Good morning and welcome to this week’s Flight Path. Equities remain in a “Go” trend this week and we saw strength return with a string of consecutive bright blue bars as price climbed to another higher high. Treasury bond prices stayed in the “NoGo” trend but we did see weakness this week as the indicator painted pink bars. We see some uncertainty at the end of the week when looking at the U.S. commodities index as GoNoGo Trend paints an amber “Go Fish” bar after a brief attempt at a “Go” trend. Likewise, the dollar paints uncertainty as we see consecutive amber “Go Fish” bars as prices rally out of the “NoGo” trend that was present for the past several weeks.
$SPY Hits High in “Go” Trend
The GoNoGo chart below shows that the “Go” thrived this week as we saw uninterrupted bright blue “Go” bars and price climbing to a new higher high this last week. This comes after GoNoGo Oscillator found support at the zero line earlier in the week triggering a Go Trend Continuation Icon (green circle) suggesting that momentum was in line with the “Go” trend. This gave price the push it needed to climb to another higher high.
The weekly chart shows that on the longer time frame the trend has remained strong for another week. We see another higher weekly close also this week as the trend progresses nicely. GoNoGo Oscillator is in positive territory but not yet overbought at a value of 3. This tells us that momentum is confirming the “Go” trend we see in the price panel.
Treasury Rates Continue to Test Highs
GoNoGo Trend shows the trend continues this week and we saw GoNoGo Trend paint strong blue “Go” bars again. Rates have remained close to the prior high levels that have started to dominate the chart. With GoNoGo Oscillator continuing to find support at zero we will watch to see if the trend will allow for new highs in the coming days and weeks. If GoNoGo Oscillator can rally further into positive territory this would likely happen.
Dollar Continues to Rally on “Go Fish” Bars
The chart below shows that there is a great deal of uncertainty this week as we see consecutive amber “Go Fish” bars as price continues to climb. GoNoGo Oscillator has raced into positive territory and up to overbought levels. We will watch to see if the oscillator remains at these extremes or if it falls back toward the zero line. That will help us determine whether the green back will enter a new “Go” trend or fall back into a “NoGo”.
Oil Flashes an Amber “Go Fish” Bar
GoNoGo Trend shows that the “NoGo” trend has given way to a single “Go Fish” bar. This comes as GoNoGo Oscillator breaks out of an extended Max GoNoGo Squeeze into positive territory. This tells us that momentum is out of step with the prior “NoGo” trend and if anything gives a nod to the likelihood of a change in trend to a “Go” in the panel above.
Gold “Go” Strengthens Near Highs
The trend in Gold continued this past week and we saw strength return as price climbed near the prior high from two weeks ago. This comes as GoNoGo Oscillator has repeatedly found support at zero causing multiple Go Trend Continuation Icons (green circles) on the price chart. We will watch to see if this resurgent momentum in the direction of the underlying “Go” trend gives the boost it needs to make another higher high. There seems to be no stopping the precious metal in the short term.
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. 6 sectors are in relative “Go” trends. $XLY, $XLC, $XLF, $XLI, $XLB, and $XLV are painting relative “Go” bars.
Materials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the indusstrials sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLB. We saw in the above GoNoGo Sector RelMap that $XLB is an out-performing sector and paints strong relative “Go” bars. When we look at the below RelMap we can see that the gold mining index in the third lowest panel is painting strong blue “Go” bars on a relative basis.
$IAG Looks for Support in “Go” Trend
GoNoGo Trend shows that $IAG has been in a “Go” trend and we have seen a series of higher highs and higher lows as price has moved to almost $18. Recently, we saw a Go Countertrend Correction Icon (red arrow) suggesting that price may struggle to go higher in the short term. Indeed, we have seen a sprinkling of weaker aqua bars and price has moved mostly sideways since. GoNoGo Oscillator has been embroiled in a battle with the zero line and we see an extended Max GoNoGo Squeeze reflecting the battle between buyers and sellers at this level. We will watch to see in which direction the Squeeze is broken to help us determine next direction.
$CDE Moves Above Horizontal Resistance
$CDE has recovered nicely from the “NoGo” correction that it was in at the end of last year. Now, after re-entering a “Go” trend, we can see that it has been able to clear resistance after failing several times before. This comes as GoNoGo Oscillator rallies sharply off the zero line on heavy volume. This gave price the push it needed to overcome overhead supply. We will watch this week to see if price can consolidate at these higher levels turning resistance into support and mount an attack on a new higher high.
