**Elliott Wave Analysis: S&P 500 Outlook as of December 15th, 2025**
*Adapted from EWM Interactive’s analysis by Ivo Luhse with expanded commentary and additional insights*
As 2025 approaches its close, analysts and investors are reviewing the performance and structure of the S&P 500 to project its trajectory for 2026 and beyond. The global equity markets have remained resilient, even after facing recessionary pressures, geopolitical instability, and fluctuating interest rates. However, beneath the surface, technical patterns suggest that the S&P 500 may be approaching a pivotal point in its long-term cycle.
This article breaks down the key points of EWM Interactive’s Elliott Wave analysis of the S&P 500 as of December 15, 2025, and supplements that review with insights from broader technical studies and macroeconomic indicators. The original analysis was produced by Ivo Luhse, a leading expert in Elliott Wave Theory.
## Overview of the Elliott Wave Structure in the S&P 500
Elliott Wave Theory is a form of technical analysis that identifies recurring wave patterns in price charts driven by collective investor psychology. It divides price movements into impulsive waves (which move in the direction of the overall trend) and corrective waves (which move against it).
As of mid-December 2025, the S&P 500 is completing what appears to be a five-wave impulse from the March 2009 lows, which marked the bottom of the Great Recession.
### Long-term Wave Count:
– **Wave I**: March 2009 to May 2015
– **Wave II**: Corrective move during the 2015–2016 market correction
– **Wave III**: A strong advance from early 2016 through the early 2020 COVID-19 crash
– **Wave IV**: The pandemic-induced plunge in March 2020
– **Wave V**: Ongoing rally that began in March 2020, now potentially in its ending phase
Based on the Elliott Wave structure, the fifth wave (V) in the larger cycle may be approaching exhaustion. If correct, the index is setting up for a larger-degree correction.
## Detailed Breakdown of Current Wave
Positions within Wave V have matured considerably:
– **Primary wave 1** completed in mid-2021
– **Primary wave 2** caused the selloff observed in late 2021 into early 2022
– **Primary wave 3** rallied sharply through 2023
– **Primary wave 4** unfolded throughout 2024, consistent with a sideways or zigzag correction
– **Primary wave 5**, still unfolding as of December 2025, appears to be in its final sub-waves
According to EWM Interactive’s analysis, the fifth wave of this impulse may be forming a classic ending diagonal pattern. This type of structure typically appears near the end of a larger move and often signals an impending reversal.
### Characteristics of Ending Diagonals:
– Occur in 5th waves or C waves
– Consist of five sub-waves labeled 1 through 5
– Each sub-wave breaks into three smaller sub-waves (not five)
– Often characterized by converging trendlines
– Carry bearish implications once completed
According to EWM Interactive, this diagonal pattern may be undergoing its final stages. A breakdown below the structure’s lower trendline would serve as a technical confirmation of reversal.
## Fibonacci Analysis and Price Targets
Elliott Wave theory often works in conjunction with Fibonacci ratios. These ratios help to project support and resistance levels, as well as the possible extent of corrections and rallies.
From the 2009 low to the peak of primary wave 3 in 2023, Fibonacci extensions indicate that the fifth wave may run out of steam near the 1.618 extension of wave I projected from wave II, which aligns with the 5,
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