[FREE] S&P 500 Article. Called the 6886 ending diagonal bottom and today’s reversal
S&P 500 Elliott Wave Update – Ending Diagonal Bottom Confirmed
Yesterday’s call for an ending diagonal bottom in the S&P 500 played out almost perfectly. After the gap down, price completed a textbook C-wave decline into the 6900 target zone, with the actual intraday low printing at 6886. That low marked the termination of a multi-day corrective structure and, more importantly, completed the larger ending diagonal pattern that had been forming on the lower-timeframe charts.
Ending diagonals are exhaustion patterns. They signal that sellers are losing momentum even as price makes marginal new lows. That is exactly what occurred at 6886. Momentum divergence, overlapping wave structure, and compressed ranges all pointed to a terminal move rather than the start of a new impulsive decline. Today’s sharp reversal confirms that interpretation.
The market did not just bounce — it reversed with intent.
One of the most important confirmations came as price pushed back above the .786 Fibonacci retracement at 6960. The .786 level is critical in Elliott Wave analysis because it often acts as the final resistance separating a corrective rally from the start of a new impulsive advance. Clearing it tells us the decline was corrective, not impulsive.
As of today, the S&P 500 is also threatening to close above 6986, which is a key structural level from the prior breakdown. A daily close above that level would strongly confirm that Wave 2 (or the final C-wave of a larger correction) is complete and that Wave 3 is now underway.
Wave 3 is where trends accelerate.
If this count is correct — and price action is increasingly supporting it — the market should now enter a broad, powerful advance marked by expanding range, stronger breadth, and shallow pullbacks. Wave 3 moves tend to travel fast and far, often catching late bears offside.
Using standard Fibonacci extensions, a conservative 1.618 projection of Wave 1 points to an initial target in the 7200 region. That is not an upper limit — it is simply the first major objective where partial profits and reassessment make sense. If momentum expands as expected, higher extensions remain possible.
It’s also worth noting that failed breakdowns, especially those that reverse violently after an ending diagonal, tend to produce some of the strongest rallies. Bears who pressed shorts near the lows are now forced to cover as resistance levels fall, adding fuel to the upside.
In summary:
6886 marked the ending diagonal low
6900 target zone was achieved
6960 (.786 Fib) has been cleared
6986 is the key confirmation close
7200+ becomes the Wave 3 objective once confirmed
As long as price holds above the 6900–6920 support band, the bullish Elliott Wave structure remains intact. This looks less like a bounce — and more like the start of a major impulsive leg higher.
Wave 3s don’t wait for consensus. They move first.