Charting a Meaningful Pullback in the S&P-500
Elliott Wave Plus – Blog & Video
Here’s my chart of the week. It’s the SPX priced in the RSP. (The market-cap weighted S&P priced in the equal-weight RSP).
As is often the case, a fairly clear Elliott wave count can be applied to the ratio chart. Up from the Jan 2023 low, a clear 5-wave impulse can be labeled. Also, the most reliable Fibonacci target for the end of 5th waves, where wave 5 is equal to the net travelled of waves 1 through 3 times .618 was hit last week.
The chart suggests leadership exhaustion in mega‑cap tech. In Elliott‑wave terms, the setup argues for a retracement back to the wave‑4 extreme, which implies a meaningful pullback in the cap‑weighted S&P.
Notice the textbook pink waves 3 though 5 bearish divergence showing on both the RSI and the MACD.
The video below is an excerpt from EWP’s Weekly “Counts” Webinar (5-17-26). It also includes our Hurst and FSC cycle analysis of the VIX.
The Mega-Cap Mirage: Charting a Meaningful Pullback in the S&P-500:
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