Notice that the drop from the Oct 12 high has been significantly shallower and choppier than the drop from the Sep 3 high. I take this as a sign that the drop from Oct 12 is just a corrective wave within the rally from the Sep 24 low.
On Thursday, Oct 22, the Dow rallied off the 38.2% Fibonacci retracement level of the advance from Sep 24 to Oct 12. I don’t know if we have seen the bottom of this drop yet, but I still think it is unlikely to exceed the 61.8% retracement level at 27,461.
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