Dow jumped 204 points (1.6%) on Monday. For the two options that I have mentioned in my previous post to remain valid, in its current rebound Dow should not exceed its previous high of 12,943. In fact its next drop should drop below its Friday low of 12,573.

Under Option 1, wave (i) dropped 1178 points. If wave (iii) has the same magnitude as wave (i), the target of wave (iii) is 11,765. However if its magnitude is 1.618 times of wave (i), it can drop as low as 11,037 for a close to 2000 point drop.

Under Option 2, for a simple a-b-c correction, wave c is likely to have the same magnitude as wave a, that will take wave c to around 11,765 level.

However, if Monday's rebound continues for a few more days and can go higher than the 12,943 level, I will have to review Option 1 & 2 and to look for other likely options.

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