S&P 500 Extends Rally Toward New Highs As Wave 3 Continues

S&P 500 continues to show strong bullish momentum, rising sharply and impulsively at the start of August while decisively breaking above its previous all-time highs. The latest price action suggests that the index is extending its advance within wave 3 of a new five-wave bullish cycle, which is likely part of a larger higher-degree wave (5).

The current structure still favors further upside, with the ongoing move unfolding as a five-wave impulse. If this count remains valid, we could see a short-term wave "iv" pullback before the next leg higher develops within subwave "v" of 3, potentially targeting the 7875 area.

From a bigger-picture perspective, the rally could continue toward the 8k region as wave (5) progresses. However, once the current impulsive move matures, traders should be aware of a possible higher-degree wave 4 correction. Such a pullback would likely be a normal corrective phase within the broader uptrend rather than the end of the bullish cycle, as the final higher-degree wave 5 of (5) could still follow afterward.

For now, momentum remains strongly bullish, supported by the ongoing risk-on environment, but short-term pullbacks should be expected as the market continues to extend higher.