Good morning and welcome to this week’s Flight Path. The equity trend remained for another week and we saw strength return with bright blue bars at the end of the week. Treasury bond prices remained in a “NoGo” but the past week saw an uninterrupted string of weaker pink bars. U.S. commodities maintained the “Go” trend that they were in and indeed we see a strong blue bar close the week. The dollar continued in its “NoGo” trend but we do see weakness as the GoNoGo Trend indicator painted consecutive weak pink bars as the week ended.
$SPY Sees Strength Return With Bright Blue Bars
The GoNoGo chart below shows that the “Go” trend continues this week and after several weaker aqua bars we see that strength has returned in the form of bright blue. This comes as price finds support from prior highs. GoNoGo Oscillator is testing the zero line from below and it will be important to note whether it is able to regain positive territory. If it does, that would tell us that momentum is resurgent in the direction of the “Go” trend and be a positive sign.
The weekly chart shows that the “Go” trend continues and we saw another strong blue “Go” bar as price remains elevated. GoNoGo Oscillator is in positive territory but not overbought at a value of 3. We will watch to see if price can make a new higher high on the longer time frame chart.
Treasury Rates Remain in Strong “Go” Trend Near Highs
GoNoGo Trend shows that although rates action has moved mostly sideways for several weeks the indicator is still painting a mix of aqua and blue bars. We look to the oscillator panel and we see that it continues to primarily find support at the zero line even though it did dip into negative territory for one bar it is now back above the zero level. We will watch to see if this gives rates the push they need to climb higher this week.
Dollar ($UUP) Stays in “NoGo” but Tries to Rally
The chart below shows that the “NoGo” trend remains in place although we see prices rising sharply on weaker pink bars for the second part of last week. GoNoGo Oscillator rose to challenge the zero line from below and then was able to break through it into positive territory. This tells us that momentum has changed and is now out of step with the “NoGo” trend. Should it stay this way, we will expect pressure on price to change trend.
$USO Shows Uncertainty with Amber “Go Fish”
GoNoGo Trend shows that the “Go” trend has faltered and we saw first several bars of weakness and then an amber “Go Fish” bar of uncertainty as the trend fails to take a strong hold. GoNoGo Oscillator has quickly returned to test the zero line from above and we will watch to see if it finds support at this level. If it does, that could help the “Go” trend return.
Gold ($GLD) “Go” Weakens with Aqua Bar
The “Go” trend hangs on but we see an aqua bar as price falls sharply on the last bar of the week. GoNoGo Trend paints an aqua bar after the Go Countertrend Correction Icon (red arrow) at the recent high. GoNoGo Oscillator has fallen sharply to test the zero line from above on heavy volume. We will watch to see if the oscillator finds support at this level. If it is able to bounce back into positive territory then we would know that momentum is still in line with the “Go” trend.
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. 4 sectors is in a relative “Go” trend. $XLE, $XLF, $XLB, and $XLV are painting blue relative “Go” bars.
Energy Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the energy sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLE. We saw in the above GoNoGo Sector HeatMap that $XLE is painting relative “Go” bars. When we look at the below RelMap we can see that the coal index in the 5th panel has been painting strong “Go” bars on a relative basis.
$SXC Breaks To Higher Highs
The GoNoGo Chart below shows that $SXC has broken above horizontal resistance in its new “Go” trend. This comes after a clustering of Go Trend Continuation Icons (green circles) suggesting that momentum continued to be in line with the “Go” trend. With the oscillator finding support at the zero line, this gave price the boost it needed to break through to higher highs. Now with GoNoGo Trend painting bright blue bars, we will look for price to consolidate at these higher levels in the coming days and use prior resistance as support if necessary.
$HCC Looks to Break through to New High
The chart below shows $HCC is struggling with overhead resistance and as yet has not been able to burst through unlike $SXC in the previous chart. Price is in a strong “Go” trend and we see that it has run up against prior high resistance. GoNoGo Oscillator is in overbought territory and has been elevated for several bars. This suggests maintained market enthusiasm in the price movement. We will watch to see if price can break higher in the coming days.
