Optimism high, certainty low

By Colin Twiggs
December 3, 2016 2:00 a.m. ET (6:00 p.m. AEDT)

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United States

Optimism may be high but certainty is low. Initial euphoria over the election result is now fading as the enormity and complexity of the task facing president-elect Trump starts to sink in. Whether he and his team are up to the task only time will tell, but it will not be a smooth ride.

On the economic front the biggest task will be to lift sagging economic activity — highlighted here by declining manufacturing orders — without raising inflationary pressures too fast.

Dow Jones Industrial Average is doing well, having broken resistance at 19000. But the initial strong move has now faded and declining 21-day Twiggs Money Flow indicates short-term selling pressure. Expect retracement to test the new support level at 19000. Respect would indicate an advance to 20000*.

* Target medium-term: 18500 + ( 18500 - 17000 ) = 20000

The S&P 500 weekly chart shows hesitation at 2200, while declining 13-week Twiggs Money Flow signals long-term selling pressure. Retreat below last week's candle would warn of another test of primary support at 2100.

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

This country has nothing to fear from the crooked man who fails. We put him in jail. It is the crooked man who succeeds who is a threat to this country.

~ President Theodore Roosevelt (1905)