On September 2, I looked at how we were in a narrow range for a month – about 1,000 points on the Dow and 120 points on the S&P 500. We broke up out of there; and as the charts suggested, we are approaching all-time highs around 27,400 on the Dow. A break above there would support the bullish case of the Dark Window rally continuing.

But… there is that mini-megaphone pattern of higher highs and lower lows since the bubbly January 2018 peak. To break above that would take the Dow breaking above 27,700. I show in the chart below that there is a rising wedge since April that would have to break 28,000 to further confirm this Dark Window breakout scenario that could see the Dow and the leading Nasdaq bubble index rally to a final peak into early 2020. So, there are two hurdles just ahead (marked by the blue dots) for stocks to get over near term to launch the most bullish final scenario.

If stocks can clear both hurdles then the highest target is around 10,000 on the Nasdaq and 33,000 on the Dow, 20%+ higher from here if the final rally is explosive as would be optimal. That would create a grand orgasmic top, and likely by January or March at the latest. There would also be a second less-explosive scenario that will follow the shorter top trend line up since the April top and perhaps only see a Dow 29,000 by early 2020. I will cover that more if we get there.

As I have been saying, this is a very dynamic topping process. If we can’t break above this potential megaphone topping pattern around 28,000 – which would invalidate it – then that pattern would likely play out with a final crash down to the bottom trend line or about 20,000. That is down about 26% from here. That will get more investors to think “it’s over.” But very likely not! Such a large correction and further weakening signs in the economy should finally get the Fed to follow Japan and Europe and bring back out the Bazooka with stronger rate cuts and QE again as Trump is impatiently demanding.

In that more bearish near-term scenario the final bull run would not likely start until later this year and then see a final explosive rally into around late April to early May of 2020. In that scenario the Nasdaq is likely to make a slight new high at 8,600+ – and this is important – the Dow and S&P 500 would likely not be able to make a new high. That creates a key “divergence” that signals a major top. In the last top in July, the broad indices like the Nasdaq, S&P 500 and Dow made new highs, but the small caps and transportation stocks did not. That was the first divergence and sign of a top building.

There is also a big short-term pattern in Bitcoin that is also signaling either a big break up ahead, or a breakdown. The upside breakout is more favored in this pattern. As I have been saying for over a year now, Bitcoin and cryptocurrencies are the final most extreme bubble in the tech bubble since 2009 just as the early-stage internet stocks were from late 1998 into early 2000 in the final blow-off rally of the tech bubble of 1995-2000. Now late 2018 to early 2020 could see such a final blow-off in this second and final tech bubble exactly 20 years later!

Here, a break above 10,900 would be bullish and favor the more bullish Dark Window stock scenario. The first target from such a break to the upside would be back to the all-time highs near $20,000. I still ultimately see a new high around $32,000 by early 2020.

A break much below 9,500 would be bearish and favor the megaphone breakdown pattern for stocks down to a Dow 20,000 or so.

Which scenario is more likely to play out should become more obvious in the next few weeks.