Dow dropped a total of 3,939 points or 13.42% from 29,348 to 25,409 within 7 trading days because of the seemingly out of control coronavirus worldwide. A whopping US$6 trillion evaporated globally within these few days, with US market alone accounted for US$4 trillion.
From the chart, if Dow can make a U-turn from this level, then the current drop could be the major wave 10, a most optimistic scenario. The next run-up will be the major wave 11.
But the World Health Organization (WHO) has just increased its risk assessment of Covid-19 to very high as the total number of reported new cases of Covid-19 outside China started to surge, especially in South Korea, Italy and Iran. The number of countries affected has gone up to 50. Under these circumstances it is very likely that Dow is going to go much lower than last Friday closing of 25,409.
A more pessimistic scenario is a 25% mega wave (2) correction to around the major wave 8 level of 21,792, another about 3,600 points to go.
And if Covid-19 outbreak finally develops into a pandemic, Dow is likely to go as low as 14,600 level for a 50% pullback. That means Dow has just completed its super wave VII and the current correction is the beginning of its super wave VIII pullback.
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