2010-09-29_1858_DJ_1min_Flat_and_Double

As we mentioned in our evening update, action on Wednesday did little to clarify direction. On a one minute chart we have highlighted several waves that could count out as five-wave impulses. The middle of the three is the one which causes trouble being bearish. We could have tried to to use the five waves up as the C wave in a flat correction, but we subsequently put in a higher high above that level, so if it was part of a bearish correction, then it would likely be a double zig-zag as shown. Please note, WE ARE NOT ENDORSING TRADING BASED ON THIS COUNT. It is an illustration of how one might count this as bearish. In situations like this we need to use future price action to tell us we need to find a count like this rather than seeing the possibility and trading based on it.