XAO Short term update

The XAO bearish short term count needs to be approached with caution since the expected aggressive downside action has failed to materialize. What is apparent is either a smaller wave 'ii' flat that has now completed with the bears moving back in or, a large wave '2' correction that could be a double combination correction and has further sideways to go that will take it into Mid-Late Jan in 2012.

Complex Corrections

Corrections are by far the hardest to predict as their nature is usually unpredictable unless some obvious  portion has already completed. However, there may still be further corrective action at hand once a corrective wave appears complete. Double combinations fit this description and they can contain a triangle for the ending wave structure. Identifying this triangle will help to understand the next move when complete.

Many Elliott Wave analysts will incorrectly assume the triangle is actually part of the next wave sequence (eg 1st and 2nd waves) or a wave 4, thus the count will be incorrect. Triangles appear regularly in corrections and it's beneficial to understand when and where they can occur.

GOLD update

In the previous GOLD post, discussion of a top in the precious metal was reviewed with it's basis on a completed or completing 5 wave thrust that commenced in 1999.

On the very short term 30min chart, it doesn't appear that a significant decline is underway, however, a decline does appear to be unfolding perhaps down to the 1450-1400 levels. This decline may form a 4th wave triangle before moving to new highs and would take some weeks to complete.

On the daily chart (not shown) the count doesn't look complete either, hence a correction now, then a push to new highs to form a significant top is anticipated.