The SP500 (SPX) is expected to continue its rally towards 7120, following an Elliott Wave impulse pattern. Recently, a minor 4th wave correction ended, allowing the index to remain above key support levels, currently standing 125 points higher (1.8%).<\/p>\n
In ideal impulse patterns, the third wave reaches 161.8% extension, the fourth hits 100.0%, and the fifth extends to 200.0%. Actual data closely aligns with these predictions, showing the index at 6850, dipping to 6780, and rising to 6895, with accuracy margins of +\/- 0.03-0.3%.<\/p>\n
Looking ahead, a slight pullback in the gray 4th wave to around 6785-6825 is expected before a further rise to 6930-7010. Pullbacks in uptrends are typically shallow, potentially leading to higher fifth wave targets and getting closer to the 7120 goal. From there, a prolonged move down to around 5800+\/-400 becomes more probable.<\/p>\n
Short-term warning levels are at 6827, 6800, 6738, 6660, and 6597, with each break reducing the uptrend’s likelihood by 20%. Dr. Arnout Ter Schure, with extensive experience in energy and environment sectors, provides these insights.<\/p>\n
Given the market’s strength since late November, we see the current rally to 6895 as a near-complete wave. A minor pullback to the 6785-6825 zone is expected, which should be viewed as a buying opportunity. The strong November jobs report released yesterday, showing unemployment holding steady at a low 3.8%, supports this short-term bullish outlook.<\/p>\n
For derivative traders, this anticipated dip offers an entry point for short-term call options or bull call spreads. The objective is to capture the next wave up towards the 6930-7010 area. We will use a break below 6827 as an initial signal to begin reducing bullish exposure.<\/p>\n
This next move is likely part of the final push toward our long-standing target of 7120. As the index approaches this level, the risk of a significant top forming increases dramatically. We expect this to be the peak of the rally that started back in April 2025.<\/p>\n
Therefore, as we near the 7120 target, the strategy should pivot toward accumulating longer-dated put options, perhaps targeting the March or June 2026 expiries. This prepares for the potential, prolonged correction down toward the 5800 zone. Recent inflation data, which has ticked back up to 3.5% annually, adds credibility to the idea that a market-cooling event is on the horizon.<\/p>\n
We are currently seeing complacency in the market, with the Volatility Index (VIX) falling to a low of 14, but we anticipate this will not last. This pattern shows parallels to previous major tops, such as in late 2007, where low volatility preceded a sharp and sustained reversal. Be prepared for volatility to expand significantly once the 7120 region is tested.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" SP500 eyes 7120 target as Elliott Wave analysis suggests continued rally; brief pullback may precede rise.<\/p>\n","protected":false},"author":62,"featured_media":16994,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-36174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/36174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=36174"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/36174\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16994"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=36174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=36174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=36174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}