SP500 – Weekly Analysis= SP
It looks like the decision hasn’t been made yet. All counts remain on the table. The question now is about probabilities—so let’s ask the candles. They always know more and can look around the corner.
This report is exclusive to our subscribers.
Candles
Just a few days ago, we were watching bullish odds develop on the weekly, 10D, and 15D frames. The most important message on Friday was that the weekly and 8D frames remain bullish for nearly all indices. The only exception was DIA, which formed a bearish Dark Cloud Cover on the weekly—but at the same time printed a bullish continuation candle on the 8D. Despite the bearish weekly candle, DIA recorded a fresh 8/20 EMA bullish cross and further expanded its bullish MACD. Taking all signals into account, the odds on the weekly and larger frames remain bullish, with DIA being the weakest link.
The daily closure of SPX was clearly bearish, but we still need confirmation and momentum, which will only become apparent in the next two trading days. Until then, the daily odds are bearish, while the larger time frames remain bullish.
ELLIOTT WAVES
At this point, the green count remains the primary scenario, and the previously outlined targets remain intact. Wave v of 3 possibly completed as an ending diagonal, and there is a chance for a sharp wave 4 to follow. Considering the principle of alternation, it would be reasonable to expect a relatively quick wave 4, potentially unfolding over just a few days. For reference, wave 2 took 11 days to complete.
SUMMARY
After a dramatic bullish reversal at the end of May—transforming what initially appeared to be a bearish monthly close into a strong bullish setup—the S&P 500 has continued to build momentum across multiple timeframes, with the 2–15D frames now technically aligned with the bullish stance on the monthly chart. The last two days of weakness have not yet made a dent in the larger frames. The risk is present, but it still needs to materialize. The 2–3D closures on Monday and Tuesday will likely shed more light on what’s ahead. For now, the mid- and long-term odds remain bullish. Unless there is a major selloff in the next two weeks, the monthly, 2M, and quarterly closures will likely be bullish. Multiple technical signals support the case for further upside, and the outlook remains bullish until reversed.
From an Elliott Wave perspective, SPX has possibly completed wave 3 of a higher-degree impulse. If the impulsive structure holds over the next few days and the index makes a new all-time high, the full impulse of a higher degree will likely be confirmed. While the red and purple counts remain possible, their probabilities are low and would likely be retired if the index reaches a new ATH. That said, some caution is still warranted due to the potential for a pullback.
All four major U.S. indices are currently aligned with a long term bullish outlook.
Happy Trading!
