SP500 – Daily Analysis
In today’s Daily Report, we break down the market’s internal mechanics, highlight the signals developing across key timeframes, and identify the levels that could trigger the next decisive move.
CANDLES
All major indices pushed higher today and continue tracking for Three White Soldiers on the weekly frame, with SPX and NQ making new ATHs and already marginally recording 8/20 EMA bullish crosses. The upside momentum remains strong so far.
The main risk is extreme overbought conditions on all hourly frames, with Nasdaq already there on the daily frame. There is no question about a pullback—the questions are about the agility, character, size, and timing. Each of these components could impact larger frames such as the weekly if a sharp move happens in the next two days.
Overall, the outlook remains bullish until a reversal signal records. The risk of a near-term pullback has increased further.
Elliott Waves
Possible Impulse
The current wave climbed to a new ATH, extending possible wave 3 to almost 2.0× of wave 1. The technicals, however, have started to diverge, and there is no unified support for a continued wave 3. Some now support wave 5, prompting the introduction of a blue count.
The next pullback will be very important. An impulsive structure would likely signal that the 1–5 impulse is complete, while a corrective drawdown would better support wave 4.
Mid Term
The ATH today was a huge technical event. It has highly reduced the odds for wave (2) of the purple count. At this point, technicals better support the hypothesis that the current wave is wave 5 of (1) that started in April 2025.
While the current wave could also be wave 1 of wave (3) of a higher degree, as shown in green, I am skeptical of this scenario for two main reasons. The projected wave (2) was very shallow and did not retrace even 0.382 of wave (1), whereas a normal Fibonacci pullback for wave two typically ranges from 0.5 to 0.618 or larger. The 0.236–0.382 range better fits wave four retracements. The second reason is technical, as the current indicators do not support this wave as wave three.
This makes the purple count the primary scenario. Currently, wave 5 is almost equal in length to wave 1, which is the first perfect ratio for wave 5. The next would be around 1.618, or about $7500. For the index, this would be challenging, considering the current technical conditions.
At the same time, the broader market is becoming disbalanced from an Elliott Wave perspective. While NQ and SPX made ATH, Dow and Russell did not. Russell is less concerning, but Dow acting as a strong laggard in the structure is not typical. The alignment remains unclear and will be discussed further in the weekly reports.
SUMMARY
SPX made a new ATH, recording a major bullish technical event and marginally confirming the 8/20 EMA bullish cross on the weekly, while continuing to track for Three White Soldiers. The overall candle structure across daily and higher frames remains constructive, though momentum is becoming stretched, with clear signs of divergence and extreme overbought conditions on intraday frames.
From an Elliott Wave perspective, the move supports wave 5 of (1), with wave 5 approaching equality with wave 1. The next pullback will critical from the character prospective.
At the same time, the broader market is disbalanced, with NQ and SPX making ATH while Dow lags, which is not typical and adds uncertainty to the current structure.
