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Three year chart of S&P 500 etf SPY, click to enlarge
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Above is a three year chart of the S&P 500 etf SPY showing updated wave counts. The move up from the July/2010 low to the May/2011 high (major wave X of primary wave B) does not count well as an impulse. Since the wave up from the March/09 low to the April/2010 high (primary wave A) is best counted as an impulse, primary wave C should be an impulse or diagonal in order to complete a zigzag from the March/09 low. Major wave X of primary wave B does not meet that requirement, so it must be part of a primary wave B.
Primary wave B may now be forming wave D of a triangle from the Summer highs to be followed by wave E which may complete by the last week of this month. The completed triangle would be major wave Y of primary wave B. Once primary wave B is complete, primary wave C would end somewhere above the May/2011 high and possibly above the 2007 high. A close below the August 9th low may invalidate this outlook.
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