Yes - I have indeed changed my view in the past 1-2 weeks.
I suggested XAO 3960ish was the bottom, as at that point, the index had fallen to the bottom of the next channel down and I didn't believe it could fall any further (ie. down a 2nd channel width - or about 900 points).
What's happened since is we have fallen below that level. Now, this could still be just a false break and we have indeed bottomed at 3690. However, aside from the comments I made above, there's a few other indications that I believe indicate we probably have a little further downside.
1. XAO has a H&S base at 5000. Now if we treat the top as 6450, that suggests a target low of 3550. Alternatively, if we use the 6750 "false" top (closing price high), that suggests a target low of 3250. My preference is to use the "true" top of 6450, so from this I get 3550.
2. The lower bollinger band on the daily chart is just starting to loop under the XAO at a level of about 3550, so this suggests the bottom will probably be around that level or above. Now, its quite possible we go sideways (or even a little upwards) until the bollinger bands contract. However, I'm more inclined to think we'll test the EMA now and then drop to the lower bollinger level as the bottom. So from this I get 3550 as a likely bottom.
3. The initial fall from the 6450 level in Dec 07 to 5130 was 1320 points. We then fell about 1180pts from 6060 to 4880 and fell another 1310pts from 5250 to 3940. Last, we had the bounce to 4400. If we drop another 1300pts that gives us a target (at the bottom of the next channel down) at 3100. If we only fall half a channel (about 450pts wide), we get a target of about 4000-450=3550. So again 3550 as a likely bottom.
So, all the targets above suggest 3550. Or, less likely, if we drop again when the bollinger bands contract, about 3100-3250.
Above I suggested 3450 (not 3550) on the basis that 3940-(3940-3690)=3450 (and also it is 50 fib level from 6400 to 1979 index base of 500). Well, 100pts extra on a spike down capitulation is certainly possible. Either way 3450-3550 stills seems most likely in my reasoning.
No guarantees - we may have bottomed - but there's my view and my reasoning.
(20min delay)