SPX – Correction Scenarios

#SPX – Correction Scenarios

The S&P 500 is entering a corrective phase after completing a full 5-wave impulse.
Current price: 6,654
Main focus: potential retracement between 6,350–6,150 pts

Technical Context
• The index reached the 2.618 Fibonacci extension (≈6,520) — typical for the final wave 5.
• RSI divergence + trendline break confirm exhaustion.
• Structure now shifts into ABC correction, possibly extending into wave (4) or a larger degree A-wave.

Correction Scenarios
1️⃣ Shallow pullback (yellow path)
• Target: 6,600–6,530 (0.236 Fib)
• Structure: quick ABC with limited downside — “wave 4 inside 5.”
• Bias: short-term profit-taking only.
• Probability: High, if Fed remains neutral and earnings stay solid.
2️⃣ Standard correction (purple path)
• Target: 6,350 (0.382 Fib / Pivot)
• Structure: classic A-B-C retracement after trend extension.
• Represents healthy market cooling without trend reversal.
• Probability: Base case / Most likely.
3️⃣ Deeper correction (white path)
• Target: 6,150 (0.5 Fib / EMA 200 zone)
• Structure: larger A-B-C completing wave (4).
• Often precedes a strong new impulse (wave 5 of higher degree).
• Probability: Moderate, triggered by weaker Q3 data or tighter Fed tone.
4️⃣ Extended correction (cyan path)
• Target: 6,030–5,800 (0.618–0.786 Fib)
• Structure: deeper W-X-Y or expanded flat, washing out late longs.
• Long-term accumulation zone.
• Probability: Low, but key for long-term investors.
📌 Summary
• SPX likely transitions into a corrective ABC structure.
• Primary support area: 6,350–6,150.
• Only a break below 6,000 would confirm a broader trend reversal.
• Until then, overall bias stays medium-term bullish — correction before continuation.