An April 1 update on the SP500 said a W-b rebound was under way into the April 18\u201328 window, based on Elliott wave analysis, market breadth and seasonality. A target of 6800\u20136900 was set using a 61.8\u201376.4% Fibonacci retracement of Wave-a plus past support and resistance.<\/p>\n
The index moved above that zone and made new all-time highs, reaching and exceeding 7120 as it nears the mid-term election year average turn date of about April 18. The market has followed this seasonal pattern 75% of the time.<\/p>\n
Examples from 2011, 2018 and 2020 show irregular flat 4th waves where B-waves can overshoot, after a missed target in the prior third wave, before a possible reversal. The 7120 level matches a 138.2% extension of Wave-1 (from the 2020 low to the 2021 high) measured from the 2022 low (W-2), and it was missed in January by about 120p (7002 vs 7120).<\/p>\n
The March low is presented as a 4th wave, with a 5th wave now in progress, marked as \u201calt: 4, alt: 5\u201d. The text also describes the 5th wave as a terminal wave.<\/p>\n
Looking back at our analysis from last year, we saw how the S&P 500 followed a predictable seasonal pattern, peaking right around the April 18, 2025, timeframe we identified. The push to the $7120 level was a classic irregular wave, which was followed by a significant correction into late spring of 2025. This historical behavior serves as a critical guide for the market’s current position.<\/p>\n
Today, on April 17, 2026, we see a similar setup, with the index pushing new highs near 7550 despite some concerning economic signals. For instance, the CBOE Volatility Index (VIX) has fallen to a low of 14, indicating a high degree of complacency among investors. This is happening even as the latest CPI report showed core inflation remains sticky at 3.1%, suggesting the Federal Reserve may have little room to lower interest rates.<\/p>\n
This divergence between market calm and persistent inflation creates an environment ripe for a reversal, much like we saw last year. The strong upward momentum could be a final, exhaustive push, often called a terminal wave, before sentiment shifts. Therefore, traders should be considering strategies that protect against a potential downturn in the coming weeks.<\/p>\n
One approach is to use put options to hedge long positions or speculate on a decline. Buying out-of-the-money puts, such as the May 7400 puts, offers a defined-risk way to profit from a market drop. The current low VIX makes these options relatively inexpensive compared to periods of higher market stress.<\/p>\n
Alternatively, for those who believe the market may stall rather than fall sharply, selling call credit spreads is a viable strategy. A trader could sell the May 7600 call and buy the May 7650 call, collecting a premium with the expectation that the S&P 500 will not rally significantly past 7600 before expiration. This strategy benefits from both a sideways or a downward move in the market.<\/p>\n
Just as we noted in 2025, the confluence of technical patterns and seasonality requires heightened attention right now. The old saying “sell in May and go away” has historical roots in these types of spring peaks. Monitoring for signs of trend exhaustion will be essential for managing risk and positioning for the market’s next major move.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" SP500 hit new highs near 7120, following seasonal\/Elliott-wave setup; terminal fifth wave signals possible reversal soon.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-44962","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t