Title: Elliott Wave Update on the S&P 500 – July 16, 2025
Source: Original analysis by EWM Interactive. All credit to the original author.
Link: https://ewminteractive.com/elliott-wave-update-sp500-july-16th-2025
The S&P 500 has remained a critical barometer of global market sentiment, and its movements are closely scrutinized by traders, investors, and analysts. On July 16, 2025, EWM Interactive provided an update on the S&P 500’s wave structure based on Elliott Wave Theory. Their analysis interprets recent market activity and outlines potential future developments.
Below, the core insights from the original article are expanded into a comprehensive report to provide a more in-depth look at the S&P 500’s Elliott Wave pattern, projected moves, and trading implications.
Overview of Elliott Wave Theory
Elliott Wave Theory is a technical analysis tool that identifies price patterns in financial markets. Developed by Ralph Nelson Elliott in the 1930s, it is based on the idea that markets move in repetitive cycles driven by investor psychology. These cycles are reflected in “waves,” with each major trend subdividing into five waves (in the direction of the trend) followed by three corrective waves (against the trend).
Key components include:
– Impulse Waves: Move in the direction of the trend and consist of five smaller waves (1, 2, 3, 4, 5).
– Corrective Waves: Move against the trend and usually comprise three waves (A, B, C).
– Wave Degrees: Wave structures occur at multiple scales or timeframes, allowing fractal extrapolation.
Applying this to the S&P 500’s recent movements offers an analytical framework to guide strategic decisions.
Current Wave Count for the S&P 500
EWM Interactive’s update focuses on the larger Elliott Wave count that has been developing over the past several years. Their long-term view remains consistent: the market is in the final stages of a large impulsive move that initiated after the significant correction of early 2020.
According to their latest analysis:
– The current rally from the October 2022 low is part of Wave (5) of a higher-degree count.
– Within Wave (5), multiple smaller-degree subwaves have unfolded, which provide insights into the internal structure and timing of what could be a major reversal.
– Their interpretation suggests that Wave (5) is nearing completion, or may have already completed recently, depending on the wave count granularity used.
Wave Structure Breakdown (Based on July 16, 2025 Update)
The update provides the following detailed interpretation and projections:
1. Historical Context
– The market bottomed in March 2020 due to the COVID-19 panic and initiated a five-wave rally.
– The rally continued through 2021 and began to experience increased volatility and overlapping structures in the years following.
– By October 2022, a significant low formed, completing a large corrective phase within the broader impulsive move.
2. Wave (5) Composition
– The rally since October 2022 is labeled as Wave (5) and subdivides into lower-degree waves.
– Current interpretation of subwaves within Wave (5):
– Wave 1: Completed in mid-2023.
– Wave 2: A sharp and relatively shallow decline, completed by late 2023.
– Wave 3: A powerful advance that peaked in early June 2025.
– Wave 4: A brief corrective phase followed, with a complex flat or triangle structure.
– Wave 5 of (5): Possibly completed or in the final stages as of mid-July 2025.
3. Behavior at the Top
– The price action since the June 2025 high appears choppy, suggesting a possible reversal is underway.
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