The substantial sideways move on the XAO looks to be complete. The rapid declines have taken out the 2nd flat that starts at the end of the 'X' wave – a good indicator the wave (2) correction is complete and change in trend and wave count has occurred.
The MACD price oscillator has been divergent for many months indicating weakening momentum which combined with wave structures advancing slowly upwards in waves of 3's is a bearish indicator.
For the decline, the orange lines represent a declining channel that appears to still have room to fall to deliver a 5 wave decline. If the index continues to fall with a divergent MACD, then expect a bounce soon probably at around 4000. This level also represents 38.2% of wave 3 in the decline (not labelled). Right now, the index looks to be consolidating as a triangle
It should also be noted that the first A-B-C flat isn't strictly correct since wave 'C' doesn't clearly show 5 waves up. This was discussed some time ago but we had to go with what we saw until the wave counts proved there was something wrong (such as a small 5th wave failure within the B wave). Apart from this anomaly, both flats retrace at least 61.8% and are a 3-3-5 structure with a triangle for the X wave.