The S&P 500 peaked in late September at 2,941. It then crashed into late December, down to 2,347.

Ouch…

But, before thinking about calling “the end,” I looked to see if the pattern followed the steep trajectory of past bubble bursts, like those in early 2000 and late 1929.

It didn’t, and so I began calling for a 2019 Dark Window… a surprise boom in stock prices when most everyone expects only mild gains or maybe even slight losses.

Since the December blood bath, the S&P 500 has rallied sharply, to 2,860.

Bear market rallies can be very violent like this. They can also often look like they’re going to make new highs and then fail and drop steeply again.

That’s where we are today…

Given that the Fed has backed off its tightening policies for now and a trade deal with China looks imminent, it’s likely markets put in a low on December 26.

But, correction ahead or not, my three decades of studying bubbles and major peaks throughout history have clearly shown me that stocks always – always – go out with a bang; never a whimper.

And I’d call the September 2018 high a whimper.

I expect markets to zoom higher, giving us a final blow-off rally that correlates fully with my major 90-year Bubble Buster Cycle.

That said, we face two possible scenarios here.

The Two Scenarios

The first is that we see a “normal” 50% or so retracement of market gains since late December. That means the S&P 500 could drop to around 2,600, the Dow to around 24,000, and the Nasdaq to about 7,000.

According to my best short-term cycles guy, Stan Harley, we could see these lows between April 11 and 15. That would represent a second-wave correction in Elliott Wave terms and would make way for a powerful third-wave up to new highs into June or July. Such a rally should go to at least 3,100 (on the way to 3,500-plus) on the S&P 500, and would confirm my Dark Window scenario.

In the second scenario, we could get a nasty crash and see a slight new low or a C-wave of the continued correction. But, as long as the S&P 500 can hold near 2,300, the uptrend is still intact.

Regardless of which path markets take, my Dark Window scenario is still the most likely.

What to Watch For

If the markets are close to my first target around 2,600 in mid-April, then that would be an excellent buy target to benefit from the last blow-off wave.

Remember, I expect to see the Nasdaq go as high as 10,000, and the Dow as high as 33,000-plus before the crash-to-rival-all-crashes unfolds.

However, if the correction gets nasty like the last one, then that 2,300 target will be more critical and an even better buying opportunity if it can hold. If not, I will have to re-evaluate.