XAO Short Term Update

The 4000 level is almost upon the All Ordinaries and the possibility of a bounce is increasing with a divergent MACD and strong support levels at 4000 and 3940.

Both these target levels represent Fibonacci ratios of wave 'iii' circle as described below in the chart. MACD divergence is covered in more detail in this post and it is usually a very good indicator for determining the endpoint of wave 3's.

There is a possibility that wave 'v' circle down is complete and would mean wave '1' down is complete.

 

Short Term XAO update

The last XAO short term post indicated the end of wave 2 was imminent, however, an aggressive push downwards has failed to materialise to indicate the next leg down is clearly underway. The wave structure does also not appear to be moving in 5 waves down (yet) and this evidence implies wave 2 is unfolding as a flat correction.

At this stage in the wave development, the structure of wave 'a' and the unfolding 'b' wave appear to be 3 wave moves, indicating corrective action in both directions for the short term. This most likely indicates a flat for wave 2 is in the process of unfolding. 

Gold - Is the top in?

For those that have been following along, a significant top in Gold has been expected and the question now is: Is the top in?

It appears a  5 wave decline from the "Top" has occurred and more aggressive downside action needs to occur soon, thus completing wave '2' up. The long term chart is here and provides a multi year view. As you can see, gold broke above the top  multi-year trend channel and instability quickly set in with a $200 decline - however, Gold is yet to drop back down to that trendline. This is anticipated very soon.

XAO Short Term update

It's been a long time coming.....

The current wave up is being interpreted as a wave '2' for the reasons outlined in the chart. A break below the trend-line is anticipated very soon. The XAO cannot go above the end of wave 'E' in the chart as this would invalidate the short and medium term views. We therefore have a very defined scope of where the index is allowed to go before breaking specific limits one would put in place to manage risk.