Title: Elliott Wave Analysis: S&P 500 Pattern Suggests End of Bull Market
Author: Adapted and expanded from original analysis by EWMinteractive
Date: February 2, 2026
Link to original article: [EWMinteractive Analysis](https://ewminteractive.com/elliott-wave-analysis-sp500-february-2nd-2026)
The S&P 500 index reached an all-time high of 5049 points on February 1, 2026, signaling a potential peak in a major Elliott Wave cycle. From an Elliott Wave perspective, this milestone could carry significant long-term implications, as the current price action suggests that a five-wave impulse pattern — which may have started back during the COVID-induced crash in March 2020 — is nearing its completion.
Below, we analyze the structure of the S&P 500 using Elliott Wave principles, examine supporting technical indicators, and discuss what this might mean for investors and traders going forward.
Overview of Elliott Wave Theory
Elliott Wave Theory, developed by Ralph Nelson Elliott in the 1930s, postulates that market prices unfold in specific repetitive patterns or “waves” driven by changes in investor psychology. The theory breaks market movements into two types of waves:
– **Impulse Waves (Motive Waves):** Trending moves that unfold in five distinct waves (1-2-3-4-5).
– **Corrective Waves:** Counter-trend moves that typically follow an A-B-C structure.
Impulse waves progress with the primary trend, while corrections move against it. Elliott Wave analysts look for these wave structures in various degrees (from short-term intraday charts to multi-decade trends) to forecast potential price behavior.
Long-Term Elliott Wave Structure of the S&P 500
According to EWMinteractive, the entire bull market since the March 2009 low can be interpreted as a massive five-wave impulsive structure. The March 2020 COVID crash marked the end of Wave IV and the start of Wave V — the final leg of the long-term cycle. Since then:
– Wave V has guided the S&P 500 to new highs.
– Subdivisions within Wave V indicate a smaller five-wave sequence.
– As of February 2026, all five sub-waves can be accounted for.
This suggests that not only has Wave V likely concluded, but the entire cycle from 2009 (or more broadly from 1982 or even 1932) may be coming to an end — setting the stage for a significant market correction.
Detailed Breakdown of Wave V (2020–2026)
Let’s take a look at Wave V that started at the March 2020 bottom around 2191 points:
1. **Sub-Wave 1:** Initial recovery from the COVID crash, reaching new highs by Q4 2020.
2. **Sub-Wave 2:** A relatively brief correction in H1 2021.
3. **Sub-Wave 3:** The strongest and most extended move, lasting into late 2023.
4. **Sub-Wave 4:** A decline that coincided with fears over rising interest rates and inflation in 2024.
5. **Sub-Wave 5:** The final push that culminated in the February 2026 all-time high of 5049.
Under Elliott Wave guidelines, Wave 3 is typically the largest and most powerful, while Wave 5 often forms a “blow-off top” — a steep, euphoric rise resulting in peak market sentiment.
Bearish Divergence Supports the Wave Count
One of the key technical elements supporting the bearish bias is the noticeable divergence between price and momentum indicators, such as the RSI (Relative Strength Index). At the February 2026 peak:
– The S&P 500 marked a new all-time high.
– RSI remained below its prior peak, creating **bearish divergence**.
– This typically signals waning momentum and is often
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