The S&P 500 index aims to hit 7120, according to the Elliott Wave Principle. Although it recently peaked at 6764 before a short pullback, the index is still on course. Wave analysis shows that the government shutdown did not affect the market, and the current bull market continues to move forward.

Target For The Final Rally

The goal for this final rally is based on the fifth wave reaching the same level as the first wave, estimated at 7126. This aligns with our long-term target and suggests that a bear market, like the one in 2022, could follow once we reach this level. The short-term indicators for the green W-5 and black W-3 waves imply that we may be nearing the end of these waves, while the red signals a definite conclusion. Dr. Arnout Ter Schure provides financial analysis to help navigate market trends. Trust in the US Dollar is declining, leading investors to turn to gold and Bitcoin. The Official Trump memecoin saw a significant rise, fueled by American Bitcoin’s large acquisition. Gold is under pressure due to optimism in US–China trade talks and is trading near $4,000 per troy ounce. A slight dip in the US Dollar allowed the GBP/USD to experience a small increase amidst concerns about the UK budget. Investor sentiment is shifting towards upcoming economic events, affecting confidence in traditional currencies. As of October 27, 2025, the S&P 500 is on a strong upward trajectory, targeting 7120. Earlier this month, on October 10, we noted a brief dip that was quickly reversed, confirming the strength of the bull market. The index is above 6900, showing clear momentum towards our final goal. For derivative traders, this means a bullish approach is advisable, such as using long call options or selling out-of-the-money puts to earn premium. The CBOE Volatility Index (VIX) remains low, closing below 14 last week, making it cheaper to buy options before a potential final surge. Keep an eye on the 6843 and 6772 levels as key indicators to start taking profits on long positions. A drop below these levels would suggest the rally is losing momentum.

Risk Of Significant Downturn

As we approach the 7120 target, the risk of a significant downturn increases, similar to the bear market in 2022, which saw a decline of over 25%. It’s wise to prepare for a similar scenario. Traders might consider buying long-dated puts or VIX call options for the first quarter of 2026 as a hedge, as these options are already reflecting anticipated higher volatility. The current market situation is boosted by a weakening US Dollar, which is encouraging investments in riskier assets. The US Dollar Index (DXY) has recently dropped below the 98.00 support level, reaching its lowest point in more than 18 months. This trend is beneficial for both equities and alternative assets. Gold is now testing resistance at $4,100 per ounce, while Bitcoin remains steady above $180,000 due to rising institutional interest. Positive developments in the anticipated US-China trade deal this week may trigger the final push for the S&P 500 to hit its 7120 target. Therefore, monitor these parallel markets for signs of increased risk appetite. Create your live VT Markets account and start trading now.

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