Looking at the wave structure since the 21st Nov, I'm finding it hard to see other wave scenarios under the current long term count. A triangle is highly probable for wave 4's, in this case it would need to be an expanding one.
Monday, May 11, 2009
XAO - Expanding Triangle for Wave (4)
The Wave 'C' up leg in the Expanding Triangle Scenario for the XAO could well be complete (or very near completion with an additional sub-divison that takes the XAO above 3950).
The 3950 target was almost reached today and is a site of solid resistance and does provide a suitable area for a turn down into the wave 'D' leg of the Expanding Triangle.
Timewise there is relationships between the two upward sub-divisons of wave 'C'. The 'a' circle leg and the 'c' circle leg (not labelled) - the 'c' leg is 63% of 'a' - a very close 61.8% fibonacci relationship of time.
I've also include the MACD signal line, a short term high representing the end of wave 'iii' shown with the dashed line, and the subsequent divergence of the MACD as price hits a new short term high (representing wave 'v').
XAO Next Steps
Prices need to turn down from here (or perhaps after one more small push upwards) for the Expanding Triangle to continue to be a top contender. Five small waves down and a break of the short term trendline will be an indicator that suggests a turn has started.