W5 Blow-Off Top Nears 8,000, Then a 10–15% Correction?

TRIGGER TRADES
08-17 10:50

The W5 blow-off rally has played out almost exactly as expected, with the $S&P 500(.SPX)$ reaching the 7,700 area. That leaves one final upside zone on the radar: 7,900–8,000.

But the bigger question is what happens after that.

The June highs are already showing bearish SMT divergence with $NASDAQ 100(NDX)$ , suggesting the rally may be losing momentum beneath the surface. As long as the Nasdaq remains below its all-time highs, the risk of a 10–15% correction remains on the table.

The larger Elliott Wave structure also points to a potential W4 decline later this year, with the S&P 500 potentially retracing toward 7,200 or lower.

For now, the trend remains bullish, but the risk/reward is changing quickly. My base case is for the market to reach its final target before a major top forms, most likely in late August or September. From there, the next major move could be to the downside.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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