Updates Later Today

Sorry, been incredibly tied up, charts tonight.

Interest Rates - Consolidating

The 90 day bill rate is currently at 4.81% and has been trending sideways for several months. There's been talk in the MSM for the case to lower rates by the RBA due to poor economic conditions, this may happen as discussed here but ultimately higher long term rates are on the horizon.

One thing for certain is more adjectives and nouns from the RBA will no doubt be forthcoming to justify some type of decision that's already predetermined by the 90 day bill rate.

XAO - Short Term update

There are two interpretation for the bearish case on the XAO - neither of them a positive sign for things to come - some charts later.

In the previous short term post, wave '4' upwards was considered underway, however it pushed past the 38% retrace level (which tends to be common for wave 4's) and stopped at 61.8% retracement of wave '3' down. A new low needs to now unfold before we see more corrective action.

GOLD - Short Term update

Gold has climbed to new highs and therefore invalidating the short term count. This may mean gold is sub-dividing and extending higher for the short term count and under this condition, further highs will be expected. Charts later.

Gold - Short Term update

Some interesting action on Gold over the last few days. The 1800 levels have been hit, and as discussed in the previous post -  it was likely to quickly reverse....

"Another push higher to around the 1800 levels is needed to complete wave 'v' of '(v)' and will probably break thru the upper channel line in a 'blow off'."......"A significant reversal is anticipated on the coming days or couple of weeks."

Now the question is: has the medium thrust higher completed? We will likely know very soon and don't be surprised if there are aggressive actions to the down side. $1725 has already been hit, almost a $100 sell off in the last several days, a correction upwards now appears underway.

Gold - Short and Medium Term Updates

Gold continues to drive higher - but the wave structure says otherwise: Be very cautious.

Gold has broken through some anticipated levels, however, with wave 'iii' complete and wave 'iv' looking almost complete - time is running out. MACD is expected to be at an extreme at the end of wave 3's - which is the case here. Another push higher to around the 1800 levels is needed to complete wave 'v' of '(v)' and will probably break thru the upper channel line in a 'blow off'.

On the Medium term, Gold has overthrown the medium term upper channel line with obvious weakness shown on the MACD price oscillator. A significant reversal is anticipated on the coming days or couple of weeks.

XAO - Next major leg down underway?

From the previous XAO post - clarity would soon be shed on the XAO medium term direction and it's not good news.

In fact, this leg down could be very aggressive - Over two years ago this October 2008 post (on ASF) for the long term view provided some rough guidance on how the XAO would play out over the coming years: wave 'A' circle to complete, a corrective wave 'B' Circle to unfold, and once completed 'GFC II'  aka wave 'C' circle would be unleashed.....However, wave 'B' Circle took a lot longer to unfold as a more complex correction.

October 2008 View - zig-zag correction on the XAO

XAO Short Term View
The short term view is for 5 waves down to unfold before the first major bounce occurs. The MACD is at an extreme, implying the end of wave '3' down is complete. It is assumed a triangle will unfold for wave '4' that will see sideways action for 2-3 weeks before another push lower to complete this first of a series of 5 wave declines.

The social mood will continue to decline dragging the stockmarket with it - riots in Europe are a precursor to bigger things to come.

August Gold Rush

Gold's push higher has been aggressive and it may soon be time for a breather as wave 'iii' soon completes and a wave 'iv' decline sets in. Gold is anticipated to break1700 and head higher still perhaps to the 1750 levels before the instability commences.

XAO Bullish and bearish views

Whichever way the XAO decides to move for the medium term trend, we should know fairly soon....

Both scenarios are of equal consideration at this stage and both are not perfect either. However, further aggressive downside moves should elimate the bullish view quite quickly until the larger pattern provides clarity.

The bearish view is significant as it implies a major turning point on the XAO. aka wave C circle down

XAO Update

A short update - The XAO continues to be erratic, but I sense there is still weight behind an ending triangle, although larger in formation. Dropping temporarily below 4500 will be acceptable whilst the remaining triangle waves complete.

XAO Update

As discussed yesterday, breaking below the recent low would invalidate the short term count for an ending triangle - this has now happened. The larger move downwards is still corrective and the expectation is for further corrective action to the downside - perhaps bouncing on 4500 first. More charts later.

XAO Short term update

It looks as though the end of wave C has still been unfolding as a larger triangle - from this post: "however there tends to always be a challenge with triangles and how they play out" - hence the formation over the last few weeks indicates a larger triangle has played out as the end of wave C down.

This larger triangle should have now ended and must not fall below 4508 for the short term count to be valid - a corrective push up to the 5000 levels should soon commence. The count from the previous post could still play out - but either way, a push higher is now the required short term view.

GOLD - Holding the Fort at the 1600s

Gold's rapid completion of the final D and E waves within the larger wave (iv) triangle and breaking the 1600 levels as described back in May now has the bulls paused at just under 1600 - so what's next?

A 4th wave triangle always indicates an impending change in trend - this could be in the form of a minor correction, or as in this case a much larger corrective move.

Perhaps Gold news could kick off a decline although events rarely influence market moves since it is the social mood from the herd that drives markets.  Bad news in bull markets is usually shrugged off, but as the mood turns, and the market falls - bad news isn't shrugged off so easily. Perhaps Ron Paul knows something we don't? Ron Paul worries Fort Knox gold is gone


The short term chart has a couple of interpretations. The first is the ending of wave E within the Triangle. If it's the Green E, then it appears an ending diagonal is forming and the ending of the Gold bull market may not be far away - this is a loose statement at the moment as channel lines, estimated targets need to be taken into consideration.


The Second, if the wave (iv) Triangle finished at the Black wave E, then it appears a 5 wave move upwards has completed and a small wave 'ii' down is underway - this is the pullback one expects when hitting/breaking psychological levels. The preference is for the black count to be the primary view at this stage with a view to heading up to the 1640-1650 levels.


Once wave 'ii' down gains some footing, we can establish some channel lines and bullish targets. A break below the black wave 'E' at 1520 would certainly be a bearish signal.

GOLD update

As covered in previous gold posts, gold has headed higher to the 1600 level since a 4th wave triangle completed and sees Gold at a new high. A small pullback may be needed at this psychological level, but it must not drop below 1540 which could indicate a significant top is in.

Gold is anticipated to break thru the 1600 levels and head higher over the coming weeks. Charts later....