Editor's note: As the chorus of bears grows louder, our colleague Steve Sjuggerud continues to beat a familiar drum...

The "Melt Up" is here. And we're set to see one final, explosive rally before this historic bull market ends.

In today's Masters Series essay, Steve offers even more proof of the upside remaining in stocks today...

Welcome to the Next Chapter of the 'Melt Up'

By Steve Sjuggerud

It was more than three years ago... September 2015.

Stocks had just finished their first 10%-plus correction in years. But I was bullish.

I was preparing to give a speech at the Stansberry Alliance conference. It was titled "Welcome to the Melt Up."

I was worried as I got up onstage. I didn't know how the crowd would react.

I was about to give a speech that was against what everyone in the room believed.

They were all bearish – the speakers, the attendees, you name it. The stock market had fallen in August, and then again in September. These stock market declines had driven investors to an extreme in fear.

"Welcome to the Melt Up" was the opposite of what they wanted to hear. But it turned out to be exactly right...

Stocks have soared over the last three years... They've hit new high after new high.

Hindsight makes those gains seem obvious now. But calling for the "Melt Up" was a massively contrarian opinion in late 2015.

I was confident because I'd seen a Melt Up before...

The most recent major example was the top of the 1990s bull market. The Nasdaq Composite Index soared more than 86% in 1999 alone. Now that was a clear Melt Up period.

Importantly, these huge Melt Up gains typically begin after a time of extreme fear.

In late 1998, stocks had fallen dramatically in the wake of the Asian Financial Crisis, and we hit a fear extreme. Then, stocks surprised everyone and soared higher – the Nasdaq rose 200% in 18 months.

Take a look...

That's what a Melt Up looks like... a massive, blow-off top at the end of a bull market.

The important thing to remember is that Melt Ups usually begin after a period of extreme fear. And that's exactly what we've seen this year...

The extreme fear began in early 2018. Stocks fell more than 10% for the first time in years.

You can see the major decline by looking at this chart of the S&P 500...

This was a painful move. It was swift and deep.

Not only did stocks fall more than 10%, they did it in just two weeks. And investors were spooked...

Folks had gotten used to consistent gains and easy money over the previous couple years. But stocks showed a crack in their armor, and that caused a major spike in fear.

How do we define fear? It's more challenging than you think – you're trying to put a number on a human emotion.

We look at it in a variety of different ways, but the most common way to size up fear in the markets is through the Chicago Board Options Exchange Volatility Index (the "VIX") – often referred to as the market's "fear gauge."

When stock prices move wildly, the VIX goes up. When stock prices aren't volatile, the VIX moves down.

The VIX was actually near multidecade lows before the correction in early 2018. Then, it spiked in dramatic fashion.

Generally, a VIX reading of more than 20 shows fear in the market. Earlier this year, the VIX rose near 40 – a level not seen since 2015. Take a look...

This sets the stage for the Melt Up...

We were late in the bull market... And stocks fell slightly, causing a major fear extreme.

We're seeing signs of the Melt Up now. But I don't believe it's over yet.

The reason is simple... Things don't look anything like they did at the top of the last Melt Up.

During the last Melt Up, we saw the biggest gains in the tech-heavy Nasdaq Composite Index. It soared 200%-plus in 18 months as the Melt Up concluded. And prices hit truly ridiculous valuations along the way.

A lot of people point to today's valuations in the U.S. as a reason the recent gains can't continue. But here's the thing...

During the last Melt Up, valuations were already ridiculously high – before it all began.

The chart below shows the price-to-sales ("P/S") ratio for the Nasdaq during the 1990s. (This ratio is one of the best ways to measure real value in the stock market.) Take a look...

The Nasdaq's P/S ratio doubled from 1.5 to 3 in 1998-1999. It then roughly doubled again before finally hitting its peak.

This proves a powerful point... Valuations alone don't stop this kind of boom.

And that was just the broad index. The Nasdaq's top holdings hit even crazier levels...

The table below shows the Nasdaq's top 10 holdings at the end of 1999. Many of these are household names today. But back then, they were the most exciting and highest-growth businesses in America.

Importantly, as the table shows, these companies saw their P/S ratios explode during the last Melt Up. Take a look...

These numbers are hard to believe, but they're true...

Microsoft was priced at a ridiculous 17 times sales when the Melt Up began. Its valuation increased nearly 60% from there. Qualcomm went from being dirt-cheap, at 1.3 times sales, to a true bubble valuation of 27 times sales.

Only one stock on this list – WorldCom – saw its P/S ratio decline during the Melt Up.

Most of them saw their P/S ratios increase by multiple times – and they eventually reached crazy levels.

This is all the proof I need that the Melt Up in the U.S. isn't over yet.

Valuations are high... But they're nothing like those of the last Melt Up. And that tells me stocks can still soar dramatically from here.

Good investing,

Steve Sjuggerud

Editor's note: On Wednesday, October 24, Steve is hosting an event that could help create more millionaires than anything else we've ever done in Stansberry Research history. Steve will share his up-to-the-minute predictions on the stock market... explain how you can potentially double your money in the coming months (guaranteed)... and he'll even give away a recommendation that has 1,000% upside for FREE, just for attending the event. Save your seat right here.