SP500 – Daily Analysis

CANDLES

I don’t recall seeing such concentrated bearish strength in the S&P 500. The index is set to close both its 2-month and 4-month frames with Bearish Engulfing patterns simultaneously—an extremely rare and powerful signal. The monthly frame will also print a neutral-to-bearish candle accompanied by a bearish MACD cross, further reinforcing the broader weakness.

In this context, today’s bullish daily close and the 5-day bullish failure look more like noise than substance. The message from the 5D frame was clear: while short-term rallies are possible, the index is likely preparing to seek new lows.

While the short-term outlook remains bullish, any gains are expected to be limited by well-established resistance levels. The mid- and long-term outlooks remain strongly bearish—and those odds will likely increase further after tomorrow’s closures.

S&P 500

After today’s move, the index continued higher in a noticeably corrective manner, which further supports the hypothesis of an ending diagonal in development.

A key structural detail is that the marked wave iii is not the longest in the sequence. As a result, wave v must terminate below $5666.13. If that level is touched or exceeded, it would invalidate the current diagonal count and suggest the potential for one more push to a higher high.

Ideally, ending diagonals conclude with a brief spike above the upper boundary, often accompanied by a surge in volume—serving as a final exhaustion move before a reversal.

SUMMARY

Today, SPX and the major indices failed to extend bullish momentum on the 5-day frame, effectively capping the recent rally. While a few more days of upward drift remain possible, the broader path is at risk of reversal. The indices continue to hold a firm bearish stance on the weekly, 10-day, and larger time frames and are now on track for a notably bearish closure across the monthly, 2-month, and 4-month frames tomorrow. Technical signals strongly favor the continuation of the bear market.

From an Elliott Wave perspective, the current structure is likely shaping into a zigzag, with wave (c) unfolding as an ending diagonal. If this count holds, a sharp bearish move may follow in the near term. As always, the previously identified key levels will be critical to watch.

The index may also be entering a mid-term consolidation phase, with sideways movement potentially lasting several weeks or even months—consistent with the purple scenario. Tomorrow’s monthly closure will be pivotal in defining the next major directional path.

Happy Trading!