The S&P 500 is about to notch a new all-time high. Here's what could come next.

• The S&P 500 is on the verge of hitting a new all-time high heading into the end of the year.
• The potential new high would be the index's first since January 2022, after trading sideways for about two years. 
• The current pattern in the S&P 500 is consistent with secular bull markets, suggesting more gains ahead.

The S&P 500 is trading just 0.08% below its record closing high, and crossing that threshold would signal more gains could be ahead, according to Ned Davis Research.

Since the S&P 500 peaked on January 3, 2022, it experienced a brutal bear market throughout that year, followed by a steady climb higher in 2023. The two-year sideways consolidation period for the index means that if news highs are reached, the upward trend is likely to continue.

"Stretches of more than one year without an all-time high have been more common in secular bulls than in secular bears," Ned Davis Research said in a note on Wednesday.

Once the S&P 500 hits a new record high after not doing so for more than a year, the index has gone on to rise the following year 93% of the time with a median gain of 13.4%, according to the note.

Such a gain would catapult the index to around the 5,400 level, which is in line with the most bullish 2024 stock market forecast on Wall Street.

But when the S&P 500 hits new all-time highs, there tends to be a common worry among investors that perhaps the stock market is overbought and due for an imminent correction.

However, the data doesn't back up such thinking.

"Did the rally to new highs leave the market overbought and in need of a correction? Or was it a breakout to a new up leg?" Ned Davis Research asked. "History sides with the latter. The S&P 500 has outperformed its long-term average one-, three-, six-, and 12-months later."

It's also helpful that the S&P 500 wouldn't be alone in new-high territory. The Dow Jones Industrial Average has surged to record highs over the past month, as has the Nasdaq 100.

With the S&P 500 trading at 4,792 on Thursday, the index is just five points away from closing at a new record, and just 26 points away from hitting a new intra-day record.

"If the S&P 500 can confirm the Dow Jones Industrial Average's December 13 all-time high, it would support the case for further gains," Ned Davis Research said.