**Elliott Wave Analysis of the S&P 500 – Forecast as of July 14th, 2025**
*Original analysis and insight by EWM Interactive*
Financial markets are always in a state of flux, influenced by macroeconomic data, central bank policy, geopolitical tension, and investor sentiment. Yet, beneath this surface-level randomness, a methodical approach like Elliott Wave analysis can help traders and investors interpret patterns and predict future price movements. In this restructured and expanded review of the S&P 500 index as of mid-July 2025, we delve into the technical landscape, based on the original analysis provided by EWM Interactive. We will explore the key wave structures unfolding, long-term expectations, and short-term implications.
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## Context: Market Background and Recent Trends
Over the past several quarters, the S&P 500 has experienced significant volatility, influenced by shifting perceptions of the Federal Reserve’s monetary policy, inflationary pressures, and global economic uncertainty. However, from a technical perspective, the market appears to be adhering to recognizable Elliott Wave patterns. These patterns, rooted in crowd psychology, suggest that the U.S. benchmark index may be nearing the end of a major market cycle.
According to EWM Interactive, the current wave formation is part of a larger degree impulse structure, providing a compelling narrative for what may come next in the market.
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## Elliott Wave Structure: Identifying the Larger Picture
EWM Interactive initially identified that the S&P 500 was moving within a five-wave impulse pattern from the March 2020 lows. That impulse, defined as waves (1) through (5), seemed to climax with the high achieved in late 2024. In Elliott Wave theory, these five-wave patterns reveal the direction of the larger trend and are often followed by corrective three-wave counter-trends (A-B-C corrections). Here’s a breakdown:
### Primary Degree Wave Outline:
– **Wave (1)**: Originated during the COVID-19 crash in March 2020, bottoming out near 2,200. This wave rallied aggressively, fueled by global stimulus.
– **Wave (2)**: A corrective decline in late 2020, finding support near 3,200.
– **Wave (3)**: The most extended rally in the sequence, peaking in 2023 near the 4,800 mark.
– **Wave (4)**: Intermediate correction to sub-4,000 levels, which completed in early 2024.
– **Wave (5)**: Final rally, reaching a new high past 5,300 in mid-to-late 2024.
With wave (5) showing typical terminal signs such as bearish divergence on RSI and declining momentum, there is strong evidence that the overall 5-wave impulse structure has completed.
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## Terminal Impulse Completion: What’s Next?
If the analysis above holds, and the market has just completed a five-wave move upward, Elliott Wave principles suggest we are likely in the early stages of an A-B-C correction. Corrections following an impulse wave can vary in form—zigzags, flats, or complex combinations—but they usually retrace a significant portion of the prior gains.
### Probable Correction Structure:
– **Wave A**: The initial decline from the 2024 highs is unfolding as the first leg of the correction. So far, it has already pushed the index back toward 4,800.
– **Wave B**: A counter-trend rally is possible before the selling pressure resumes.
– **Wave C**: The final leg down may take the index toward the 4,200–4,000 zone over the coming months.
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## Key Characteristics of the Ongoing Correction
EWM Interactive underlines a few key reasons for favoring a bearish outlook:
– **Divergence on Oscillators**: As the S&P 500 climbed to a new high, momentum indicators like MACD and RSI showed significant bearish divergence
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