Long-Term View: The bull market has very little time left

247Bull.com Editor: There is one thing that could break the S&P 500 (and other major stock market averages) out of their long-term secular decline, and that’s massive inflation. And, as we have pointed out recently, we are likely getting nearer to the time when inflation begins to manifest, and it could do so in a big way. Therefore in the years ahead stocks are likely to be heading higher, possibly much higher (at least in nominal terms).

At month end we like to look at the monthly chart to refresh our long-term view of the market.

The outstanding feature on the chart is the trading range between about 750 and 1550. Two bull markets have ended their run at the top of the range, and the current bull is only about 150 points below that long-term resistance.

A long-term chart of the S&P 500 index – 1990 to 2012 – (Click on the chart for a larger version)

A bit more subtle is the current PMO (Price Momentum Oscillator) pattern. Note how it resembles the PMO patterns around the two previous major tops. This pattern plus the approach of price to long-term resistance, leads us to believe that the bull market has very little time left.

Carl Swenlin | DecisionPoint.com

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