Eseandre Mordi
⬤ SPY continues to hover near historic highs with no confirmed broad market correction in sight. As The Long Investor noted, the selloffs of 2020 and 2022 never met classical corrective criteria — they were sharp but short-lived. The long-term monthly chart tells a bigger story: a 17-year uptrend that still looks structurally intact, though valuations are now bumping up against upper resistance levels that have historically triggered pauses. Earlier technical work flagged exactly this kind of setup in SPDR S&P 500 ETF (SPY) Is On a Bearish Territory With a Correction To Be Expected, illustrating how corrective zones develop within a broader uptrend.
⬤ Within this cycle framework, those 2020 and 2022 dips were pullbacks, not structural reversals. The chart now places SPY near the tail end of a Cycle Wave 5 — the final leg of the advance that began at the post-crisis lows of 2009. Momentum is still elevated, but longer-term oscillators are showing divergence, hinting that the upside from here could be limited without a healthy corrective phase first. Recent coverage confirmed that SPY pullback hits support at $678 as Elliott Wave structure holds, reinforcing that the recent decline fits the pattern of normal market ebb and flow rather than a major trend break.
Broad equity markets have not yet begun a defined correction.
⬤ Short-term price action is pointing in the same direction. A separate analysis found that SPY drops to $666-$674 support zone with Elliott Wave analysis showing the pullback nearing its end — suggesting current weakness is wrapping up rather than snowballing into something deeper.
⬤ What makes SPY's current position so significant is what it signals about U.S. equity markets overall. Extended valuations, cycle theory, and technical patterns all converge on the same message: we're at a turning point. Whether SPY works off excess through a measured correction or tests deeper lows will say a lot about the durability of this bull market and the broader economy's resilience. Watching how price interacts with key support and resistance from here could offer the clearest early signal of what's coming next.
Eseandre Mordi
