Based on the original article by EWM Interactive titled “Elliott Wave Analysis of S&P 500 – July 21st, 2025,” here is a rewritten and expanded version of the analysis. Credit for the original insights goes to the analysts at EWM Interactive. This comprehensive interpretation incorporates the core of their Elliott Wave analysis of the S&P 500 while expanding on the broader context to reach the 1000-word count requirement.
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# Elliott Wave Analysis of the S&P 500 – July 21st, 2025
The S&P 500 index continues to face a critical juncture as of July 2025. Technical analysts following the Elliott Wave Principle have observed that the index may have reached a major top or is very close to doing so. Through a detailed wave count, analysts from EWM Interactive have plotted a potential reversal sequence that could have significant implications for market participants.
This article presents an expanded interpretation of the Elliott Wave analysis originally conducted by EWM Interactive. It outlines how the wave structure points toward the end of a major bullish cycle and the beginning of a corrective phase. Investors, traders, and analysts looking for technical guidance on the future of the S&P 500 will find this perspective essential.
## Revisiting the Elliott Wave Count
To understand where the S&P 500 might be headed next, it is essential to first comprehend the recent wave structure. Elliott Wave Theory, developed by Ralph Nelson Elliott, holds that financial markets move in repetitive cycles, or waves, influenced by collective investor psychology.
According to EWM Interactive’s July 21st, 2025 analysis:
– The market has likely completed a five-wave impulse sequence from its 2020 bottom.
– This five-wave advance includes:
– Wave (1): The recovery from the COVID-19 induced crash of March 2020.
– Wave (2): A correction into late 2020.
– Wave (3): The longest and most powerful rally which extended into 2022 and beyond.
– Wave (4): A brief corrective dip in 2023.
– Wave (5): The current wave, likely ending as of mid-2025.
As wave (5) completes, the implication is clear: the subsequent move could be a significant corrective phase labeled as an ABC decline under classical Elliott Wave rules.
## Evidence of Impulse Completion
Several technical signals support the view that the fifth wave is nearing or has already reached its completion:
– Momentum divergence is evident across multiple timeframes, showing higher price highs with lower RSI and MACD readings.
– The internal sub-waves within wave (5) seem to adhere to fractal Elliott Wave structures, suggesting that the final fifth within the larger fifth wave may be complete.
– Market behavior near psychological resistance around 5,500 to 5,600 in the S&P 500 confirms extended sentiment and overbought conditions.
Taken together, these clues paint a picture of an exhausted bullish trend that could be setting the stage for a reversal or at least a sharp pullback.
## Potential Corrective Targets
Once a five-wave bullish impulse completes, Elliott Wave theory suggests a three-wave corrective ABC pattern is next. Based on current Fibonacci measurements and support regions, the correction may target several potential zones:
– The first target lies near the 38.2 percent retracement of the entire impulse from 2020 to 2025, located around 4,200.
– The second, deeper target, marked by the 50 percent and 61.8 percent Fibonacci retracement levels, lies between 3,600 and 3,900.
– These levels coincide with previous resistance and consolidation zones, making them reasonable areas for price to seek support.
A successful retracement to these levels would realign the market with its long-term trend while completing the necessary corrective structure.
## Risk vs. Reward Considerations
For traders and investors, the current technical situation implies a delicate balance of risk versus reward:
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