Bank of America analyst predicts three‑wave correction for S&P 500

A technical analyst at Bank of America has identified a pattern that could lead to a three‑wave correction in the S&P 500 index, according to a Bloomberg report. The analyst says the market has completed an initial upward move and is now entering a corrective phase that typically unfolds in three distinct legs. The first leg is expected to be the most pronounced, followed by two smaller retracements that together could bring the index back toward its recent lows before a new upward trend resumes.

The analyst’s assessment is based on Elliott Wave Theory, which categorizes price movements into impulsive and corrective waves. In this framework, a three‑wave correction often signals a temporary pause in bullish momentum, allowing the market to consolidate gains made over the prior weeks. The analyst did not specify exact price targets, but noted that the correction could test support levels around the 4,200‑4,250 range, which have acted as a floor in recent sessions.

For investors, the outlook suggests that short‑term volatility may increase as the index navigates the corrective pattern. Market participants may see heightened trading activity around key technical levels, and risk‑on assets could experience intermittent pressure. However, the broader macro environment, including monetary policy and earnings reports, will continue to influence the overall trajectory of equities.

Overall, the Bank of America analyst’s view adds to a growing body of technical commentary that anticipates a measured pullback in the S&P 500 before any sustained rally can resume.