Good morning and welcome to this week’s Flight Path. Equities remain in a “Go” trend this week and although stalling near highs we see the GoNoGo Trend indicator painting strong blue “Go” bars. Treasury bond prices remain in a “NoGo” trend and as the week ended we saw strength return with purple bars. U.S. commodities also remain in the trend they were in as the indicator paints more “Go” bars with strength again returning at the end of the week. The dollar marks a change as it is the only major asset class to change trend this week. The greenback fell out of the “Go” trend and entered a “NoGo” with the indicator painting strong purple “NoGo” bars by the week’s end.
$SPY Seems to Fail to Make New High
The GoNoGo chart below shows that the “Go” trend has continued this week but price was unable to surpass the high from November. The trend remains in place however and we will look for price to consolidate at these levels and perhaps make a run again in the future at those new higher highs. GoNoGo Oscillator is in positive territory but not overbought at a value of 2. We will look for the oscillator to remain at or above the zero line which will provide momentum support for the trend. If the zero line is tested and GoNoGo Oscillator finds support then we will see signs of Go Trend Continuation.
The weekly chart shows that on the longer time frame the trend remains in place with another small but strong blue “Go” bar with price again staying close to the prior high. If we turn our attention to the oscillator panel we can see that GoNoGo Oscillator recently tested the zero line and found support with heavy volume as it bounced quickly back into positive territory. This is a good sign for the “Go” trend.
Treasury Rates Remain in “Go” Trend
GoNoGo Trend shows the trend continues this week with a mix of strong blue and weaker aqua “Go” bars as we saw a slightly higher intermediate high. GoNoGo Oscillator is now clearly in positive territory at a value of 2. We will look for momentum to remain in positive territory to provide support for the new trend. Having surpassed November highs we will watch to see if the trend can go higher than late September highs having seen momentum align with the trend.
Dollar Falls into “NoGo” Trend
The chart below shows that the dollar fell out of the “Go” trend it was in this past week. The tell tale GoNoGo Signs were in place and so it was no surprise. After the most recent high we saw a continued string of weaker aqua bars as price fell from the high. During this weakness, GoNoGo Oscillator fell to test the zero line from above where we watched for support. It was unable to regain positive territory and a few bars before the trend change we saw GoNoGo Oscillator move out of step with the “Go” trend and fall into negative territory. It quickly retested that zero level and found resistance. Now, with a new “NoGo” trend in place and momentum further into negative territory we will watch for further price weakness this week.
Oil Remains for Now in “NoGo”
GoNoGo Trend shows that the trend is a “NoGo” for now for oil. The past week saw the indicator paint a string of strong purple bars after the “Go Fish” bar of uncertainty that ended the week before. GoNoGo Oscillator tried to regain positive territory but ultimately was unable to do so and has broken back into negative territory on heavy volume. We will watch to see if oil prices fall to test the lows from October.
Gold “Go” Trend Continues
The chart below shows that the “Go” trend in gold saw strength this week as price rallied on strong blue “Go” bars at the end of the week and has come close to challenging for a new higher high. This comes after GoNoGo Oscillator emphatically found support at the zero line bouncing immediately back into positive territory. Now, with strong blue “Go” bars and GoNoGo Oscillator rising at a value of 4 we will look to see if price can mount an attack on a new higher high.
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. $XLE, $XLF, $XLI, $XLB, $XLV, and $XLP are painting relative “Go” bars.
Healthcare Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the healthcare sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLV. We saw in the above GoNoGo Sector RelMap that $XLV is out-performing sector and paints strong relative “Go” bars. When we look at the below RelMap we can see that the pharmaceuticals index in the last panel is painting aqua “Go” bars on a relative basis.
$IRWD Looks for Support in “Go” Trend
GoNoGo Trend shows that price has been in a “Go” trend for some time. We saw a series of higher highs and higher lows pushing price to up close to $4. During this trend we saw that GoNoGo Oscillator stayed at or above the zero line the entire time, providing momentum support for the “Go” trend. However, after the last high, we saw Go Countertrend Correction Icon (red arrows) indicating that price may struggle to go higher in the short term due to waning momentum. Since then, we have seen price move mostly sideways and GoNoGo Oscillator has fallen to test the zero line from above. Twice it has found support, but it is testing that level again. It is important for the health of the “Go” trend that it rallies back into positive territory once again. If it does, we can expect the “Go” trend to continue and for price to make an attempt at another higher high.
$ANRO Looks to Power Through Resistance
$ANRO has been in a strong “Go” trend for several months and we see price has made extraordinary gains. After the high in late November, we saw a Go Countertrend Correction Icon (red arrow) telling us that price may struggle to go higher in the short term. Indeed, since then we have seen price move mostly sideways but with ever increasing lows. This month saw a shrinking of daily trading range and almost entirely weaker aqua bars. GoNoGo Oscillator reflected this with an extended Max GoNoGo Squeeze showing the virtual tug of war between buyers and sellers at this level. Most recently, the GoNoGo Squeeze has been broken to the upside and so we will watch to see if price can climb to new highs in the coming days now that momentum is resurgent in the direction of the “Go” trend (green circle).
