S&P 500 E-Mini Futures (ES) fell from the April 2025 low at 6367 in a move classed as wave (2). The market then moved higher in wave (3) and rose above the wave (1) high at 7036.25.
From the end of wave (2), wave ((i)) finished at 6653.75. Wave ((ii)) then pulled back to 6503.75.
Wave Structure And Key Levels
Wave ((iii)) advanced to 7185.75. Wave ((iv)) later eased to 7079.25.
The next move is described as wave ((v)), which is expected to complete wave 1 at a higher degree. After wave 1 ends, a wave 2 pullback is expected to correct the cycle from the March 31, 2026 low before the uptrend continues.
In the near term, the view remains positive while 6367 holds. Pullbacks are described as likely to take the form of three or seven swings.
We see the market is in the final stages of an upward push that started from the March 31, 2026 low. This rally is supported by recent economic reports, with first-quarter GDP showing a healthy 2.4% expansion and the latest CPI figures indicating inflation is cooling slightly to 3.1%. In the immediate short-term, traders could look to benefit from this last leg up by holding long futures positions or using short-dated call options.
Risk Management And Trade Planning
However, we expect this upward move, wave 1, to complete soon and give way to a corrective pullback in wave 2. The CBOE Volatility Index (VIX) has recently dropped to a low of 15, signaling a high degree of market confidence that could quickly reverse during a correction. This suggests that traders should plan to take profits on bullish trades and consider buying put options to hedge or profit from the anticipated dip in the coming weeks.
This expected correction should be viewed as a significant buying opportunity, not a reason to turn bearish on the broader trend. Looking back, the recovery from the April 2025 low at 6367 demonstrated the market’s underlying strength, similar to the powerful rallies that followed the significant dips in 2022. Therefore, we will be waiting for this pullback to unfold before establishing new, longer-term bullish positions.
The critical level for us to watch remains the 6367 pivot point. As long as any pullback stays above this threshold, the overall bullish structure remains intact. All trading strategies should incorporate this level as a definitive line for risk management, ensuring that any break below it would trigger an exit from long positions.
