Fedex surge signals expected rise

By Colin Twiggs
November 19, 2016 2:00 a.m. ET (6:00 p.m. AEDT)

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United States

Bellwether transport stock Fedex surged to a new high this week, signaling an expected rise in economic activity in the US. A Twiggs Money Flow trough above zero also indicates strong buying pressure.

Dow Jones Industrial Average is testing resistance at 19000. The doji star indicates indecision rather than a reversal. Declining Twiggs Money Flow indicates long-term selling pressure but completion of a trough above zero would negate this. A fall below 18500 would warn of a correction. Follow-through above 19000 is less likely but would indicate a fresh advance.

* Target medium-term: 18000 + ( 18500 - 17000 ) = 19500

The S&P 500 is testing resistance at 2200. The evening star pattern again indicates indecision rather than reversal. Breakout would complete a bullish inverted scallop pattern, which commenced in early July, signaling an advance to 2300. Declining Twiggs Money Flow remains bearish, favoring another retracement.

* Target medium-term: 2100 + ( 2200 - 2000 ) = 2300

Australia

The ASX 200 is again running into resistance, signaled by a hammer after the recent rally. In terms of Dow Theory, the primary down-trend is intact but retracement that respects the former primary support level of 5200 would suggest a bear trap. Recovery above 5500 is still in doubt but would offer a bull signal.

ASX 300 Banks Index broke out above 8000 but this week's short candlestick body warns of hesitancy. Expect retracement to test the new support level. Failure of support would warn of a bull trap. Respect of support is as likely, however, and would confirm a primary up-trend with a target of 8800*. Recovery of Twiggs Money Flow above zero is still tentative at this stage.

* Target medium-term: 8000 + ( 8000 - 7200 ) = 8800

In the history of mankind many republics have risen, have flourished for a less or greater time, and then have fallen because their citizens lost the power of governing themselves and thereby of governing their state; and in no way has this loss of power been so often and so clearly shown as in the tendency to turn the government into a government primarily for the benefit of one class instead of a government for the benefit of the people as a whole.

~ President Theodore Roosevelt (1903)