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It's been a topsy-turvy few weeks for investors as the market reminded everyone what goes up comes back down.

Scanning the headlines of various financial sites, it becomes obvious that some believe this is the beginning of a bear market while others think it's a good time to buy or reload. Which is it?

Here is my assessment, first short-term then longer-term:

Short-term:

The chart below shows the S&P 500 declining in a discernible 3 waves. These 3 waves could be labeled A, B, C or 1, 2, 3.

I started using Fibonacci projections last week to see where wave C or 3 might end, and it appears to have ended right at the 161.8% projection level (where wave C or 3 is 161.8% the length of wave A or 1). So far so good.

The question now is whether the decline is already finished (a correction can finish after 3 waves) or if it tags on waves 4 and 5 to turn this into an impulsive decline. A 5-wave decline should be followed by a good bounce and at least another leg down.

I am hoping this will turn into a 5-wave correction, because it would make more sense (more about that in a moment), but regardless, here are two things to keep in mind:

- A move above the July 25 low at 5,390.25 (lower blue oval) would create non permissible overlap for the wave 5 scenario.

- The market hasn't delivered a cohesive Elliott Wave pattern all the way to its conclusion for a long time. While I'm following the pattern, I'm certainly not hitching my wagon to it.

Longer-term:

The last free Market Outlook highlighted an interesting time relationship, which projected a high on July 24, which was very close to the actual S&P 500 high.

In addition, the last free Market Outlook also stated: "More important than the timing component is the potential pattern that goes along with the timing implications. I've been following that pattern for quite a while, even outlined its path in the 2024 S&P 500 Forecast, and it still remains valid."

It Makes more Sense

I said earlier, a 5-wave decline makes more sense, that's because timing and the pattern suggest a more prolonged correction.

Even from a psychological point of view, it would make sense to see a period of calm (which may include range bound choppiness) to digest the recent emotional flareup (VIX certainly entered panic territory).

The 2024 S&P 500 Forecast, the June 23 and again the July 28 Profit Radar Reports outlined the pattern I believe the S&P 500 is most likely to take. The pattern gives us 1) A minimum down side target 2) Maximum allowed duration.

Based on that pattern, it would make sense for stocks to decline in 5 waves, but it's not required.

Below are a couple of factoids for those believing a bear market has started:

- At Monday’s low, the S&P 500 closed 1.84% below the lower Bollinger Band, while still above the 200-day SMA. Since 1970, the S&P closed >1.8% below the lower BB 7 other times. 6 and 12 months later, the S&P was higher every time.

- Since 1970, the S&P closed down >1% each on Thursday, Friday, Monday 20 other times. 3 and 6 months later, the S&P traded higher 79% and 84% of the time.

The above are just two of dozens of studies I look at every month to gauge the objective odds for the market's next move.

For continued updates, purely fact-based, objective, out-of-the box analysis check out the Profit Radar Report. You can test drive it here and become the best-informed investor you know.

The Profit Radar Report comes with a 30-day money back guarantee, but fair warning: 90% of users stay on beyond 30 days.

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