Insights 
VT 
The S&P 500 index is expected to reach 7120, guided by the Elliott Wave Principle. The recent peak at 6764 and subsequent pullback were shorter than anticipated, but the index remains on track. According to the wave analysis, the government shutdown had no impact, and the current bull market continues to progress.
Target For The Final Rally
The target for the final rally is based on the fifth wave matching the first wave, estimated at 7126. This aligns with the long-standing target and suggests a potential bear market similar to 2022 once reached. The short-term levels for the green W-5 and black W-3 waves indicate the likelihood of the waves being over, with red indicating a definite end.
Dr. Arnout Ter Schure contributes financial analysis in navigating market trends. Meanwhile, trust in the US Dollar is waning, shifting interest towards gold and Bitcoin. The Official Trump memecoin experienced a notable surge, driven by American Bitcoin’s substantial acquisition.
Gold faces pressure amid US–China trade optimism, trading near $4,000 per troy ounce. With a mild decrease in the US Dollar, the GBP/USD saw a modest increase, amidst UK budget concerns. Investor sentiment is shifting towards economic events, impacting trust in traditional currencies.
Based on market analysis from today, October 27, 2025, the S&P 500 is in a strong upward trend with a target of 7120. We saw a very brief and shallow dip earlier this month around October 10, which was quickly bought, confirming the bull market’s strength. The index has already pushed past the 6900 mark, showing clear momentum toward our final objective.
For derivative traders, this suggests maintaining a bullish stance in the immediate future, such as through long call options or by selling out-of-the-money puts to collect premium. The CBOE Volatility Index (VIX) has remained low, closing below 14 last week, which can make buying options relatively inexpensive ahead of a potential final surge. Use the 6843 and 6772 levels as key warning signs to begin taking profits on long positions, as a break below these would suggest the rally is losing steam.
Risk Of Significant Downturn
Once the 7120 target is neared, the risk of a significant downturn, similar to the 2022 bear market, rises sharply. We remember that 2022 decline was over 25%, and preparing for a repeat scenario is prudent. Traders should consider buying long-dated puts or VIX call options for the first quarter of 2026 as a hedge, as these instruments are already pricing in higher future volatility.
This market environment is supported by a weakening US Dollar, which continues to drive capital into risk assets. The US Dollar Index (DXY) recently fell below the 98.00 support level, its lowest point in over 18 months. This trend benefits not only equities but also alternative assets.
Gold is now challenging the $4,100 per ounce resistance level, while Bitcoin has solidified its position above $180,000 amid growing institutional interest. Positive news from the anticipated US-China trade deal later this week could provide the final catalyst for the S&P 500 to reach its 7120 target. Therefore, watch these parallel markets for confirmation of broad risk-on sentiment.
