In our most recent analysis, dated June 20th – available for review here – we delved into the behaviour of the S&P 500 (SPX), which at the time was valued at approximately $5960. Our approach combined insights gained from observing post-election year seasonality trends with the application of the Elliott Wave (EW) Principle. This combination led us to predict specific market movements: notably, a market peak occurring between June 8 and June 12, followed by a trough between June 16 and June 22. The accuracy of this prediction was confirmed when the index reached its zenith on June 11, subsequently declined to its lowest on June 13, and then recovered to its previous position. The development aligned neatly with our projections, providing a solid basis for anticipating a low in the ensuing days, succeeded by a rally lasting between 4 to 6 weeks.
Moving the narrative forward, the SPX is presently priced in the region of $6230, following a nadir on June 23 at $5943. This bottoming out occurred precisely within our anticipated timeframe, heralding the commencement of the predicted 4–6-week rally, which is now drawing to a close. The minor deviation observed at the June 23 low from our expectations necessitated a slight recalibration of our Elliott Wave count, leading to an extended, subdividing orange W-5 of the grey W-iii/c. This adjustment improves the correlation of our forecasted price action with the typical post-election year seasonality.
Figure 1 illustrates our refined short-term Elliott Wave count juxtaposed against the post-election year seasonality pattern. This graphical representation underscores our revised projection, which anticipates a peak (grey W-iii/c) around July 16, a low (grey W-iv) by July 21, and a final high approximately on August 2 (grey W-v): as indicated by the red circle in Figure 1. Should the market persist in mirroring the patterns observed in 2025, we anticipate a shift in market dynamics post-August, with a Bear market prevailing until the latter part of October at the earliest.
Our forecast for the grey W-iii/c phase anticipates an approximated peak within the $6380-6460 range. However, we’ve established precautionary (raised) warning levels to signal potential deviations from this range. The subsequent grey W-iv phase is expected to endure for about a week, ideally bottoming out at around $6025, give or take 100, with a tendency towards the higher end of this spectrum. The ensuing peak of the grey W-v phase is projected to hover around $6815, plus or minus 100.
Remarkably, the anticipated $6815 level neatly aligns with our longstanding projection for the third wave target zone of $6738-7121. This confluence suggests the potential formation of a significant market peak during this summer, akin to the patterns observed during the black W-2 phase, which also spanned approximately a year.
Figure 2 presents a comprehensive view of the SPX’s weekly chart, incorporating our preferred Elliott Wave count. This visual representation serves to consolidate our long-term market forecasts, brought into sharper focus through the prism of post-election year seasonality and the Elliott Wave Principle’s nuanced interpretations.
To unravel the complexities and implications of these observations, it’s pivotal to contextualise our analysis within the broader economic landscape. The post-election year often heralds distinct market behaviours, influenced by the adjustments and expectations set against the backdrop of newly established or continuing governmental policies. The Elliott Wave Principle offers a lens through which these market movements can be anticipated, predicated on the theory that market prices oscillate in recurrent patterns, reflective of investor psychology’s collective ebb and flow.
As we navigate through these predicted phases, with an acute awareness of the potential for unforeseen variables to alter the anticipated course, our analysis remains anchored in a comprehensive understanding of past market behaviours, calibrated against emerging economic indicators. The blend of historical patterns, such as post-election year seasonality, with the predictive prowess of the Elliott Wave Principle, furnishes investors with a nuanced guide to navigating the foreseeable market landscape. Through mindful observation and strategic anticipation of these cycles, investors can glean insights into potential market shifts, arming themselves with the foresight necessary to make informed decisions in an ever-evolving economic arena.
