Last night I explored the topic of fissures. Now, I muse on this lizard as he decides whether or not it best to stay in the light or dive for the nearest fissure.

A logical conclusion post-election in the market appears to err on the side of U.S. domestic growth (The Modern Family celebrates). After all, campaign promises support changing times a comin’.

Market money, since November 8th, speculates on a future of decreasing globalization, free trade, and global connectedness for an increase in US growth, higher inflation, and rising bond yields.

That should keep our domestically grown species of lizard in the light. Nonetheless, many traders try to reconcile promises from future reality.
Rotation into small caps and banks in particular, happened really quickly. Makes sense if you believe the government will decrease regulations and increase manufacturing.

However, like our lizard ascertaining whether he should dive into the fissure or not, I pose two questions to you and myself.
First, if simple supply and demand as a result of growth forces commodity prices higher while the dollar also gains and the yields rise, is stability sustainable? Doesn’t a stronger dollar make imported products more competitive?

Secondly, if policies turn towards manufacturing and infrastructure in the way the market action recently suggests, what happens to globalization, technological innovation that keeps the US on the world stage and the elephant in the room-foreign policy?

In other words, what will force our sun soaked lizard to dive for the safety of the fissure?

Mind you, posing questions and trading plans may be mutually exclusive. I see no reason any active trader should not follow the money. Actually, asking too many questions can stymie a trader, especially those who have adept technical analysis skills.

However, I do find some skepticism healthy for the long view. For example, how realistic is bringing back manufacturing jobs given the ongoing trend towards automation? How about minimum wage? Will middle America accept low wages? And if the minimum wage increases, how much spending will these policies require?

Furthermore, how much monetary aid should the government give for education, particularly the vocational kind? And which fields should we train folks for-oil and gas exploration? Alternative energy? Technology R & D? Health care? All of the above?

On foreign policy-are we heading into isolationism? Can we realistically? Then, what happens if the unthinkable occurs-terrorism on our soil? Do we fight? And how?

Basically, the best I can assess based on everything I read and see is an exponential increase in spending all around. That of course, opens a Pandora’s box. Let’s see-increased government spending and lower taxes. Hmm.

So yes my dear lizards-bask away. But as always, have a strategy and a plan. Like our lizard, basking near a fissure may not be the worst idea.
Caveat Emptor-I am an inquisitive armchair economist and technical trader.

S&P 500 (SPY) 218 now the pivotal point

Russell 2000 (IWM) Less volume today. Amazingly, 128.30, yesterday’s low held and remains pivotal.

Dow (DIA) 187.40 big support. It took a week to rally 900 points and one hour to drop 900 points a week ago-Fascinating! 19k will be interesting

Nasdaq (QQQ) 117.30 pivotal resistance and the 50 DMA.

KRE (Regional Banks) 50 key support

SMH (Semiconductors) 67.54 pivotal support and 69 Pivotal resistance

IYT (Transportation) These crazy volumes and runs to new highs are incredible but not ones to chase now

IBB (Biotechnology) Inside day. 290 pivotal and 300 big time resistance

XRT (Retail) 44.25-44.40 pivotal area. 46.00 substantial resistance

IYR (Real Estate) reversal pattern. 74.20 good tight spot to hold

GLD (Gold Trust) Like 117 as a pivotal point for Wednesday.

GDX (Gold Miners) Confirmed a reversal bottom-question is can it see 25 again?

USO (US Oil Fund) Gap higher, confirmed reversal. Resistance at 10.60-10.80

TAN (Solar Energy) Not ready yet

TLT (iShares 20+ Year Treasuries) 123 next point to clear with 120.15 point to hold

UUP (Dollar Bull) 25.80 pivotal