Monday, August 31, 2009

XAO - Medium Term Outlook

On the daily chart it appears that one more upwards thrust is required to complete the second zig-zag in a double zig-zag correction for wave 'B' circle.

Under this scenario, I would envisage that the XAO will get close to or break the upper trend channel line shown in the diagram. This means a target area of around 4700-5000 points.

It should also be noted that this wave 'B' circle may be only 1 wave in a multi-wave correction that will last for many months. However, it is too soon to speculate if such a scenario will actually play out. My assumption at this stage is that once wave 'B' circle completes (as shown), the next major leg down will be underway (until proven incorrect).

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