The S&P 500 stock index I:GSPC rallied 200 points in almost a straight line after reaching a bottom at the start of November, but for the past week and a half, the bellwether index has been in a sideways grind.

There is nothing bearish about a sideways grind, however, especially following a 200-point rally. We are counting this as a fourth wave in our Elliott Wave analysis. The fifth wave should see the S&P 500 reach more than 2300.

After Thursday's decline, there are enough waves in place for all of a running-triangle fourth wave. Running triangles are quite rare, however, so I would like a little more evidence that the triangle has completed. In fact, it's still quite possible that a standard triangle could play out over the next several days in the form of more sideways grinding.

In the end, we're left with the same broad outlook we have been discussing for weeks. As long as the S&P 500 does not break upper support, it is on track to reach our targets above 2500 in 2017. Because it will not rise in a straight line, it's likely that we'll see more sideways weeks in the coming year. 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.