With the S & P 500 making a fresh all-time high Wednesday morning, it has erased the 6% pullback in short-order. With the index getting short-term extended for now, does it have much left in the tank? There are various indicators we can use to help guide us. But f I had to use one technical tool, and one only, I would choose classical chart patterns. It’s the first and last thing I look to in order to produce a market stance and make a trade. This is very evident across each of the pieces I’ve written for CNBC Pro. The reason is two-fold. First, patterns give us clear targets and support/resistance zones. And second, the win-rate of both bullish and bearish patterns determines the market’s dominant trend. On the way up, the S & P 500 had five straight successful bullish patterns: The index formed and broke out from bullish chart formations and hit its upside target (without violating its breakout zone) five consecutive times. Conversely, each potential bearish set-up failed. Indeed, the pullbacks were so minimal that one only could detect them using intra-day charts. By late March, momentum began to slow, and it became clear that it would take some time to see the next bullish pattern. As April unfolded, the makings of the first true topping formation took shape. With the alleged right shoulder of this bearish head-and-shoulders pattern lining up with the 50-day moving average, the set up seemed ripe for another down leg to commence. It never happened. That means there still has not been a successful bearish pattern (big or small) since last October. As the latest bearish formation faded, three new potential bullish formations began to build instead. Two of them now are live with targets up at 5,295 and 5,495, respectively. If the S & P 500 can’t hold this latest push to new highs, then a bullish formation like this could be constructed. Our ultimate upside target continues to be 6,100, which has been in play since the breakout on 1/19/24. The best thing the SPX has done since then is increase the distance between it and the breakout area near 4,800: The index was able to pull back 6% without violating that zone. The bottom line is this: Strong trends are made from both bullish patterns working and bearish patterns failing. If there’s one thing that needs to change for the market’s long-term trend to reverse to the downside, it’s that. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.