Good morning and welcome to this week’s Flight Path. Equities see the “NoGo” take hold with a week of pink and purple bars with strength appearing at the end of the week. GoNoGo Trend shows that the “Go” trend in treasury bond prices sticks around but the indicator paints a string of weaker aqua bars. U.S. commodities are painting bright blue bars again this week as the “Go” trend remains strong. When we look at the dollar, we see that it is in a new “Go” trend which strengthened after painting a weak aqua bar at the beginning of the week.
$SPY Settles into “NoGo” Trend
The GoNoGo chart below shows that the trend is now a strong “NoGo”. We saw that after several pink bars the trend strengthened as the week progressed and now we see strong purple “NoGo” bars as price tries to consolidate at new lows. The oscillator panel shows that GoNoGo Oscillator repeatedly found resistance at the zero line over the last few weeks and most recently it was turned away from that level again on heavy volume. This has given another NoGo Trend Continuation Icon (red circle) above the penultimate price bar suggesting further downside pressure with momentum resurgent in the direction of the “NoGo” trend.
The weekly chart shows that on the larger time frame we have lost momentum support. While GoNoGo Trend paints another weaker aqua bar as price fails to go higher, we see GoNoGo Oscillator is breaking through the zero line on heavy volume, unable to find support at this level. With momentum now out of step with the weak “Go” trend, we will watch to see if this leads to a deeper correction in the price panel above.
Treasury Rates Flash Uncertainty
GoNoGo Trend shows the trend is threatened as the indicator paints a small amber “Go Fish” bar of uncertainty. This comes after a string of weaker pink “NoGo” bars as price rallied from the low just over a week ago. After that low, we saw a NoGo Countertrend Correction Icon (green arrow) indicating that price may struggle to go lower in the short term. As the oscillator rallied to test the zero line from below we see that it broke through into positive territory. This tells us that momentum is no longer negative and we will watch to see if there is a trend change in the panel above.
Dollar in “Go” Trend at Highs
The chart below shows that the dollar entered a new “Go” trend at the beginning of the last week and was able to hit higher highs on strong blue “Go” bars. We do see that after that initial gap higher we have a Go Countertrend Correction Icon (red arrow) and that tells us that price may struggle to go higher in the short term due to waning momentum. We will watch to see if price finds support at the horizontal level from prior highs that we see on the chart. As GoNoGo Oscillator approaches the zero line it will be important for it to remain at or above the zero line finding support if it reaches zero.
Oil Flies Higher in “Go” Trend
GoNoGo Trend shows that the “Go” trend has seen price race to higher highs with each daily close last week. On the final bar of the week price gapped higher again. We look at the oscillator panel and we see that GoNoGo Oscillator has quickly moved into extreme overbought territory and it has remained at an extreme of 6 for several bars now. We will watch to see if momentum remains elevated in the coming days.
Gold Sees the Trend Remain
The trend in Gold stuck around for another week however we do see a bar of weaker aqua as price tries to consolidate at a new higher low. Looking at the oscillator panel we see that GoNoGo Oscillator has fallen to test the zero line from above and it will be important to watch to see if it finds support at this level as it has done now for several months. Should it rally back into positive territory then we will see a Go Trend Continuation Icon (green circle) indicating that momentum is resurgent in the direction of the “Go” trend. This will give price a chance to make a run at another new high.
Sector RelMap
Below is the GoNoGo Sector RelMap. This GoNoGo RelMap applies the GoNoGo Trend to the relative strength ratios of the sectors to the base index. With this view we can get a sense of the relative out performance and relative underperformance of the sectors. 7 sectors are in relative “Go” trends. $XLC, $XLE, $XLI, $XLB, $XLP, $XLU, and $XLRE are painting relative “Go” bars.
Communications Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the communications sector again this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLC. We saw in the above GoNoGo Sector RelMap that $XLC is a new out-performing sector and paints strong relative “Go” bars. When we look at the below RelMap we can see that the mobile telecommunications index in the 5th panel is painting strong blue “Go” bars on a relative basis.
$TLSNY in “Go” Trend Looking for Support
GoNoGo Trend shows that $TLSNY has been in a “Go” trend for several months. We have seen a series of higher highs and higher lows as price paints aqua and blue bars. During this time, GoNoGo Oscillator has been supported by the zero line, bouncing back into positive territory each time that level has been tested. After the most recent high, we see Go Countertrend Correction Icons (red arrows) suggesting that price may struggle to go higher in the short term. Indeed, we have seen weaker aqua bars as price has fallen from the high. GoNoGo Oscillator has also fallen to test the zero line from above and we see that it has remained at that level for a few bars. We will watch to see if it regains positive territory. If it does, we will know that momentum is resurgent in the direction of the trend and we will look for price to challenge for new highs.
$SKM Searches for Support in “Go” Trend
$SKM has been in a “Go” trend that saw price explode out of a period of relative dormancy. Multiple gaps took price soaring to higher highs and higher lows until price climbed above $33. At that high, we saw a Go Countertrend Correction Icon (red arrow) indicating that price may struggle to go higher in the short term due to waning momentum. Indeed, price has fallen from that high, all the way to the upward sloping trend line that we see on the chart. If we turn our attention to the oscillator panel, we see that GoNoGo Oscillator struggled with the zero line and is now breaking out of an extended Max GoNoGo Squeeze into negative territory. It is not a good sign for the “Go” trend that momentum is now out of step, in negative territory on heavy volume.
