Sp500 technical rally completes five-wave pattern, trader warns a pullback may be next

Mo. Basuony

Published: February 20, 2026 9:33 PM ET

Sp500 technical rally completes five-wave pattern, trader warns a pullback may be next

Elliott Wave Trader wrote that the sp500 has completed a five-wave rally off last week’s low and is now testing micro support at 6950SPX, a break below 6945SPX that would signal the start of a corrective wave 2. That development matters because it sets the framework for where the next low and subsequent rally targets could form.

Looking For A Pullback

The update lays out a classic Elliott wave setup: a finished wave 5 off last week’s low and an expected retracement into a support zone defined by Fibonacci levels. The author has placed a support box between the. 500-. 764 retracement of what is labeled wave 1, noting that box sits in the 6828-6883SPX region. For now, the piece identifies micro support in the 6945-50SPX region, and it says the market was testing 6950SPX as the note was written.

Sp500 testing 6950SPX micro support — what a break would mean

If price follows through below 6945SPX, the analyst says that should provide an initial indication that wave 2 is in progress. The update adds that a corrective pullback into the 6828-6883SPX support box could offer a low-risk long trade set-up, and it points to a potential rally that can exceed 250+ points higher once the correction resolves.

Alternative downside scenario and threshold to watch

The note also sketches a larger-degree downside path: if the decline takes shape impulsively and then breaks last week’s low, it would reopen the possibility of a deeper pullback to the 5700-6100SPX region. That larger decline would require follow-through below 6720SPX to become higher probability, the author states, while also observing that "for now, the bulls still have the ball. "

The analyst plans to use Fibonacci Pinball extensions once wave 2 completes to map pivot, resistance and targets for waves 3, 4 and 5. Traders watching the sp500 should therefore track the 6950SPX micro support and the 6945SPX break point as the immediate trigger that would shift the count toward a corrective phase.