• The stock market began to slide on Tuesday after hitting key resistance level which we mention on our report on 1^st June
• The largest decline occurred on Thursday when the Dow Jones Industrial Average fell below 26,000 psychological level.
• Price recovered slightly on Friday but key levels remain untested.
• Elliott wave analysis suggests that there will be a slight rebound before selling remerge.

After the index has reached 78.6% Fibonacci retracement of wave W (highlighted in purple). The stock will now enter into the third and last phase of the double three which is a zig-zag.

Should price break above the crucial resistance zone between 28,889 and 29,548, the whole double three formation will be invalidated.

*Double three is a complex corrective wave which consist of Flat, Any Three and Zig-Zag

The index reversed slightly above 78.6% retracement level as expected by our report on 1^st June after breaking the 161.8% extension level. Despite the strong sell-down, the index remains supported at the resistance turned support level at 24,600 – 25,231 with a long-legged doji in place. We should see some upside nearing 26,000 forming sub-wave (ii). Mid-term Potential rebound level is between 20,761 and 21,509.

*Should the bulls breaks above the resistance at 78.6% retracement level, the price is likely to make one last attempt to reach 88.6% retracement level at 28,274.11

S&P 500 almost touches the 88.6% retracement level of wave A (between 3,393.52-2,191.86) but it fell short of and reversed subsequently. This indicates that the bulls lack the momentum for the next 2 days despite a full bodied bullish candle on last Monday. Despite the sell-down, prices find itself to be supported by the 200-day period moving average and stay above the support zone between 2,981.00 and 2,934.39.

Similar to the Dow Jones Industrial Average, the index is likely making a pullback nearing 3,100 to form sub-wave 2 of the zig-zag wave before a sell-down. 

Nasdaq Composite finally broke the 10,000 level mark after prices successfully crossed the resistance zone between 9,199 and 9,390. However, Nasdaq swiftly reversed at 10,081 on Wednesday after forming a Doji, sign of weakening momentum. True enough, Nasdaq faced a strong sell-off on Thursday.

Despite the sell-off, the index rebounded and managed to close above the key resistance turned support zone on last Friday. Our view of an expanded/running flat is still on unless the index fell below 8,500 level, then the index will form a regular flat instead.

Our analysis on Facebook Inc on 9^th June played out accordingly. The only regret was we missed our target price by US$4.00. Despite that, the stock managed to stay afloat above the support zone with a hammer formation on last Friday.

Chart pattern suggests a potential ascending triangle with the resistance level at US$241.48. Breaking it will see price testing a new high at US$250.00.

Microsoft has met our target price based on our report on 9^th June 2020 and a pullback was followed thereafter to test the top of the ascending triangle. Last Friday saw the stock stay supported at the support zone 1 which confluence with the previous top of the ascending triangle and 61.8% Fibonacci retracement level of US$176.60-US$198.52. As the bullish momentum wasn’t that strong on Friday, there is a possibility that Microsoft may test the next support level at 78.6% of US$176.60-US$198.52.