It is nearly a universally held—albeit logical—view that equity markets are currently carving out a top, that the ‘end’ is nigh. I find myself involved in recurring conversations with investors and businesspeople I encounter: the Standard & Poor’s 500 index is topping, they assert. Why?

Well, the market is facing too many risks from China/US trade war, Brexit, low rates, etc. It’s just a matter of time. They see little reason to think markets can rise since they have been going up for 11 years already. The logic there, admittedly, is faulty. This is consensus thinking, which is sometimes right but is often enough wrong. When that happens investors could make hay by going against it.

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This consensus view strengthens my contrarian conviction that an upside market breakout is coming for S&P 500 index. It’s possible that this rise could be potentially significant, if history is any guide. As I have pointed out previously, since 1945 there have been six major tops, which were followed by a 30% or greater decline in equity prices. However, the major tops, highlighted in red, show an accelerating rise in the 20 months leading to the highs.

Instead, flat markets that are “going nowhere” were resolved with substantial u...

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