Feb 5 S&P Short Term And Mid Term Elliott Wave Update

Mid-Term and Short-Term Elliott Wave Update for S&P 500 — February 3, 2025

The S&P 500 has followed a clear Elliott Wave structure, with the third wave extending from 5,400 to 6,100, marking a strong bullish advance. Recently, a 0.382 Fibonacci retracement brought the index down to 5,775, confirming a Wave 4 pullback. This corrective phase aligns well with typical Wave 4 behavior, which often retraces in a measured manner before the final push higher.

Mid-Term OutlookAssuming the Elliott Wave count remains intact, the next expected move is a Wave 5 rally toward 6,200, a level derived from the common Elliott guideline where Wave 1 = Wave 5. However, reaching this zone could signal the completion of the broader third wave, potentially leading to a larger corrective phase afterward. Traders should watch for signs of exhaustion or divergence in momentum indicators as S&P approaches this threshold.

Short-Term AnalysisIn the past few days, the index has completed a classic A = C zigzag retracement, suggesting that the short-term correction is complete. This setup increases the probability of an imminent breakout attempt. However, as noted earlier, the 6,200 level represents a critical resistance area, and upside potential may become limited beyond this point.

Key Levels to Watch5,775 — Strong support from the recent Wave 4 retracement.

6,100 — Previous third-wave high, which needs to be surpassed for further upside.

6,200 — Expected Wave 5 target and potential exhaustion zone.

Market Implications & StrategyBullish Scenario: A decisive break above 6,100 confirms the start of Wave 5, with 6,200 as the primary target.

Bearish Scenario: If 6,200 acts as major resistance, a larger correction could follow, possibly retracing back to the 5,775 support zone.

Neutral Stance: If S&P struggles below 6,100, expect further consolidation before a decisive move.

Final ThoughtsThe S&P 500 remains in a structurally bullish formation, but the 6,200 region is a key inflection point. While the short-term setup suggests an upcoming breakout, traders should be mindful of potential exhaustion as the fifth wave matures. A disciplined approach, incorporating technical confirmation alongside Elliott Wave projections, will be crucial in navigating this phase of the market cycle.