The analysis looks at the current S&P 500 chart using the Elliott Wave structure. It explores whether a quick pullback is coming or if the momentum will push it to new highs. Two scenarios are considered: if wave C has ended or if another downturn is likely. The session focuses on understanding the Elliott Wave flat structure, alternative wave counts, and potential downsides. It aims to provide scenario-based insights, guiding traders without exaggeration. Neerav Yadav, a skilled Futures trader with over ten years of market experience, shares knowledgeable perspectives that prioritize structure over hype. Related content discusses various economic and market topics, including the rising silver price, Japan’s fiscal changes, and concerns regarding the GBP/USD. There’s also information on the best brokers for 2026, tailored to different regions and trading needs. This content is for informational purposes only and does not claim to be infallible or always up-to-date. Readers should be aware of the risks involved with open markets and the importance of conducting their own research. The author emphasizes their independence and lack of compensation from any mentioned companies, taking no responsibility for investment decisions made based on this article. We are at a crucial decision point for the S&P 500 after it crossed the 6200 level. The key question is whether the momentum can propel the index higher or if a brief pullback is necessary first. January’s CPI data, slightly lower than expected at 2.8%, is boosting optimism among buyers. The case for a straight rally is supported by a Federal Reserve that seems to be maintaining its stance. The markets are pricing in a 60% chance of a rate cut by the third quarter of 2026. This favorable outlook encourages buying during any strength. For derivatives traders, this scenario suggests that short-dated at-the-money call options could keep performing well. However, the market structure indicates that one more downward movement, a final C wave, might still happen before a steady rise to new highs. We recall the market behavior in the third quarter of 2025, where a quick correction shook out weaker investors before the year-end rally. A similar brief dip now could serve as a healthy consolidation. This uncertainty is also evident in the options market, where the VIX sits at a low level of 14.5, indicating complacency. This makes protective puts relatively inexpensive for those looking to guard against a sudden drop. It also presents an opportunity to buy call spreads, which can profit from an increase while keeping initial costs low. A cautious approach for the next couple of weeks is to manage these two possibilities. Consider using options to set your risk. You might buy call options with longer expirations to ride out any potential dip. Additionally, staggering your entries could be beneficial, allowing you to add to a bullish position at a better price if we see a minor pullback toward the 6100 support level.

here to set up a live account on VT Markets now