Good morning and welcome to this week’s Flight Path. The equity trend stayed strong this entire week as we saw GoNoGo Trend paint uninterrupted bright blue “Go” bars. Treasury bond prices also remained in a strong “Go” trend with another week of bright blue bars. GoNoGo Trend shows that a “Go” trend returned in U.S. commodities after a few “NoGo” bars the week before. The dollar, in the lower panel, saw its “Go” trend continue and this week strength returned as GoNoGo Trend painted several bright blue “Go” bars.
$SPY Finds New High in “Go” Trend
The GoNoGo chart below shows that the “Go” trend continued all week and then on Friday we saw a gap to new highs on a strong blue bar. This comes as price continued to rally from the drop two weeks ago. If we turn our eye to the oscillator panel we can see that GoNoGo Oscillator was a leading indicator as it broke out of a small GoNoGo Squeeze into positive territory triggering a Go Trend Continuation Icon (green circle) several bars before the price gap higher. This told us that momentum was resurgent in the direction of the “Go” trend. Now with momentum in positive territory but not yet overbought, we will look for price to consolidate at these levels in the coming days.
The weekly chart shows another strong blue “Go” bar at another weekly higher close. This makes for a run of 18 uninterrupted bright blue “Go” bars as the longer term trend goes from strength to strength. We look to the oscillator panel and we see that momentum reversed course at a value of 2 when it was falling toward zero and is now at 4 on heavy volume. This demonstrates healthy market participation as price moves higher.
Treasury Rates Remain in “NoGo” Trend
GoNoGo Trend continues to paint “NoGo” bars but we do see weakness as the indicator paints pink as rates rally off the most recent low. However, with rates recently making a new lower low the “NoGo” trend seems to be in place. Looking at the oscillator panel, we can see that momentum is rising toward zero but still in negative territory at a value of -1. It will be important to note whether the oscillator stays at or below zero which would confirm the “NoGo” trend.
Dollar Stays in “Go” Trend This Week
The chart below shows that the dollar remains in a “Go” trend and after falling on weaker aqua bars strength returned as the greenback found its footing. We saw consecutive strong blue bars as price gapped up and consolidates closer to the high from a few weeks ago. Importantly, GoNoGo Oscillator has continued to find support at the zero line. Now, it is testing that level again, and it will be important to note whether it continues to find support and if it can bounce back into positive territory. This would give price a boost in its efforts to make a new higher high.
Oil Gaps Higher on Amber “Go Fish” Bars
GoNoGo Trend shows that the “NoGo” trend weakened then gave way to a pair of amber “Go Fish” bars that reflect uncertainty in the direction of the trend. These come as price gaps up into a significant congestion area. We will look closely now at the oscillator panel as we see that GoNoGo Oscillator is testing the zero line from below on heavy volume. If it is rejected here, we could see price fall back into a “NoGo” trend. If the oscillator is able to regain positive territory that would be bullish for the price trend.
Gold Shows Weakness This Past Week
The chart below shows that the price trend remains a “Go” even as we see it fall significantly from the last high and Go Countertrend Correction Icon (red arrow). GoNoGo Oscillator has crashed from overbought territory to the zero line where it rests. We will watch closely in the coming days to see if the indicator is able to find support at the zero line and regain positive territory. If it does, we will know that momentum is resurgent in the direction of the 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. 3 sectors are in relative “Go” trends. $XLK, $XLV, and $XLU are painting relative “Go” bars.
Technology Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the technology sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLK. We saw in the above GoNoGo Sector RelMap that $XLK is out-performing the base index and paints strong relative “Go” bars. When we look at the below RelMap we can see that the renewable energy equipment index in the top panel is a consistent leader and is again painting strong blue “Go” bars on a relative basis.
$RUN Looks for New High in “Go”
GoNoGo Trend shows the “Go” trend continues for $RUN however we are seeing weaker aqua bars as price fails to make a new high and moves mostly sideways since the last Go Countertrend Correction Icon (red arrow). We look at the oscillator panel and we see that GoNoGo Oscillator continues to find support at the zero line. This tells us that momentum remains resurgent in the direction of the “Go” trend. We will look to see if this gives price the push it needs this week to challenge for a new higher high.
$NXT Gaps To New Higher High
The chart below shows that $NXT is in a strong “Go” trend. On the final bar of last week, we saw price gap to new highs wiping out the resistance that we see on the chart from the prior high. This comes a bar or two after GoNoGo Oscillator found quick support at the zero line bouncing back into positive territory on heavy volume. With momentum clearly supporting the “Go” trend and price action, we will look to see if price can consolidate at these new elevated levels, using prior resistance as support if needed going forward.
