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.

6 comments:

  1. Hi OWG,

    I notice you have labeled the last two waves (1) and (2). Wasn't the move down to (1) from wave (4) and hence should have a slightly different labeling format?

    Cheers

    Rudy

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  2. Yes, you're right Rudy - my slip. I'm still looking for an ending diagonal for the bigger wave (5) down.

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  3. Thanks for clarifying. I love your independent thought and wave counts. Keep up the good work. Most Elliott Wavers following the S&P500 have settled for the a multi-month rally following the completion of wave (5).

    It will be interesting to see if the the US can go bullish in the medium term whilst we go bearish.

    Cheers

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  4. Hi OWG,

    I was struck by another thought. Assuming that the recent action was a wave 1 and 2, the implication is that wave a would have been a 5 wave move. I can only see 3 waves completed. Can you provide your counts for the 5 waves on wave 1 so that I can understand your reasoning.

    Cheers

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  5. Sorry, that should have said that wave 1 would have been a 5 wave move. Unfortuantely the system doesn't allow a poster to edit a post.

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  6. I'll throw up a chart later showing a possible count down to wave 5. For wave 1, in an ending diagonal scenario - it will be a 3 wave move.

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