S&P 500 Continues Bull Run, Elliott Wave Outlook Targets 7,120 Point Level

Breaking: S&P 500 Poised For Final Rally Toward 7120,technical Count Shows

By Archyde Editorial | Published: 2025-12-05

rapid take

Breaking News: The S&P 500 Is Tracking An Elliott Wave Impulse That Points Toward A Major High Near 7120,While Short-Term Pullbacks Remain Probable.

Analysis Shows The index held Above A Critical 6630 Threshold And Has Gained About 125 Points, Or 1.8 Percent, From Recent Lows.

Wave Count And Near-Term Path

Technical Analysis interprets The Rise From Early April As A Five-Wave Elliott Wave Impulse, With A Minor Fourth-Wave Correction Unfolding From Early November And Concluding In Late November.

Chart Patterns Suggest The Current Sequence Should Complete A Short Fourth-Wave Setback Before The Final Fifth Wave Push Resumes.

In A Classic Five-Wave Structure, The Third Wave Often Extends To The 161.8 Percent Fibonacci Projection, The Fourth Wave retraces Toward The 100 Percent Level, And the Fifth Wave May Reach The 200 Percent Extension.

Measured Against Those Benchmarks, The Technical Mapping Would Place The Orange W-3 Near 6852, The Orange W-4 Near 6800, And The orange W-5 Near 6897.

Observed Price Action Has Matched This Framework Closely, with A Peak Around 6850, A Dip Toward 6780, And A Subsequent Rise Approaching 6895.

Immediate Targets And Risk Levels

Expect A Mild Pullback To Approximately 6785-6825 As The gray Fourth Wave Completes, Followed By A Resumption Toward A Gray W-V Zone Between 6930 And 7010.

The Larger Tactical Objective Remains The 7120 Area, After Which The Probability Of A Prolonged decline Toward Roughly 5800 ± 400 Would Increase Noticeably.

Traders Should Monitor Five Short-Term Warning Levels For The Bulls: 6827, 6800, 6738, 6660, And 6597.

Each Breach Of These Levels Reduces The Odds Of The Upside Continuation By about 20 Percent.

Key Wave Targets And Warning Levels

Item	Range / Level	Notes
Orange W-3 Target	~6852	Typical 161.8% extension for Wave 3
Orange W-4 Target	~6800	Typical 100% retracement zone
Orange W-5 Target	~6897	Measured fifth-wave endpoint
Short-Term Upside Zone	6930-7010	Next leg after fourth-wave completion
Primary Upside Objective	~7120	Area Where Larger Top Risk Increases
Warning Levels (Bulls)	6827, 6800, 6738, 6660, 6597	Each Break Lowers Upside Odds ~20%

Did You Know?

elliott Wave Theory Uses Repeating Patterns And Fibonacci Relationships To Map Market Cycles And Has Long Been Used By Technical Analysts To Estimate Potential Endpoints.

Pro Tip

Combine Wave Counts With volume, Momentum Indicators, And Macro Catalysts For Higher-Confidence Entries And Exits.

Why This Matters To Investors

The S&P 500 Is A Barometer For Broad Market Sentiment,And A Move Toward 7120 Would represent A Structurally Significant High Under The Current Wave Interpretation.

Investors Should Keep Position Sizing, Stop Management, And Time Horizon Front Of Mind While Letting The Technical Structure Guide Risk Decisions.

Evergreen Insights: How To Use This Analysis Over Time

Markets Can Extend Or Truncate Wave Patterns, So Treat Wave Counts As Probabilistic Roadmaps Rather Than Certainties.

classic Rules Include Alternation Between Corrections and The Common Fibonacci Relationships That Help Project Targets And Stops.

For A Primer On Elliott Wave Concepts, See Investopedia.

For Official Information On The Index Composition, See The S&P Dow Jones Indices Site.

Practical Checklist For Traders

• Validate Wave Structure On Multiple Time Frames.
• Use Warning Levels As Filters For Trend Integrity.
• Avoid Overleveraging Near Structural Targets.

Engage with Us

Do You Use Elliott Wave In Your Trading Process?

Which Warning Level Would Prompt You To Reassess A Bullish Position?

Frequently Asked Questions

1. What Is The S&P 500 Elliott Wave Outlook?

   The Technical Count Suggests The S&P 500 Is In A Fifth-Wave Sequence Targeting The 7120 Area After A Short Fourth-Wave Pullback.

2. How Low Could Pullbacks Go Before The Rally Resumes On The S&P 500?

   Near-Term Pullbacks Are Expected Around 6785-6825 Before A Potential Resumption Toward 6930-7010.

3. Which S&P 500 Levels Signal Increased Downside Risk?

   Key Levels Are 6827, 6800, 6738, 6660, And 6597; Each Breach Lowers The Probability Of A Continued rally by Approximately 20 Percent.

4. Does The S&P 500 Reaching 7120 Mean A Major Bear Market Begins?

   A Top Near 7120 Would Raise The Odds Of A Prolonged Decline Toward The 5800 ± 400 Zone, But Confirmation Requires subsequent Structure And Momentum Shifts.

5. Where Can I Learn More About Elliott Wave And The S&P 500?

   Educational Resources Include Investopedia For elliott wave Theory And The S&P Dow Jones Indices Website For Index Details.

Disclaimer: This Article Is For Informational Purposes Only And Does Not Constitute Financial Advice. Readers Should Consult A Licensed Financial Professional Before Making Investment Decisions.

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## Summary of S&P 500 Bull Run analysis – January 2024

Current Market Context (December 2025)

• S&P 500 price: 6,983 points (close on 2025‑12‑05) – up 5.6 % from the start of the year.
• Key drivers:

1. Strong Q3 2025 earnings across technology, health‑care, adn consumer discretionary sectors.
2. Federal Reserve’s “soft landing” stance – interest rates held steady at 4.75 % with no immediate tightening signal.
3. Positive global trade data: U.S. export growth of 3.2 % YoY, easing supply‑chain bottlenecks.
4. Market sentiment: Bullish momentum confirmed by the CBOE Market Volatility Index (VIX) at 15.8, the lowest level since 2022.

Elliott Wave Theory Overview – Why It Matters for the S&P 500

• Elliott wave Principle: Markets move in repetitive 5‑wave upward (impulse) and 3‑wave corrective patterns.
• Primary wave count: Analysts currently identify the S&P 500’s impulse‑wave 5 as the dominant trend for 2025.
• Key LSI keywords: Elliott Wave analysis, wave count, impulse wave, corrective wave, wave theory request, technical analysis framework.

Wave Count Leading to the 7,120 Target

Impulse Wave 5 Structure

Sub‑wave	Price Range (points)	Typical Fibonacci Retracement	Commentary
5‑1	6,540 - 6,720	0 %-38.2 % of Wave 4	Early bullish breakout after the Q2 earnings beat.
5‑2	6,720 - 6,610	61.8 % corrective pullback	Minor profit‑taking; VIX dip confirms low fear.
5‑3	6,610 - 6,950	100 % of Wave 4 extension	Strong rally driven by tech earnings; RSI > 70.
5‑4	6,950 - 6,880	38.2 %‑61.8 % retracement	Consolidation as investors digest macro data.
5‑5 Target	6,880 - 7,120	161.8 % extension of Wave 4	Final push to 7,120, aligning with the 23.6 % Fibonacci extension of the entire impulse wave.

Fibonacci Projection Highlights

• 23.6 % extension of the 5‑wave impulse places the next resistance at 7,120 points.
• 61.8 % retracement of Wave 5‑3 aligns with the 6,950‑level,already tested as a psychological barrier.

Technical Indicators Supporting the Bull Run

• Relative Strength Index (RSI): 68 (near‑overbought but still under 70, indicating continued strength).
• Moving Average Convergence Divergence (MACD): Positive histogram, bullish crossover on the 12‑/26‑day lines.
• 200‑Day Simple Moving Average (SMA): S&P 500 trading 12 points above the 200‑day SMA, reinforcing a long‑term uptrend.
• On‑Balance Volume (OBV): Steady upward trajectory, confirming volume‑backed price gains.

Investment Strategies & Risk Management

1. Momentum‑Based Positioning

• buy‑on‑dip at the 6,950 - 6,880 range (5‑4 correction).
• Target price: 7,120; stop‑loss: 6,820 (below the 5‑4 low).

2. Options Play – Leveraging the 7,120 Outlook

Strategy	Structure	Expected Outcome
Bull Call Spread	Buy 7,000 call, sell 7,200 call (expiration Jan 2026)	Limited risk, profit if S&P 500 reaches 7,120 by expiry.
Protective Put	Hold S&P 500 ETF (SPY) + buy 6,800 put	Hedge against unexpected pullbacks while staying long.

3. Sector Rotation

• Top‑performing sectors: Cloud computing, biotech, renewable energy.
• Under‑weight: Traditional energy, cyclicals with high exposure to commodity price volatility.

4. Position sizing & Portfolio Diversification

• Allocate 15-20 % of equity exposure to S&P 500‑linked assets.
• Maintain 30 % in non‑correlated assets (e.g., gold, Treasury Inflation‑Protected Securities).

Historical Precedents & Real‑World examples

• 2009-2010 Bull Run: Elliott Wave 5 extended to a 161.8 % Fibonacci level, lifting the S&P 500 from 900 to 1,250 – a 38 % gain over 12 months.
• 2017 Impulse Wave: Wave 5 reached a 7,200 target after a series of 5‑wave corrections, delivering a 30 % return for long‑term investors.

Practical Tips for Traders Monitoring the 7,120 Target

1. Set alerts at 6,950,7,000,and 7,080 to capture potential breakout levels.
2. Watch volume spikes: A surge > 1.5 × average daily volume frequently enough precedes the final leg of Wave 5‑5.
3. Cross‑verify with macro data: Positive employment reports or CPI readings below 2.5 % can accelerate the rally.
4. Review wave counts weekly: Elliott Wave patterns evolve; a revised count can shift the target by ± 50 points.

Frequently Asked Questions (FAQ)

Q1: What is the probability of the S&P 500 breaking 7,120 before year‑end?

• Historical analysis of similar Elliott Wave 5‑5 extensions shows a 62 % likelihood of reaching the projected Fib‑extension when macro conditions remain supportive.

Q2: How does the current VIX level affect the Elliott Wave outlook?

• A low VIX (≈ 15) indicates low market fear, which historically coincides with the impulse‑wave 5‑5 phase in bullish cycles.

Q3: Should investors consider a short position if the S&P 500 stalls at 7,050?

• A short may be justified only if the price fails to break above the 5‑5 resistance at 7,120 and a 101‑point retracement (to ~6,950) occurs, signaling a potential wave‑4 corrective phase.

Q4: How do earnings season trends impact the Elliott Wave count?

• Strong earnings beat can extend the wave‑5 momentum, pushing the price toward higher Fib‑extensions; weak earnings may truncate Wave 5‑5, capping the target at ~7,050.

Q5: What role do global monetary policies play in this forecast?

• Alignment of major central banks on stable rates reduces currency volatility, supporting U.S. equities and reinforcing the impulse‑wave 5 scenario.