Don't Get Burned by the Dreaded 'Triple Top'

There is a lot of discussion lately that we are reaching the peak of a dreaded "triple top."

Here are just a couple of the many warnings from market experts:
-- If the S&P 500 and other major U.S. indexes are turned back at today's critical, even historic, juncture, we could see a significant upcoming decline in the U.S. stock market as history repeats and also rhymes. - MarketWatch, "Is this the biggest triple top ever?"

-- A third top has now formed, and a 60% stock market drop is inevitable -- and it could strike at any moment. - MoneyNews, "Market Collapse Predicted By Scientist"

That's just a sampling of the reports that are being released almost every day.

In 2000 and 2007, the S&P 500 peaked near current levels. The market then plummeted into long and agonizing bear markets. These crashes eliminated trillions of dollars in wealth and eroded investor confidence. J.P. Morgan Asset Management recently published this chart highlighting the S&P 500's inflection points over the past 16 years.

As you can see, the market ballooned from 1997 to 2000 and from 2002 to 2007. But both increases were answered with sharp tumbles from both the tech bubble burst (-49%) and the financial crisis (-57%). And the latest climb is even steeper than the previous two with a rise of 132%. That holds the potential for an even sharper drop.
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