Top strategist Ed Yardeni thinks we may well have moved into the final phase of the bull market.

“I’ll be the first one to admit that the four seasons, the four patterns, is not science,” Yardeni told CNBC, referring to the phases delineated by the great John Templeton: pessimism, skepticism, optimism, and euphoria. “While it’s true that it doesn’t feel like everyone is euphoric, look at the valuation multiples,” Yardeni said.

Sign up for The Guru Investor’s FREE Weekly Newsletter

When valuations rise to multiples of 18 to 20 for mid-cap stocks, “that would be a melt-up,” he added. “It’s not inevitable that we’re going to have a melt-up. My preference would be that the market just go sideways for a while so that we could have a secular bull market, which I think is still possible.”

But “even if you have a melt-up followed by a meltdown, that does not necessarily mean that a bear market’s inevitable,” Yardeni added. “Bear markets happen when we have recessions.”