USA: is all in the cycles?

Despite a high P/E for the s&p 500 and s&p BMI US indexes and despite many technical negative divergences, the stock market keeps moving upwards.

All being equal, the stock market could continue to do so for a couple of years thanks to the configuration of cycles.

We are in the first phase of a new Kondratieff cycle which began in 1998. If this very long term cycle is sliced into, first, decennial patterns and then Kitchin cycles, we can see in the chart below that we are presently in the first Kitchin cycle within a decennial pattern which began in 2009.
Yes, there is a risk of a major down leg (as in 1942 and 1978 - see the DMI indicator in the chart) but probably not before the present Kitchin cycle has completed its course, i.e. between 2011 and 2012.

I suspect the Dow Jones Industrials to move upwards and reach its equilibrium point as set by the present level of GDP, i.e. 14300, within 2 years. But the path could be bumpy because of the dollar (probably down), commodities prices (probably up) and interest rates (probably up).This suggests a possible decoupling between stocks and bonds within the next two years. If it is the case, it would be the source of the future down leg for the stock market in 2011/2012 ...