Executive summary
- Topping trend: SPX may have topped at $6,993.
- Potential target: $6,521 – the beginning of the diagonal pattern, with potentially lower levels.
- Wave count: Completed ending diagonal and 5-wave rally since April 2025.
On February 17, SPX declined to its lowest level since December. Though it was a quick touch of new lows, the minimum waves are in place to consider an important top at hand.
Current Elliott Wave analysis
The minimum waves are visible to count a completed Elliott Wave ending diagonal pattern in place. The ending diagonal pattern started at $6,521 on November 21 and appears to have completed in truncation at $6,993 on February 11.
Ending diagonal patterns take the shape of a rising wedge and signal an exhausted market. In Elliott wave terms, the diagonal consists of five waves labeled (i)-(ii)-(iii)-(iv)-(v).
The ending diagonal (as its name implies) is a terminal wave of a larger sequence. This means the ED is the last wave of a bigger wave that started April 2025.
If this analysis is correct, then a swift retracement may already be underway to carry SPX back to $6,521.
Using the Fibonacci retracement levels, we can also pinpoint potentially lower target zones near $6,169 (38.2%) and $5,660 (61.8%).
This pattern appears to be in play so long as SPX remains below the February 11 high of $6,993.
Bottom line
SPX appears to have topped on February 11 at $6,993 in an ending diagonal pattern. Diagonals tend to minimally retrace back to the beginning of the pattern, in this case, at $6,521 with lower levels possible.
If SPX rallies above $6,993, then we’ll need to reconsider other patterns.
