Good morning and welcome to this week’s Flight Path. The equity trend continued this week but we saw some struggles late in the week as the indicator painted a couple of weaker aqua bars as price fell from the latest high. Treasury bond prices managed to hold on to the new “Go” trend but U.S. commodities saw uncertainty at the end of the week as GoNoGo Trend painted an amber “Go Fish” bar. The dollar, for now, is painting strong blue “Go” bars as the trend has changed from “NoGo”.
$SPY Paints New High Then Falls
The GoNoGo chart below shows that the “Go” trend hit new heights again this week before sharply dropping on an aqua bar at the end of the week. We will watch closely this week as we are testing the levels from a prior low. GoNoGo Oscillator crashed to and through the zero line and volume is heavy. With momentum now out of step with the “Go” trend it will be important to watch if the oscillator stays in negative territory this week.
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 is 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 Fall into “NoGo” Trend
After some uncertainty as reflected by amber “Go Fish” bars, we saw a “NoGo” trend arrive and on the last day of the week we saw rates fall sharply to test prior lows. GoNoGo Oscillator has broken out of the Max GoNoGo Squeeze and is falling quickly further into negative territory confirming the “NoGo” trend we see in price.
Dollar Changes Trend to “Go”
After a few amber “Go Fish” bars, which often appear at a transition between trends, we saw GoNoGo Trend paint blue “Go” bars. These are the first “Go” bars for several months and we see that price is painting a new higher high as well. This higher high comes after a higher low at the end of the “NoGo” trend. GoNoGo Oscillator had previously broken through the zero line into positive territory and has already found support at that level. This week, should the oscillator fall to test the zero line, it will be important to note if it finds support there.
Oil Continues to Climb Back to Prior High
GoNoGo Trend shows that the trend remains a “Go” this past week and we saw prices move higher as they attempt to recover the distance from June’s high. GoNoGo Oscillator broke out of an Extended Max GoNoGo Squeeze this week into positive territory which helped the “Go” trend. We will watch to see if the oscillator can remain at or above zero in the coming weeks, offering its support to the “Go” trend.
A Week Without “Go” Bars
A “NoGo” arrived this week and we saw mostly pink and purple bars. With no “Go” colors for the first week in a very long time, things do not look great for the precious metal. However, on the last bar, we see price climb and an amber “Go Fish” bar telling us that the market remains uncertain regarding its next direction. GoNoGo Oscillator is now in negative territory on heavy volume but is rising toward the zero line.
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, $XLI, and $XLU are painting relative “Go” bars.
Utilities Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the utilities sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLU. We saw in the above GoNoGo Sector RelMap that $XLU is a new relative out-performer and paints an aqua “Go” bar. When we look at the below RelMap we can see that the conventional electricity index in the top panel remains strong and is driving the index’ performance as it paints relative blue “Go” bars.
$NRG Looks to Climb Above Resistance
We see the “Go” trend has returned for $NRG as it threatens to put the overhead resistance we see on the chart in its rear view mirror. After months of moving sideways we see the new “Go” trend moving higher on strong blue bars. This comes after GoNoGo Oscillator repeatedly found support at zero and is now in positive territory but not overbought. We will watch to see if price can consolidate at these elevated levels this week.
$TAC Looks For Support in “Go” Trend
$TAC has been in a “Go” trend for several months and we have seen higher highs and higher lows as price climbed to a late July high. During this time, price has remained primarily at or above the zero line offering its support to the trend. After each higher high we have seen GoNoGo Trend paint the pullbacks with weaker aqua bars and recently we see the same thing. At the most recent highs, we saw Go Countertrend Correction Icons (red arrows) indicating that price may struggle in the short term and indeed GoNoGo Painted that weakness with aqua bars. GoNoGo Oscillator has fallen to test the zero line from above. It will be important that the zero line provides support and the oscillator bounces back into positive territory. This would ensure momentum is resurgent in the direction of the “Go” trend and we could expect an attempt at new highs.
