U.S. markets edged higher on Wednesday, with the S&P 500 trading near 7,416–7,424 intraday — but beneath the surface-level gains, technical analysts are laser-focused on one question: is the impulsive rally from March nearing its end?
The Nasdaq Composite led the charge, up 1.26%, while the Dow gained 0.9% to 49,806. The VIX slipped 1.38% to 17.81, signaling relative calm despite the index sitting at historic levels.
The Wave Count: Wave 5 Nearing Completion
Elliott Wave analysis circulating among technicians today points to a textbook five-wave impulse in SPY from the March 31 low. The internal structure shows Wave 1 completing at 658.52, Wave 2 retracing to 644.16, Wave 3 topping at 712.39, and Wave 4 finishing at 702.28. Wave 5 is now extending, with a sub-structure that includes ((i)) at 716.48 and ((ii)) at 707.84, with ((iii)) still in progress.
"Just a few more highs likely before ((iii)–((v)) complete," analysts note. "Once wave 5 finishes at the larger degree, a meaningful corrective decline is expected." This mirrors classic Elliott Wave behavior where wave 5 typically shows fading momentum and lower volume relative to wave 3.
Key Levels to Watch
The S&P 500's immediate support sits at 7,030–7,100, a prior consolidation zone. Below that, the 50-day moving average at 6,954 provides stronger support, with the 200-day MA at 6,797 as the deeper floor. Immediate resistance is at 7,400–7,450, with the next psychological target at 7,500+. The daily RSI is in the 59–63 range — bullish but not yet overbought.
Individual Stocks In Focus
NVDA: The chip leader continues its impulsive advance from the March 30 low. Wave 1 completed around $177, Wave 2 retraced to $170, and Wave 3 is now extending with internal sub-waves targeting ((i)) at $190, ((ii)) at $185.14, and ((iii)) reaching $200.4. As long as $170 holds as support, the outlook remains bullish.
AAPL: Apple is progressing in a five-wave structure from the January 21 low. Wave 3 reached $280.90 and Wave 4 corrected in a zigzag to the $271–$272 zone. The focus is now on Wave 5, with expectations of a move to new all-time highs.
TSLA: Tesla is testing resistance around the $440 zone and the upper boundary of a rising channel. A breakout above would open the door to further gains, while a failure could lead to a deeper corrective pullback.
RKLB: Rocket Lab stands out with strong technical readings — all moving averages signal buy, and the stock trades near $127. The classic pivot points show R1 resistance being redefined to the upside as momentum continues.
Seven Straight Winning Weeks
On Monday the S&P 500 capped its seventh consecutive positive week. Earnings season continues to impress: S&P 500 companies delivered 27.7% earnings growth and 11.4% revenue growth through mid-May — the strongest since Q4 2021. However, valuations are elevated: the forward P/E of 21.4 sits above both the 5-year and 10-year averages.
The Bottom Line
Today's technical chatter balances two competing forces: the wave structure supports short-term upside, but proximity to Wave 5 completion and emerging momentum divergences raise the odds of a meaningful correction in the medium term. Technicians recommend watching for a breakout above 7,400 for continuation, or a break below 7,030 as an early warning sign of a trend change.
