In this post here, discussed were 2 highly probable possibilities for the ending of wave 'B' circle - either it was already completed or another push higher needed to occur.
As I write this, the XAO is nearing a significant threshold - if wave 'B' circle has in fact completed, then a strong push to lower levels should soon occur and provide a good indication that wave '3' is underway. Otherwise a less likely scenario in that the recent drop from the 5000 level is a 3-wave correction that has ended or needs to unfold lower before completing. Either way - having an understanding of the most probable scenarios will provide an early warning should the preferred scenario not play out as desired.
A break upwards and out of the down sloping channel will provide evidence of further upside potential or more sideways action of an incomplete wave '2'.
Many in the mainstream media claim that the Global Financial Crisis is over and a recovery is underway (although only lukewarm). However, analyzing the financial stability of many banks (in the US and Europe) seems to portray a vastly different picture. The evidence is yet to confirm that the financial sector is on stable ground - I suspect another wave of failures and losses is not far away.