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The Tell: The stock market is enjoying the best year in decades — but a bullish pattern suggests it’s just warming up

A bullish chart pattern, known as an inverse head and shoulders, is cropping up in a number of assets and indexes in recent trade and suggests that the broader equity market may have more room to run beyond its current record levels, according to Asbury Research.

The typical head-and shoulders pattern is formed when three successive peaks are reached in a charted security. Those peaks are described as the left shoulder and right shoulder, the head representing the highest peak in the middle, and a neckline linking two low points.

An inverted head-and-shoulders, however, is the mirror image of this traditional formation, and points to a rising rather than a bearish, or reversing trend.

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