Historical data doesn’t absolutely predict the future, but it sure does provide some excellent guideposts. Let’s dig in to what history has to say about what we can expect from the market going forward.

Stocks have a mass celebration this week in a delayed response to lower energy prices and a decision by the Federal Reserve Board to, well, do absolutely nothing.

The action has reinforced my belief that the next major move in market is higher toward the 1,330 level of the S&P 500 Index but with a ton of volatility. (See also: "August Could be the Tipping Point.")

Figure it’s like ascending a mountain road in the desert in a four-wheel drive vehicle with lousy hydraulics, and that’s what I’m getting at: 300-point up days for the Dow Jones Industrials Average followed by 200 point down days followed by 150 point up days.

There’s something for everyone, and yet enough tension to keep the majority of traders off-sides. The bears don’t feel comfortable selling short; the bulls don’t feel comfortable with their purchases, and that’s just how the market gods seem to want it to go right now as they inch the market higher.

Don’t get carried away, though, as we are still in a bear market during a recession. Sellers remain the dominant, most aggressive force, according to all the metrics that I look at. (To learn more, check out: "Data Points to a Recession.")

Yet there are some positives, to be sure.

Sinking crude oil prices are a huge plus. A Fed on hold is a plus. Congress out of session, where they can’t make trouble, is a plus. And some technology companies continue to show very promising earnings results. Cisco Systems (CSCO) announced this week it had pulled in a whopping $10 billion during the second quarter. That is remarkable.

CSCO execs, who are perennially optimistic, told analysts that they are comfortable with their long-term earnings growth projections of 12%-17%. They said their balance of business across the country was strong, with five out of six U.S. regions growing 8% to 23% year over year. CSCO also promised margins of around 65%, which would be awesome.

All in all, if you are a risk-taker and want a bullish trade toward my SPX 1330 target without taking on too much company-specific tsuris, buy the ProShares QQQ (QLD), which provides double the upside of the Nasdaq 100.

The Guns of August

Care for a touch more optimism? While studying the current market condition this week, I discovered a very interesting analog with the market of 1981-1982. It may not mean much, but it’s at least something to think about.

As you can see in the chart above, the market was experiencing a terrible bear market in 1981 and 1982 that saw prices fall 25% from their 12-month high.

I remember that period well, as I was in the second year of my career. I had finished graduate school in 1980 and looked for work in an economy that was staggering under the weight of 14% interest rates and 7.5% unemployment. I was lucky to find a job as a police reporter at the Los Angeles Herald Examiner for $5.25 an hour because the unemployment rate was on its way to 10% by 1982, double today’s level.

Anyway, what catches my eye about this chart is the similarity of the patterns of the Dow Jones Industrials then and now. Just as in our present market, the Dow topped out in the summer of the prior year. There was then a November high, a March low, and a May high before a steep decline into August. All of these touch points are the same today.

So you have to respect what happened next. The Dow bottomed on August 9th in 1982 then tap-danced around the same level for five days before launching higher. It then moved on to build an 18-year bull market even though the recession didn’t officially end until November and unemployment was still at 10% in mid-1983.

I’m not saying that the same is going to happen now, far from it. Many conditions of the two markets are very different.

For one thing, those high interest rates were about to decline for the next two decades, while ours are already low. But on the other hand, that could actually work in our favor. Treasury bond rates today are 3%, a level which offers virtually no competition for stocks when inflation is running at around 4%.

My main point here is that if we see the market stabilize here and then move higher, the key level I will be watching is the 50-week moving average, which is 12,671 for the Dow and 1,394 for the S&P 500. A burst through that level could be devastating for bears and lead me to imagine that somehow, some way, the bulls have found a way to take charge.

Jon Markman is editor of Trader’s Advantage and a regular contributor to InvestorPlace.com. To get this type of actionable insight from Jon and other InvestorPlace Media experts go to www.InvestorPlace.com today!