Good morning and welcome to this week’s Flight Path. The equity trend continued this week and we saw the indicator painted a string of uninterrupted strong blue “Go” bars as price climbed even higher. Treasury bond prices rallied out of the uncertainty that had engulfed them last week and painted an aqua “Go” bar. U.S. commodities maintained the “Go” trend that has been sticking around and the week closed with an aqua bar. The dollar reverted to the “NoGo” trend that it has been in now for several months. We see a couple of strong purple bars as price fell again.
$SPY in Strong Trend at New Highs
The GoNoGo chart below shows that the “Go” trend hit new heights this week as price climbed higher on strong blue “Go” bars. GoNoGo Oscillator showed that momentum remains firmly in the direction of the underlying “Go” trend having not reached the zero line and not falling below a value of 2 since the low in late June. GoNoGo Oscillator is now back in overbought territories and so we will watch to see if price takes a pause in the coming week.
The weekly chart shows that on the larger timeframe the trend also looks strong. A 5th consecutive strong blue “Go” bar as price moves higher again this week leaving the uncertainty of a few months ago well behind. GoNoGo Oscillator shows that momentum is rising in line with the “Go” trend and volume is heavy. This shows strong market participation in the trend.
Treasury Rates Struggle to Find Trend
After an attempted move back to a “Go” trend we see a mix of “NoGo” and amber “Go Fish” bars this past week. We continue to see rates moving in a sideways range as it has for the past several months. It has been a struggle to find direction of late. We look at the GoNoGo Oscillator panel and we see that it is testing the zero line from above. We will watch to see if it finds support at this level this week.
Dollar Reverts to “NoGo” Trend
The “NoGo” trend returned for the dollar this week. After last week’s uncertainty with a few amber “Go Fish” bars, we saw the trend return this week and paint strong purple bars by week’s end. So far we have failed to make a lower low and GoNoGo Oscillator is testing the zero line from above and so we will watch with interest to see if the “NoGo” struggles again this week. It will be important to watch whether the oscillator stays at or above zero.
Oil Moves Sideways in Weak “Go” Trend
GoNoGo Trend shows price continues to move sideways this week and after an amber “Go Fish” bar we see weak aqua bars painted again. We again note the very extended Max GoNoGo Squeeze in the oscillator panel. It will be very important to note the direction of the break of the Squeeze and that will help us determine price’s next direction.
Which Way for Gold?
Another week another uncertain market for the precious metal. We saw price try to re-enter a “Go” trend but once again fail at prior high resistance and now we see GoNoGo Trend painting amber “Go Fish” bars. GoNoGo Oscillator has crashed to test the zero line from above where we will watch to see if it finds support. If it does, then perhaps price will make another run at those overhead resistance levels.
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. $XLK, and $XLI, are painting relative “Go” bars.
Industrials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the industrials sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLI. We saw in the above GoNoGo Sector RelMap that $XLI has held on to its new “Go” trend and now paints strong relative blue “Go”. When we look at the below RelMap we can see that the commercial vehicles and trucking index in the last panel remains strong as it paints relative blue “Go” bars.
$CYD Fails at Prior High Resistance
Will the “Go” trend survive for $CYD. After a nice run that set price up to challenge the prior highs we saw that it was not able to make a new higher high over the past few weeks. As price trend has weakened, we see paler aqua “Go” bars and when we turn our eye to the GoNoGo Oscillator panel we see that it failed to find support at zero this past week. Now, with momentum negative, we know it is out of step with the underlying trend. We will watch closely this week to see if the oscillator can regain positive territory or if this leads to a deep correction in the price panel above.
$REVG Sets Up for New High?
$REVG has been in a pretty “Go” trend since late April. We have seen a series of higher highs and higher lows and GoNoGo Oscillator has been at or above the zero line finding support at that level for most of the move. After the last higher high, we saw a Go Countertrend Correction Icon (red arrow) indicating that price may struggle to go higher in the short term. Indeed, we then saw GoNoGo Trend paint a series of weaker aqua bars. GoNoGo Oscillator fell to test the zero line but quickly dipped into negative territory. With GoNoGo Trend painting strong blue “Go” bars again we see that the oscillator has returned to test the zero line. If we see the oscillator regain positive territory, we will look for price to make another run at a new high as we will know that momentum is resurgent in the direction of the trend.
