3:35PM ET - S&P Elliott Wave Update ARTICLE [FREE]
Elliott Wave Update: Wave 3 Taking Shape in the S&P 500
The S&P 500 is beginning to show the classic characteristics of a developing Wave 3, following a clean and well-defined first and second wave sequence. From an Elliott Wave perspective, this is where momentum typically accelerates and price action becomes decisive.
Let’s break down the structure step by step.
Wave 1: 6900 → 6980
The initial advance began near 6900 and carried the S&P 500 up to 6980. This move exhibited strong impulsive behavior, breaking prior resistance and establishing the directional bias. Volume expanded and pullbacks were shallow, consistent with a textbook Wave 1 — the phase where early positioning begins but broader participation has not yet fully engaged.
This 80-point advance sets the foundation for the entire structure that follows.
Wave 2: 6980 → 6932
Following the Wave 1 high, the market retraced to approximately 6932, producing a 48-point pullback. Importantly, this correction did not violate the origin of Wave 1, preserving the bullish structure.
Wave 2 corrections are often designed to shake out weak hands and create doubt. This pullback fit that profile perfectly:
Sharp but controlled
Overlapping and corrective in nature
Held above key structural support
From an Elliott Wave standpoint, this was a high-probability Wave 2, setting the stage for the most powerful phase of the sequence.
Wave 3: The Power Move Begins
With the correction now complete, evidence suggests the market is transitioning into Wave 3 — historically the strongest and most dynamic wave in the Elliott Wave framework.
Wave 3 is typically characterized by:
Expanding momentum
Increased participation
Strong upside follow-through
Minimal hesitation compared to Wave 1
Price action following the 6932 low is already beginning to reflect this change in character.
Wave 3 Target: 7080–7100
Using Fibonacci extension analysis, the most common target for a Wave 3 is 1.618 × the length of Wave 1.
Wave 1 length: ~80 points
1.618 extension: ~130 points
Projected from the Wave 2 low (6932)
This produces a target zone between 7080 and 7100, aligning closely with prior resistance and psychological round-number levels.
This confluence strengthens the validity of the projection.
Bottom Line
The Elliott Wave structure in the S&P 500 is aligning cleanly:
Wave 1: 6900 → 6980
Wave 2: 6980 → 6932
Wave 3: Now underway
Target: 7080–7100
Wave 3 is where momentum traders, trend followers, and late adopters typically converge. If this count continues to unfold as expected, the market is entering its most aggressive upside phase.
This is the window where Wave 3 participation matters. Get in now.
As always, structure and follow-through will confirm the move — but the setup, the numbers, and the behavior all point in the same direction.