We had a chance to transition into the parabolic bubble when the Nasdaq rocketed back to new highs in March. Unfortunately it didn’t hold. So now we are in the long term bull market scenario. After 24 months of going virtually straight up after the elections we need several months of consolidation before the next leg up can begin. Easy markets are usually followed by difficult markets, and vice versa. We had 24 months of easy. We need a few months of difficult. 1/3 of 24 months is roughly 6-7 months. We’ve been churning now for 3. We probably need to continue this for another 2-3 months before we start the next trending move that will take the Nasdaq to 10,000.
The fact that the SPX failed to break the February lows is a pretty dependable sign that the market has begun a large multi month triangle consolidation.