SP500 – Weekly Analysis
As the benchmark for the broader US equity market, the S&P 500 provides an essential read on investor sentiment, market breadth, liquidity, and the health of the larger economic cycle.
In this weekly S&P 500 Technical Analysis, we examine the latest candlestick signals, trend and momentum structure, major support and resistance levels, and the Elliott Wave paths now in play.
With several bullish and bearish scenarios still competing for control, the next confirmation could determine whether the S&P 500 is building a foundation for another major advance or about to enter a deeper and more complex corrective phase.
CANDLES
SPX closed the first week of August with bullish reversal and continuation candles across several important mid- and long-term frames, including the weekly, 10D, and 15D. The other major indices showed broadly similar strength.
The sharp midweek spike pushed prices above the Bollinger Bands on several short-term frames, with the Dow showing the most extreme stretch. This increases the probability of a normalization phase, potentially through a few weeks of sideways trading or a moderate pullback. Even so, the short- and mid-term structures remain technically healthy and bullish.
Overall, SPX is moderately bullish in the short term, with an elevated risk of a pullback or consolidation. The mid- and long-term odds remain bullish until the market signals otherwise.
Elliott Waves
Long Term
At the beginning of July, I was still considering the possibility of an extended correction, outlined as red wave (2) on the long-term chart. At this point, wave (2) is likely complete and wave 1 of (3) appears to be underway.
Once wave 1 completes, I would expect wave 2 to develop over the next one to two weeks. If the structure confirms, that correction could set the stage for the more powerful wave 3 advance.
Under this scenario, SPX could rally approximately 20% before the end of 2026.
Short Term
On the short-term chart, I aligned the colors with the long-term count. Under the green scenario, I expect one more higher high to complete wave 1.
Wave 2 could then develop as a relatively sharp and quick correction, potentially a zigzag lasting up to two weeks. Such a move would fit well with the larger bullish structure before the next stronger advance begins.
The purple count remains on the table, but at this point it carries lower probability.
SUMMARY
SPX remains bullish across the mid- and long-term frames after closing the first week of August with constructive signals on the weekly, 10D, and 15D charts. The short-term structure is also bullish, although the recent stretch above the Bollinger Bands increases the risk of a temporary normalization through sideways action or a moderate pullback.
From an Elliott Wave perspective, the larger correction marked as wave (2) is likely complete, with wave 1 of (3) now underway. One more higher high could complete wave 1, followed by a relatively sharp wave 2 correction lasting up to two weeks.
If this structure confirms, the subsequent wave 3 could become the next major bullish phase, with SPX potentially advancing about 20% before the end of 2026. Overall, the primary outlook remains bullish, with near-term pullback risk viewed as part of the larger constructive setup.
