After a large bull movement like the one we have just had, the odds for further price appreciation decrease. However, that does not mean that one immediately needs to sell – investors need only become increasingly more critical of positive news, and more watchful for negative news.

In the words of Victor Sperandeo:

“…the median extent for an intermediate swing in the Dow during a bull market is 20 percent. This doesn’t mean that when the market is up 20 percent, it’s going to top; sometimes it will top earlier, sometimes later. However, what it does mean is that when the market is up more than 20 percent, the odds for further appreciation begin to decline significantly. Thus, if the market has been up more than 20 percent and you begin to see other evidence of a possible top, it’s important to pay close attention to that information. ”

– The New Market Wizards, Schwager, 1992

After a 30% up year for the S&P 500, this market move is growing old. Though there are no immediate signs that the move will end, going forward into 2014, investors will need to be cautious and wary of signs of a top.