XAO Short Term Update

The wave count has been updated slightly to take into consideration an 'anomaly' - well, I did say triangles have a habit for tricking. It appears a triangle has unfolded as a wave within the larger triangle itself - thus delaying the commencement of  wave 'd' down. Time wise, wave 'c' can be a long wave within triangles.

Also, RBA Interest rates are on this week - cash rate target is currently at 4.25% and 90 day bill rate has come down to 4.3% (4.45% at start of March). I doubt the RBA will lower rates this month (but there's a slight possibility) since the cash rate target is still under the 90 day bill rate - not by much though. The average gap is 0.15%.

XAO Short Term Update

The sideways correction on the XAO still has some more 'sideways' to go. The last XAO post indicated a possible move down to the 4200 levels (maybe lower to 4150) to complete wave 'd', this appears to be occurring as anticipated, once complete, a push up to complete wave 'e' is needed. This next set of moves should complete one of the largest Double Three Combination corrections seen on the XAO.

The Australian Job market appears to be catching up to the bearish social mood with several major brands announcing job cuts this week. I don't believe the cuts are significant at the moment as I'm expecting a much larger round of cuts if the market falls as anticipated. Major job cuts tend to occur near the market bottom when conditions are the worst.

As for the chart below, the index needs to keep within the approximate boundaries for the time being so waves 'd' and 'e' can complete. A premature push out of the triangle with momentum could be an indication that the short term count is not accurate - or as triangles love to do, create uncertainty.

XAO Short Term Update

The previous post covered Double Three Combination corrective waves and provides insight on what may be unfolding on the XAO right now. The sideways action on the XAO since the beginning of August without any clear 5 wave impulse moves (in either direction) could signify a Double Three correction.

The next steps for the Double Three would be to complete the finishing touches on the triangle (wave y), keeping in mind it's entirely possible that one of the legs in the triangle could be a triangle itself as discussed in the post linked above.

Double Three Combination Corrections

I thought this to be an opportune time to cover Double Three Combination Corrections (there may be a need to brush up on this type of correction very soon)

Double three's are some of the more complex corrections, but if caught early can offer insight to the unfolding wave count and allow one to be in a position to capitalise on the break out. They are usually rare on the larger time scales, but having knowledge of these structures will be useful for when they do occur.

Below is an example of a Double Three on the XAO taking over a month to complete. Without the labels, it can be a little difficult to see. The give away is a long sideways move that consistently moves in waves of 3. Initial interpretations may be a triangle, however, the expected end and break out of the triangle doesn't appear as one expects - leading to several re-evaluations of the wave count.

 

With the Labels added, the double three is clear. There's even a Fibonacci relationship between the waves - although it's not guaranteed every time. A confusing factor in this example was a triangle for wave 'b' '(b)' in the 'c' leg of the Triangle itself.

The larger picture shows the Double Three is the b wave in a zig-zag correction. This whole structure was the A wave in a triangle that formed over several months.