Good morning and welcome to this week’s Flight Path. The equity trend was strong this past week with an uninterrupted string of bright blue “Go” bars. Treasury bond prices likewise displayed strength with solid blue “Go” bars. U.S. commodity prices remained in a “Go” trend and saw strength return with bright blue bars while the dollar suffered more uncertainty with amber “Go Fish” bars that gave way to purple and pink “NoGo” colors.
$SPY Soars to New Highs On “Go” Trend Strength
The GoNoGo chart below shows that the “Go” trend was strong this entire week with nothing but bright blue “Go” bars. We can see that price has moved higher to another new high this week after getting a burst of momentum just over a week ago. If we turn our attention to the lower panel, we can see that momentum has risen this week on heavy volume. It is now in overbought territory at a value of 5.
The weekly chart shows another strong blue “Go” bar at a new weekly closing high. This has been a good run of now of 12 consecutive bright blue “Go” bars. If we look below to the oscillator panel we can see that it is drifting sideways between 3 and 4. This tells us that while momentum remains positive it has not yet reached overbought levels in this “Go” trend. We do note that volume has fallen of late.
Treasury Rates Fall Further
GoNoGo Trend shows that the “NoGo” trend spent the entire week consolidating the gap from September 5th. We see the indicator painting nothing but strong purple bars as we make new lows. When looking at the oscillator panel, we can see that momentum is firmly on the side of the “NoGo” trend at a value of -3.
Dollar Suffers Uncertainty and Trend Change
The trend in the dollar suffered from chop this week as the market expressed uncertainty over its direction. We saw several amber “Go Fish” bars and “NoGo” colors taking over the trend. With a pink “NoGo” bar we see GoNoGo Oscillator is testing the zero line from below where we will watch to see if it gets rejected. If it does then it is quite likely the “NoGo” trend will continue and price may fall from here.
Oil “NoGo” Trend Hangs on For Another Week
GoNoGo Trend shows that the “NoGo” remains in place this week but having failed to set a new lower low we see pink bars indicating weakness. We will watch to see if the “NoGo” can survive another week. When we turn our attention to the lower panel we can see that GoNoGo Oscillator is riding the zero line. We will watch closely to see in which direction it will break out of the newly forming GoNoGo Squeeze. If it can regain positive territory perhaps we will see price rally in the panel above. If the oscillator falls back into negative territory we will expect the “NoGo” to continue.
Gold Goes Higher Again
The weekly chart of Gold shows that price consolidated last week’s break higher with another good week and a higher weekly close on a strong blue “Go” bar. After multiple Go Trend Continuation Icons (green circles) a few weeks ago we saw strong follow through. In the lower panel we see that GoNoGo Oscillator is now at an overbought extreme so we will watch as that falls if there is any temporary exhaustion in the trend in the coming weeks.
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. $XLY, and $XLC, are painting relative “Go” bars. With so many relative “NoGo” trends, we see that consumer staples has been a relative under performer for the entire length of the chart.
$KO Falls into “NoGo” Trend
In the GoNoGo Sector RelMap above, we saw that there is a lot of relative underperformance even as the overall equity index rises. Below we take a look at $KO, in the staples sector, as an example of this relative under performance. We can see that after months of mostly sideways action and no new higher high, price once again fell to test the horizontal support that we see on the chart. After an amber “Go Fish” bar, we see price is breaking through support on a pink “NoGo” bar. This comes after GoNoGo Oscillator broke out of a Max GoNoGo Squeeze into negative territory. Now, with momentum on the side of the new “NoGo”, we will look to see if price falls further this week.
Is the $MATH Adding Up?
In the Sector RelMap above, we saw that it is still the growth sectors, discretionary and communications, that are driving equity prices higher. Below is the chart of $MATH, and we can see that after a “NoGo” correction, we identify a new “Go” bar. This comes after several amber “Go Fish” bars that indicated uncertainty in price direction. Over a week ago, GoNoGo Oscillator broke out of a GoNoGo Squeeze into positive territory hinting at the price trend change that was to come. Now, with a new “Go” trend identified, and momentum positive, we will look to see if price can climb to test prior highs.
