S&P 500 Elliott Wave count warns of correction as breadth divergence deepens

💡 DMK Insight

The S&P 500’s recent price action is setting the stage for a potential rally, and here’s why that matters right now: With the index hovering around $7,385, traders should pay close attention to the anticipated pullback to the $7,310-$7,420 range. This aligns with the Elliott Wave Principle, suggesting that this 4th wave correction could be a strategic buying opportunity before the expected 5th wave rally. If the index holds above $7,310, it could pave the way for a surge towards the Fibonacci extension levels of $7,650-$7,720. However, if it breaks below $7,310, it might indicate a more significant correction, potentially shaking out weak hands. It’s worth noting that market sentiment remains cautious, and any negative news could derail this bullish outlook. Keep an eye on volume and momentum indicators as the index approaches these key levels. A strong bounce off the $7,310 mark could attract institutional buying, while a failure to hold could trigger selling pressure. Watch for these dynamics as they unfold in the coming days.