Good morning and welcome to this week’s Flight Path. The equity “Go” trend continued again this week and we saw the indicator paint strong blue bars. Treasury bond prices remained in a “Go” trend as well but we did see some weakness with paler aqua bars. U.S. commodities continued to struggle for direction as after a couple of “NoGo” bars the week ended with another amber “Go Fish”. The dollar, for now, was able to continue in its “Go” trend but is painting weaker aqua bars.
$SPY Recovers After Drop
The GoNoGo chart below shows that the “Go” trend recovered as price rallied back close to prior highs. We see GoNoGo Trend painting strong blue bars once again. If we look at the lower panel we can see that GoNoGo Oscillator was able to quickly regain positive territory and is now at a value of 1. This gives a Go Trend Continuation Icon (green circle) in the price panel telling us that momentum is resurgent in the direction of the underlying “Go” trend. We will look to see if this gives price the push it needs to climb to a new high.
The weekly chart shows that on the larger timeframe the trend remains in place. GoNoGo Trend paints another strong blue “Go” bar and GoNoGo Oscillator remains in positive territory at a value of 3. Volume remains heavy as we see strong market participation. We will watch to see if the indicator continues to fall toward the zero line this week.
Treasury Rates Drop this week
Treasury rates appear to have settled back into a “NoGo” trend this week after a long amber “Go Fish” bar brought prices lower a week ago. While rates have rallied from this low we see GoNoGo Trend painting strong purple bars. We will watch to see if GoNoGo Oscillator remains at or below the zero line in the coming days.
Dollar Looks for Support in “Go” Trend
After setting a new high last week on new “Go” bars, we saw price fall from that level this week. GoNoGo Trend is still painting “Go” bars albeit weaker aqua ones as price looks to find support and set a new higher low. In order to do this, GoNoGo Oscillator will likely need to find support at zero and rally back into positive territory. We will watch to see if momentum remains in line with the new “Go” trend this week.
Oil “Go” Trend Shortlived
GoNoGo Trend shows that the trend changed this week after price failed to set a higher high. After breaking out of an extended Max GoNoGo Squeeze into positive territory the oscillator fell back to test zero and couldn’t find support, crashing through into negative territory on heavy volume. After a few amber “Go Fish” bars of uncertainty, we see a first “NoGo” bar.
“Go” Returns for Gold
The precious metal is being persistent and does not want to give up its “Go” trend. We see the indicator painting 4 consecutive bright blue “Go” bars this week as GoNoGo Oscillator climbs back above the zero line into positive territory. With Momentum once again aligned with the “Go” trend we will see if price can push on this week. The overhead resistance is clear on the chart, but if new highs are set then we could see a big move higher.
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 $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 continues to be a consistent out-performer and is painting strong relative “Go” bars. When we look at the below RelMap we can see that the telecommunications equipment index is a new strong out-performer in the 5th panel.
$CSCO Breaks above Resistance
We see the “Go” trend continues for $CSCO and a surge higher this week saw price break above horizontal resistance. This comes as GoNoGo Oscillator burst into positive territory on heavy volume out of an extended Max GoNoGo Squeeze. With momentum clearly in support of the “Go” trend we will look for price to consolidate at these elevated levels before perhaps climbing even higher.
$UI Completes Cup and Handle Pattern in “Go” Trend
$UI has been in a “Go” trend since early May but after streaking to its first high of the trend has failed to make ground. We see a traditional price pattern playing out, the Cup and Handle. Seeing the weight of the evidence line up like this can be very powerful. In a pattern such as this, I always like to see the right side of the pattern supported by GoNoGo Oscillator being at or above the zero line. We can see momentum building in this way. Now, with GoNoGo Trend painting strong blue bars as it rises out of the handle portion of pattern above resistance, we see GoNoGo Oscillator has again found support at zero and is at a value of 2. We will watch for price to consolidate above resistance and set a higher high in the coming days.
