Elliott Wave Update on S&P 500 – July 16th, 2025 (Based on Original Analysis by Ewminteractive.com)
On July 16th, 2025, Ewminteractive.com published a detailed Elliott Wave analysis of the S&P 500, offering technical insight into the index’s current position in its market cycle and potential future movements. This update provides a comprehensive look at the market from the Elliott Wave Theory perspective, focusing on cyclical structure, wave counts, and what investors might expect as the year progresses.
This rewritten version of the original article reflects the key points of the analysis, expanding upon them for clarity and further explanation. The content below draws directly from the calculations, charts, and commentary offered by the author of Ewminteractive.com and is presented in an enhanced format for deeper understanding.
Overview of the Current Elliott Wave Count
As per the July 16, 2025, update:
– The S&P 500 has been in a long-term uptrend since the COVID-19 low in March 2020.
– This rise has generally been characterized by a clear five-wave impulsive structure, following the classic Elliott Wave pattern.
– The post-COVID rally is labeled as the fifth wave of an even larger degree wave, which itself is nearing or has already reached completion.
The important takeaway from this analysis is that the S&P 500 may be on the verge of a significant trend reversal. According to this wave count:
– We might now be at the end of cycle wave V.
– This implies that corrective wave sequences of large scale (possibly cycle or supercycle degree) could be underway or imminent.
– As per the structure, the recent price action shows signs of exhaustion, indicating that a top may have been formed or be in development.
A Closer Look at the Five-Wave Structure
The long-term Elliott Wave count on the S&P began forming from the March 2020 low. The breakdown is as follows:
1. Wave I: Lasted through much of 2020 into early 2021 as a strong recovery from the pandemic-driven decline.
2. Wave II: A sharp but brief correction that served as a pullback against the initial rally.
3. Wave III: A long, extended wave spanning most of 2021 through early 2023. This wave demonstrated classic characteristics of strength, wide participation, and increased volume.
4. Wave IV: An identifiable corrective structure that was more complex than Wave II and occurred during the latter half of 2023 into early 2024.
5. Wave V: The final leg of the advance, carrying the S&P 500 to new all-time highs through 2024 and into mid-2025.
According to the original author’s chart:
– The potential top formed in May 2025 could mark the end of cycle (V).
– From a technical standpoint, the weak momentum and negative divergence across multiple indicators support a topping scenario.
Potential Implications of a Major Top
Elliott Wave practitioners understand that following a complete five-wave impulse, a three-wave corrective pattern—labeled A-B-C—typically follows. Given that the S&P may be ending its fifth wave, the implications are significant:
– A decline proportional to the size and degree of the preceding impulse could follow.
– The correction, if of supercycle or cycle degree, could last several months, or even years.
– It might retrace as much as 38.2% to 61.8% of the five-wave advance that began in 2020.
The implications of this scenario include the possibility of a correction that could drag the S&P 500 considerably lower than where it is today. History offers prior examples:
– After the dot-com bubble (a completed five-wave advance), the S&P retraced more than 50% of the gain.
– A similar development occurred after the 2007 top, leading to the 2008 financial
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