Simply put after a major bottom in a secular bear market like we saw last year typically the stock
market will rally back up and take back a good half to two-thirds of its losses and then stall out and go
sideways for at least 6-8 months. It then either breaks out and goes on another huge tear for a few
months or rolls over and begins another bear market.
I’ll show you the examples in a minute, but I want you to realize first what this means is that the
market is likely to put in a peak within the next few weeks (if it hasn’t already, it is possible) and then go
sideways for at least the first two quarters of this year. This sideways pattern will either mark a
consolidation phase within this current cyclical bull market that will be a prelude to another huge rally
or else will mark a stage three topping phase.
I
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