Shapes of Things to Come?

What worries you that some of your bullish ideas might be a little on the optimistic side? What in the data would suggest that you could be wrong?

Dvorak: The proprietary technical work I do on the market has been very bullish. At the highs in May, there were no intermediate or longer-term sell signals given; it was a very strong uptrend. So that tells you that what we’re having now is a correction . . . . Those same indicators are showing internal strength and resilience and an inability to really go down, so now we’re starting to see some rallies in the markets.

But I also do have some seasonal cycle analysis, and that work shows more of a flat to maybe a little bit down this summer, but it still points up at the end of the year. So my view is that we’ve probably finished the correction and are going higher. But the seasonal work does say that we could have a back-and-forth sideways summer and then rally at the end of the year.