Good morning and welcome to this week’s Flight Path. Equities see the “Go” trend continue this week but we do see weaker aqua bars appearing as the week progresses. Treasury bond prices paint a complete week of strong purple “NoGo” bars as the new trend appears here to stay. U.S. commodity prices paint strong blue bars for most of the week as the trend has returned after the uncertainty we saw a few weeks ago. The dollar has shown weakness this past week with a string of aqua “Go” bars. We will watch to see if this leads to any deeper corrections or trend change.
$SPY “Go” Trend Struggles to Make New High
The GoNoGo chart below shows that the “Go” trend has continued this week but has been unable as yet to make a new higher high. After painting mostly strong blue bars last week the week closed with weakness. We turn our eye to the GoNoGo Oscillator in the lower panel and we see that it is in positive territory but did not get near being overbought. It will be important that the oscillator remains in positive territory and finds support at zero if needed for the “Go” trend to continue.
The weekly chart shows that on the longer time frame the trend remains in place with small but strong blue “Go” bars as price threatens to make another higher high. GoNoGo Oscillator has found support at zero and is now at a value of 2 telling us that momentum is aligned with the “Go” Trend on the weekly timeframe.
Treasury Rates Recover To Paint Aqua “Go” Bars
GoNoGo Trend paints weaker aqua bars as a new “Go” trend propel rates to an intermediate high. GoNoGo Oscillator was able to quickly recover positive territory and so now we have momentum resurgent in the direction of the new “Go” trend. We will watch to see if rates move higher from here.
Dollar in “Go” Trend Painting Weakness
The chart below shows that the dollar remains in a “Go” trend however we are seeing continued weakness with a string of aqua “Go” bars as price tries to stabilize at prior lows having fallen from the recent high. GoNoGo Oscillator is in negative territory having already retested that level and found it to be resistance. It will be important for momentum to recover and break back into positive territory for this “Go” trend to continue.
Oil Paints Weakness and Uncertainty
GoNoGo Trend shows that the markets are struggling to determine direction for Oil. We saw another amber “Go Fish” bar amid weak pink “NoGo” bars last week. GoNoGo Oscillator has nudged its way into positive territory but is again back at zero and so we will watch to see if it can find support here to help us determine its next direction.
Gold “Go” Trend Consolidates
The chart below shows that the “Go” trend remains and the indicator has been able to paint strong blue bars as price consolidates its recent gains. GoNoGo Oscillator is in positive territory but falling toward the zero line. We will pay close attention this week to see if it can find support at zero which we know would confirm the trend in price. If the oscillator can rally back into positive territory then we would see signs of Go Trend Continuation.
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. 2 sectors are in relative “Go” trends. $XLE, and $XLV are painting 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 RelMap that $XLE is out-performing sector and paints strong relative “Go” bars. When we look at the below RelMap we can see that the exploration and production index in the second panel is painting strong blue “Go” bars on a relative basis.
$PARR Looks For Help in “Go” Trend
GoNoGo Trend shows that price has been in a “Go” trend since late August. After a series of higher highs and higher lows we spot momentum divergence with price climbing and GoNoGo Oscillator making lower highs. This is a critical juncture here with GoNoGo Oscillator testing the zero line from above. It will be important for the health of the “Go” trend for the oscillator to rally back into positive territory. If it fails to hold the zero line we will watch out for a deeper correction and possible trend change in the panel above.
$DK Enters New Trend On Neckline Break
Even in a strong outperforming index we can spot outliers. GoNoGo Trend paints a first purple “NoGo” bar for $DK as price falls through horizontal support after first painting an amber “Go Fish” bar. This comes a bar or two after GoNoGo Oscillator broke out of a Max GoNoGo Squeeze into negative territory. Now, with a new “NoGo” and GoNoGo Oscillator falling into negative territory we have price and momentum aligned. We will watch out for price to fall further in the coming days.
