Monday, July 6, 2009

XAO - Supporting evidence for further declines

The current wave count suggests that the XAO will soon break thru support and head further south to lower levels.

In the short term, there are a couple of scenarios that could play out depending on the subdivisions that unfold for wave (iii) down.

Either a small wave 'iv' upwards needs to unfold now or a further drop needs to occur for more of an aggressive wave (iii) down.

There is solid support at 3500-3470 where a bounce into wave 'b' circle upwards could occur, thus marking 5 waves down complete. At 3470, this is 61.8% retracement of the previous leg upwards and offers a suitable target for a bounce.

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