NEW YORK (TheStreet) -- The stock market needed to make a big gap up Monday to maintain the bullish Elliott Wave count required to take the S&P 500 to the 2150-2175 area next. The market did exactly what it need to do.
Even using a more bullish Elliott Wave perspective, the S&P 500 still presents a pattern that should provide somewhat limited upside, but the iShares Russell 2000 ETF (IWM) is still maintaining a very strong bullish wave pattern. As long as the next pullback does not break down below the $127 level in the IWM, the pattern taking it over $140 is still holding strong.
In the S&P 500 a run is seen to the 2131-2135 region for the next local topping target, which should then provide a corrective pullback.
In order to maintain a bullish view of the S&P 500, there can't be a breakdown below 2109. But it will still require a break of 2103 to invalidate the bullish Elliott Wave count seen on the chart. That count should take the S&P 500 to 2150-2175.
Remember, a breakdown below 2103 paves the way for a larger correction, which could take the S&P 500 back down toward the 1800 area. As long as support is held, however, the next target region should still be higher.