Ron Meisels, founder and president of the independent research firm Phases & Cycles, says that we are in a defined pause in a bull market that will resume late this year and continue through 2016. Meisels contends that market cycles have seven phases – five bullish and two bearish – and in the fourth phase, a consolidation before the bull market enters its fifth and final phase. “A bull market goes through lags and corrections, and we were overdue for this correction,” he said. Still, Meisels expects things to get worse before they get better. He predicts a low around Halloween before a rebound, noting that investors’ pessimism is a contrarian sign and presidential-election years are generally favorable for stocks. Nonetheless, he suggests that the next phase of the bull market will be shorter. And he sounds a note of caution for this fall: if the S&P “breaks below 1,875-1,850, we’ll go toward 1,700.” Any lower than the mid-1800s, “and the bull’s case starts to unravel.” It would be the 20% decline that is often seen as the indicator of a bear market. The chart below shows the various phases Meisels describes.