Weekend Stock Market Analysis for June 10th

The major averages have been in a correction during the past five weeks. The Dow has dropped around 900 points or 7.8% since peaking in early May and failed to hold support at its 40 Weekly EMA (blue line) this week. If the Dow remains under more selling pressure the next area of support appears to be at its 50% Retracement Level (calculated from the October 2004 low to its most recent high) near 10700. The 10700 level is also where the Dow found support at in the late part of 2005 into the early part of 2006 as well. If the Dow fails to hold support at the 10700 level then the next downside support area would be just below 10500 which corresponds to its 61.8% Retracement Level and upward sloping trend line (brown line) originating from the October 2004 low.

Meanwhile if the Dow attempts to bounce from oversold conditions next week look for its first level of resistance in the 11000 to 11200 range. The 11000 area is where the Dow's falling 20 Day EMA (blue line) is nearing and is also where the 38.2% Retracement Level (calculated from the early May high to the most recent low) is close to as well. Meanwhile the 11200 area is where the Dow's 50 Day EMA (green line) resides at and is also near its 50% Retracement Level.

To read our complete Weekly Market Analysis Report click on the link below.

http://www.amateur-investor.net/AII_Weekend_AnalysisJune_10_06.htm