etc. I think that would be a mistake. Also, it appears that US treasuries are in a bear market now, so while there may be intermediate term rallies, I think on an investment level, that will not be the safehaven that many have come to expect.