$SPX S&P Elliott Wave Update 11:15AM PT — Aug 5– 300 point rally?
### $SPX Elliott Wave Update — Intraday 11:15 AM PT, August 5, 2024
The S&P 500 has shown significant resilience today, rallying 130 points off its recent low of 5119 to reach 5250, indicating the completion of a potential Wave 1. Currently, the market is experiencing a Wave 2 correction.
#### Recent Movement
- **Wave 1 Rally**: The initial surge from 5119 to 5250 marks a strong Wave 1.
- **Wave 2 Correction**: The ongoing correction phase is critical. Key support levels need to hold to validate the bullish outlook.
#### Elliott Wave Analysis
Based on Elliott Wave principles, the market’s movements can be projected as follows:
1. **Wave 2 Support**: The A = C pattern suggests a retracement to the 5170–5180 range. This area will be crucial for determining the strength of the correction phase.
2. **Wave 3 Potential**: If the S&P 500 holds the 5170–5180 support and subsequently breaks through the 5250 resistance, a Wave 3 rally could ensue. Given the initial 130-point surge in Wave 1, a 1.618 extension move from the Wave 2 low could project a further 270-point rally, targeting the 5450 range.
#### Key Levels to Watch
- **Support at 5170–5180**: Holding this support range is essential for the bullish scenario. A failure to hold could signal further downside risk.
- **Resistance at 5250**: Breaking through this resistance level would confirm the start of Wave 3.
- **Target at 5450**: If Wave 3 unfolds as projected, the S&P 500 could reach this level, representing a significant upward move from current levels.
#### Market Sentiment and Indicators
- **VIX**: Elevated Volatility Index (VIX) levels indicate heightened market fear and volatility. Historically, high VIX levels often precede significant market rebounds.
- **RSI**: The Relative Strength Index (RSI) suggests oversold conditions, indicating that the market may be due for a rebound.
#### Best-Case Scenario
- **Wave 3 Rally**: If the S&P 500 holds the 5170–5180 support range and breaks through 5250, it could trigger a Wave 3 rally. This move could propel the index towards the 5450 range, representing a 1.618 extension of the initial Wave 1 rally.
- **Positive Momentum**: Clearing the 5250 resistance level would reinforce bullish sentiment and attract more buyers, driving the market higher.
#### Worst-Case Scenario
- **Failed Support**: If the S&P 500 fails to hold the 5170–5180 support range, it could signal further downside risk and potentially negate the bullish scenario.
- **Continued Volatility**: Persistently high VIX levels indicate ongoing market volatility, which could lead to unpredictable price movements.
#### Conclusion
The S&P 500’s 130-point rally from its low of 5119 demonstrates the market’s potential for a significant recovery. If the market follows the Elliott Wave pattern, a retracement to the 5170–5180 support range could set the stage for a powerful Wave 3 rally, targeting the 5450 range.
Monitoring key support and resistance levels will be crucial in the coming days. The VIX and RSI suggest the market is poised for a rebound, but traders should remain vigilant. Holding the 5170–5180 support range is essential for the bullish scenario to unfold, potentially leading to a substantial rally towards 5450.
