Monday, January 24, 2011

XAO short term update.

A short term update today on the recent reversal...

In the last post a point was made that under the ending diagonal pattern, a further push upwards could occur and thus ending this wave. This occurred, and last friday we saw a reversal down to the supporting trend line of the ending diagonal.

I strongly suggest that the ending diagonal is complete and the wave (c) top shown cannot be broken for this pattern to remain valid.

Monday, January 17, 2011

A careful watch on the XAO

An ending diagonal wave appears to have completed on the short term All Ordinaries index. This provides some insight on the future action of the XAO, usually a drop back towards the vicinity of the previous wave 4 - in this case wave 'iv' in the 4600 region. At the same time, it also supports an end to wave '2' that will see the index start (a long awaited) wave '3' down - the evidence isn't in as yet, but some clarity has been provided (and nothing to do with the Queensland Floods).

Breaking through the lower ending diagonal trend line and hitting 4600 for a brief pause before continuing lower would be expected under this wave count. Breaking above the wave '2' high as labeled would invalidate the current count (although a small push higher is still allowed under this ending diagonal, but cannot be longer than wave (iii) )