The S&P 500 E-Mini Futures (ES) are experiencing an upward trend in the fifth wave, which follows a decline to 6540.5, marking the end of wave (4). This current wave (5) is structured as an impulse Elliott Wave pattern. Wave ((i)) concluded at 6718.5, with a pullback ending at 6593.25. A rally in wave ((iii)) peaked at 6722.5, followed by a dip to 6666. The final rise in wave ((v)) reached 6766.75, forming wave 1 at a higher level. The wave 2 correction appeared as a double three Elliott Wave structure. Wave ((w)) descended to 6651.5 after the wave 1 peak, with a rally in wave ((x)) to 6750.5. Finally, wave ((y)) declined to 6571.25, completing wave 2. The Index has moved into wave 3, with wave ((i)) of 3 nearing completion. A corrective wave ((ii)) will follow, retracing from the October 17 low, before the trend continues upward. Support is expected to hold at the 6540.5 level during a 3, 7, or 11 swing.

Global Economic Data

The UK Office for National Statistics will publish September’s Consumer Price Index at 06:00 GMT. Trends show Bitcoin treasury inflows have decreased by 99%, indicating that Bitcoin is being held as an asset by companies and governments. Based on the current Elliott Wave structure, we see the S&P 500 E-mini futures in a strong upward trend that began in April 2025. However, the market is due for a short-term pullback before it continues its climb higher. The critical support level to watch is the pivot at 6540.5, which should hold for the bullish outlook to remain valid. The immediate catalyst for this expected dip could be the upcoming UK Consumer Price Index data. Markets are prepared for an increase in inflation, a situation that has historically caused significant market movement, as seen throughout 2023 and 2024 when central bank decisions were heavily influenced by these numbers. A higher-than-expected number could easily trigger the corrective wave that we are anticipating. This overall positive sentiment is supported by a global economy that has performed better than expected earlier this year. For instance, the latest US jobs report for September 2025 showed the creation of 210,000 new jobs, keeping unemployment low at 3.7% and suggesting underlying economic strength. This provides a solid foundation for company profits and supports buying into market downturns.

Derivative Trading Strategy

However, there is underlying anxiety as major changes are still happening beneath the surface. Signs of this cautiousness can be seen in other asset classes, such as the reported 99% drop in inflows to corporate Bitcoin treasuries. This indicates a significant decrease in institutional interest in more speculative assets compared to last year’s peak. For derivative traders, the coming weeks will focus on preparing to take advantage of this temporary weakness. The strategy should involve viewing any pullback towards the 6600 level as a potential buying opportunity for the next major upward movement. Selling options that allow for selling at lower prices than the key 6540.5 level could be an effective way to enter long positions or earn income while the market stabilizes. Create your live VT Markets account and start trading now.

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