The bullish cycle in the S&P 500 ETF (SPY), which commenced from the April 7, 2025 low, remains underway as a five-wave impulsive structure. Wave (3) of this advance concluded at the October 29 high of $689.70. Subsequently, the corrective phase in wave (4) unfolded as a double three Elliott Wave pattern, as illustrated in the 30-minute chart.
From the wave (3) peak, wave W completed at $661.21, followed by a wave X rally that terminated at $685.73. The final leg, wave Y, developed as a zigzag correction. Within this structure, wave ((a)) ended at $663.26, wave ((b)) retraced to $676.24, and wave ((c)) declined to $655.81, thereby completing wave Y of (4) at a higher degree.
The ETF has since begun to turn higher from the 100%–161.8% Fibonacci extension zone of the WXY correction, which spans $639.80 to $657.40. This area has acted as a potential inflection point, reinforcing the bullish outlook. The corrective decline unfolded in three waves, and the absence of an extended third leg supports the view that it was corrective rather than impulsive.
Wave (5) is now in progress. However, a decisive break above the prior wave (3) high at $689.70 is required to invalidate the possibility of a double correction. As long as the $655.81 pivot remains intact, any pullback is expected to attract buyers in either three, seven, or eleven swings. The next potential upside target lies within the 123.6%–161.8% external retracement of wave (4), projected at $697.50 to $710.40
