Now that the election is over, how it's going?

 

In my entry 2 weeks ago titled US election is right around the corner..., I maintained a bearish opinion on Dow Jones while indicating the possibility of bullish surge after the election, which is a common phenomenon, I mentioned of a resistance at 44,932, Dow reached a high of 44,163 on the week of election and 44,496 this week before retreating. 

I have also mentioned in my entry that US is in a phase of distribution based on technical analysis concept. Trump's win may be able to reverse the status quo. It really depends on the will power the people to look forward instead of demanding equality of result. 

Road ahead for Trump's team is hard. At least for the time being, they are heading in the right direction, which is to tackle the deficit. Introduction of DOGE will help in reduction of overhead in the government to improve efficiency leading to cost saving. However, this indirectly means that Trump's team will be implementing austerity measure, which great for the long run, it is hard for the people in the short run. But again, will power. 

Trump does not have much time, because the measures that his team going to introduce is not going to be pleasing to the people. These will be hard measures requiring the team to bulldoze through. They in fact only have 2 years to achieve their goals instead of 4 years. Because if it is not properly managed, people will turn on them faster than they do on Biden and Kamala.

So where might Dow be heading next?

Fig 1. Dow Jones weekly chart

The bar formation these 2 weeks did not create any reversal candlestick formation. I do not see a reversal and it may be more of correction or congestion the coming week, with support likely to be between 39,456 to 42,740.

Having said that, while Dow Jones reached a higher high, its MACD did not. This leads to potential divergence indicating weakness in the Dow's climb.

Furthermore, the gradient of its latest ascension is more gradual as compared to that from the previous one. It is actually slowing down.

We may still see Dow hitting higher, though. It is in between supports and resistance levels as far as I can see. Its most immediate resistance is the 100% of its short run projection at 44,968. Crossing this will be its long run 100% projection resistance at 47,371. I believe the later will be a more likely possibility for reversal because it also coincides with the intermediate 127% projection.