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