Sp500 Momentum Break Signals Historic Shift; Looking For A Pullback

The market completed a five-wave rally off last week’s low and is testing the 6950SPX micro support, prompting expectations for a pullback in the sp500. This matters now because a decisive break below 6945SPX would signal that a wave-2 correction is underway and set defined retracement and downside scenarios.

Wave Count and Pullback Setup

The wave count in the update identifies a reasonable 5-wave advance from last week’s low, and the likely next phase is a corrective wave 2. Typical corrective retracements are targeted in the. 500–. 618 region of the prior rally; the analysis has added a support box spanning the. 500–. 764 retracement of the labeled wave 1, roughly the 6828–6883SPX region. A corrective drop into that box would be presented as a lower-risk buying opportunity with a clear risk/reward setup if that structure holds.

Support Levels to Watch

Micro support sits in the 6945–6950SPX area. A follow-through below 6945SPX is the initial signal that wave 2 is in progress. If the pullback proceeds as a corrective retracement, the 6828–6883SPX support box is the primary zone to watch for completion of wave 2. The market is testing the 6950SPX micro support at the time of the update.

Sp500 Momentum Break and Targets

If wave 2 completes within the support box, the plan is to set Fibonacci Pinball extensions to identify pivot resistance and targets for subsequent waves 3, 4 and 5. The analysis notes that the rally following a corrective low could exceed 250 points higher from a favorable entry. Alternatively, an impulsive drop that breaks last week’s low would open the door for a larger-degree pullback toward the 5700–6100SPX region, a scenario that requires follow-through below 6720SPX to become higher probability.

Trade Implications and Forward Look

For now, the bullish case remains intact while the micro support near 6950SPX holds and the primary 5-wave structure remains valid. The immediate conditional outcomes are concrete: a sustained break below 6945SPX would signal wave 2; a corrective low inside the 6828–6883SPX box would offer a defined low-risk long setup; and any impulsive break below last week’s low with a follow-through under 6720SPX would materially raise the odds of a deeper decline toward 5700–6100SPX. The use of Fibonacci Pinball extensions is slated to provide specific pivot and target levels once wave 2 completes.

Key takeaways

• Market is testing 6950SPX micro support; a break below 6945SPX signals wave 2.
• Primary corrective zone: 6828–6883SPX (. 500–. 764 retracement of wave 1).
• Deeper pullback to 5700–6100SPX requires follow-through below 6720SPX.