In January, I did a chart analysis of the markets suggesting that being overly optimistic going into 2015 could be dangerous.  

“As we enter into 2015, analyst calls for a continued “bull market” advance have never been louder. There have been a litany of articles written recently discussing how the stock market is set for a continued bull rally. The are some primary points that are common threads among each of these articles which are: 1) interest rates are low, 2) corporate profitability is high, and; 3) the Fed’s monetary programs continue to put a floor under stocks. The problem is that while I do not disagree with any of those points – they are all artificially influenced by outside factors. Interest rates are low because of the Federal Reserve’s actions, and corporate profitability is high due to accounting rule changes following the financial crisis. Lastly, the Fed’s liquidity program artificially inflated stock prices.

While the media continues to pound the table with all of the bullish arguments that should continue to drive the current advance in the markets, it is only prudent to at least attempt an understanding of the counter arguments. The “risk” to investors is not a continued rise in the financial markets, but the eventual reversion that will occur. Like Wyle E. Coyote, since most individuals only consider the “bull case,” as it creates a confirmation bias to support their “greed factor”, they never see the “cliff” until it is far to late.”

As we end the third quarter of the year, those warnings have come to pass. However, the debate that began this year remains – are we still within an ongoing multi-year bull market OR has the next cyclical bear market taken hold?

The series of charts below is designed to allow you to draw your own conclusions. I have only included commentary where necessary to clarify chart construction or analysis.