Based on the article “Elliott Wave Analysis of S&P 500 – August 18th, 2025” by EWM Interactive, the following is a rewritten and expanded version, incorporating additional insights while preserving the original author’s key findings. All credit goes to EWM Interactive for the initial analysis.
Title: S&P 500 Elliott Wave Outlook as of August 18, 2025
Author: Based on original content by EWM Interactive
The S&P 500 Index has been a focal point for traders and investors, particularly as global markets attempt to navigate post-recovery trends after a volatile period of monetary shifts and macroeconomic adjustments. Elliott Wave theory provides a structured lens through which analysts can interpret market movements—offering a forecasting method based on crowd psychology and fractal wave patterns.
This report breaks down the current Elliott Wave analysis of the S&P 500, evaluates the implications of wave positioning within the larger degree of the market cycle, and projects potential price development scenarios for the remainder of 2025.
Overview of the Current Market Position
According to EWM Interactive, the long-term Elliott Wave pattern for the S&P 500 illustrates a complex correction within a cycle degree. The index has completed a five-wave impulse known as Wave (V) of a long-range bull market structure. The implication of this milestone is that the market may currently be in a correction phase, consisting of a three-wave ABC pattern.
Key Highlights:
– The peak reached in early 2025 likely marked the termination point of a multi-year impulse wave that began in 2009.
– Recent price activity suggests the beginning of an ABC corrective wave, consistent with typical post-impulse dynamics seen in Elliott Wave theory.
– The development appears to be within the boundaries of Wave A of the correction.
Dissection of the Elliott Wave Pattern
In Elliott Wave terminology, a complete cycle consists of eight waves: five waves in the direction of the main trend (labeled 1 through 5) followed by a three-wave corrective sequence (labeled A, B, and C).
According to the current reading:
1. Impulse Wave Completion:
– The S&P 500 completed its fifth wave upward, known as wave (V).
– This final motive wave was part of a broader 5-wave move that began in the aftermath of the 2008–2009 financial crisis.
– Wave (V) delivered fresh all-time highs but did so with significant divergence in breadth and momentum—a common clue of exhaustion.
2. Commencement of Corrective Wave:
– The market has initiated a downward sequence consistent with the beginning of Wave A of a larger correction.
– Wave A is typically impulsive or a leading diagonal, both bearish patterns, signaling that short-term pressure lies to the downside.
3. Structure of Wave A:
– Based on internal subdivision, Wave A appears to be unfolding as a five-wave impulse, not a corrective three-wave structure. This distinction is crucial because it sets the tone for the type of correction expected.
– This supports the thesis that the current drop is the first wave of a larger ABC zigzag correction, which typically retraces much of the prior impulse.
Technical Signals Supporting the Elliott Wave Reading
Several additional technical signals support the wave-based diagnosis of the market:
– Bearish divergence on RSI and MACD: These indicators have failed to confirm recent highs, suggesting waning upward momentum.
– Faltering breadth: Fewer components within the S&P 500 are making new highs, pointing to internal weakness in the index.
– Volume patterns: Recent declines have occurred on higher volume, signaling distribution rather than accumulation.
Likely Path For the Remainder of 2025
Based on where wave counts currently stand, the likely scenario involves the completion of Wave A in the upcoming weeks or months, followed by a partial retracement in the form of Wave B, and then a resumption of selling pressure as Wave C unfolds.
Projected
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