Dow dropped 603 points (-2.09%) on Friday as the coronavirus has brought China to a standstill that fanned fears the outbreak will escalate into a global economic slowdown as China is the second largest economy in the world.
From its peak of 29,348 on January 17, Dow has dropped 3.7%. If coronavirus is in fact a black swan event, the worst case scenario is the ending of Dow's mega wave VII at 29,348 level. The mega wave VIII is likely to bring Dow to as low as 15,000 level for a 49% correction.
However, if China is able to contain the coronavirus outbreak within a reasonable period, then the January 17's peak may not be the end of the mega wave VII. Then the current correction can be a lower degree major wave 10 correction of about 14.8%. For this scenario mega wave VII has more that 9 waves.
A most optimistic scenario but is also a very unlikely scenario at this moment is a wave vi of the major wave 9 correction. But a more than 800 points drop next week can straight away rule out this possibility.
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