The Australian Resources sector has been on a tear over the last 12 months, something I was slow to pick up on. China’s PBOC stepped in to boost a slowing economy, sending property prices surging. But now the central bank is tightening monetary policy and housing price growth is slowing.
The ASX 300 Metals & Mining Index is losing momentum, falling below its long-term trendline. Declining Twiggs Money Flow, with peaks near zero, warns of selling pressure.
The fall has slowed advance of the ASX 200. Resistance at 5800 is proving stubborn. Breach of support at 5600 would complete a double top reversal, warning of a primary down-trend. But declining Twiggs Money Flow indicates no more than medium-term selling pressure at present, recovery above 5800 is more likely and would signal a test of 6000*.
* Target medium-term: 5800 + ( 5800 – 5600 ) = 6000
Hi Collin, I am not as optimistic about the DOW as you are. I believe that we have a CLOWN in the White House who is showing signs of being in the first stages of developing dementia. I have seen this pattern of behaviour with one of my closest friends. Although extremely intelligent she started to blame everybody else when things she did not like on others. Trump is doing the same, blaming the Media, the enemy of the people, the Muslims flooding the USA, Obama for leaking and tapping his phones, giving clear signs that he can’t distinguish between facts and fiction. Surely investors will start to ask what Trump stands for and how he is going to deliver on all his promises. So I am staying out of the markets for the moment. I would like to take this opportunity to thank you for your informative articles you have given to us over the many years. Kind regards, Konrad
Thank you Konrad,
The market seems to believe that Trump can do some good. I have my doubts.
But the economy shows signs of emerging from a decade of stagnation and perhaps will succeed despite his best efforts.