Thursday, March 19, 2009
XAO - Triple Combination
Based on the short term waves, I'm really not satisfied that we're seeing impulse moves upwards in this latest rally. Even though at first glance 5 waves appears unfolding. In any event the answer should be with us very soon.
What may be unfolding instead is a triple combination - three 3 wave moves (with intervening 'X' waves) with a triangle for the last wave. Double combinations are more prevalent on the shorter term waves, so seeing a triple at this scale would be interesting to see confirmed.
Because of the triangle at the end of these corrective waves structures, many analysts will believe a wave 4 triangle is unfolding and expect another leg up.
If the above analysis is correct, we should see the rest of the triangle play out (tomorrow hopefully), and then a strong thrust to the downside once completed.