Good morning and welcome to this week’s Flight Path. The equity trend found its feet yet again last week as GoNoGo Trend painted an entire week of bright blue “Go” bars. Treasury bond prices remained in a “Go” trend as well with an uninterrupted week of strong blue “Go” bars. U.S. commodities showed some weakness this week as the indicator painted a majority of weaker aqua bars. The dollar, having rallied into a “Go” trend the week before showed that the trend survived but there was a lack of strength as we see s string of paler aqua bars.
$SPY “Go” Trend Paints Strong Blue Bars at New Highs
The GoNoGo chart below shows that the “Go” trend in equities not only survived it thrived this week as we see price set a new higher high on strong blue bars. This comes after GoNoGo Oscillator found support at the zero line on heavy volume. We saw a Go Trend Continuation Icon (green circle) at the beginning of the week that signaled resurgent momentum in the direction of the “Go” trend.
The weekly chart shows that the strong “Go” trend continues on the larger time frame. Another week sees another bright blue bar at another higher high. We note that this is the first time during this “Go” trend that we see a Go Countertrend Correction Icon (red arrow) indicating that price may struggle to go higher in the short term. We will watch to see if price can consolidate at these elevated levels in the coming weeks.
Treasury Rates Rally on a Gap Higher
GoNoGo Trend shows that the “NoGo” trend survives another week but after day of falling lower we saw rates gap up and GoNoGo Trend is now painting a weaker pink bar. If we turn our attention to the lower panel we can see that this comes as GoNoGo Oscillator finds support at zero and bounces back into positive territory. This tells us that momentum is out of line with the underlying “NoGo” trend.
Dollar Moves Sideways in “NoGo” Trend
The chart below shows the weekly time frame of price with the GoNoGo Charts applied. We can see that for the last several months price has moved mostly sideways and it was no different this week as GoNoGo Trend painted another weaker pink bar. We see the virtual tug of war between bulls and bears at this level as the Oscillator was embroiled in an extended Max GoNoGo Squeeze. We see it briefly broke the Squeeze into positive territory but is now right back testing zero.
Oil Displays Continued Chop
GoNoGo Trend shows that after 3 amber “Go Fish” bars a “NoGo” has returned with the indicator painting strong purple bars as price threatens to make a new lower low. We look at the oscillator panel and we see that GoNoGo Oscillator has broken sharply through the zero line on heavy volume. We will watch to see if this pushes price to new lows this week.
No Slowing Down for Gold
The chart below shows that price remained in a strong “Go” trend with another week of nothing but strong blue bars as price hit yet another higher high. We see that GoNoGo Oscillator remained at overbought levels for the entire week which shows strong market enthusiasm in the underlying “Go” trend. Volume also remains heavy and we will watch this week to see if there is any indication of a countertrend correction.
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 out-perform the base index and paints strong relative “Go” bars. When we look at the below RelMap we can see that the renewable energy index in the top panel is a consistent leader and is again painting strong blue “Go” bars on a relative basis.
$RUN-ning higher?
GoNoGo Trend shows the “Go” trend has burst to new higher highs this past week. After several weeks of sideways movement that came after a few Go Countertrend Correction Icons (red arrows) and some weaker aqua “Go” bars, we saw price break above resistance on bright blue bars. This came after GoNoGo Oscillator was able to find support at zero after breaking out of a Max GoNoGo Squeeze. This triggered Go Trend Continuation Icons (green circles) under price telling us that momentum was resurgent in the direction of the “Go” trend. We will look for price to consolidate at these levels this week or climb higher.
$EDG Looks for Support in “Go” Trend
The chart below shows that $EDG has been in a “Go” trend making a series of higher highs and higher lows as price has climbed over $40. We recently saw a Go Countertrend Correction Icon (red arrow) close to the high and this told us that price may struggle to go higher in the short term. Indeed, we have seen mostly sideways movement and some weaker aqua bars since. GoNoGo Oscillator fell to test the zero line from above and it rests at that level. We will watch closely to see if it finds support at zero and if it can rally back into positive territory we will see a Go Trend Continuation Icon (green circle) and know that momentum is resurgent in the direction of the “Go” trend.
