Good morning and welcome to this week’s Flight Path. The equity trend remained in a “Go” trend and we saw strength return as the indicator painted bright blue bars. GoNoGo Trend showed that treasury bond prices stayed in a “NoGo” trend for another week but we do see weakness as the indicator paints pink bars this week. Uncertainty abounds elsewhere as U.S. commodities paint amber “Go Fish” bars after coming out of a period of weak “Go” trend. The dollar is trying to leave the grasp of the “NoGo” behind as it paints consecutive amber “Go Fish” bars.
$SPY Finds Strength As it Paints Blue Bars
The GoNoGo chart below shows that the “Go” trend survived again this week and we see strong blue bars as price looks to have set a new higher high. We are running into congestion from what we see on the left side of the chart and so we will watch closely to see if price can climb from here. When we look at the GoNoGo Oscillator panel we can see that it continues to find support at zero and volume is heavy. We will watch to see if the oscillator can rally back into positive territory after this clustering of Go Trend Continuation Icons (green circles). If it does, we will know that momentum is resurgent in the direction of the “Go” trend.
The weekly chart shows another week of uncertainty as GoNoGo Trend paints an amber “Go Fish” bar. There is some deliberating happening at these price levels with a lot of overhead resistance to fight through. In an encouraging sign, GoNoGo Oscillator has broken back into positive territory on heavy volume and out of a small GoNoGo Squeeze. This tells us that there is the start of some momentum to the upside.
Treasury Rates Remain In “Go” Trend
GoNoGo Trend shows that the “Go” trend has continued this week but we see weakness as the indicator paints a string of pale aqua bars. This takes us back down to levels that have been areas of congestion before. We will turn our eye to the oscillator panel for a hint at the next direction. We see that it is stuck at zero, and a GoNoGo Squeeze is building. It will be important to note the direction of the break out of this squeeze when determining the most likely next move.
Uncertainty in the Direction Of Dollar Prices
This week showed us a narrowing range of trading activity for the greenback, and after more weak pink bars, GoNoGo Trend painted 3 consecutive amber “Go Fish” bars as the market tries to make up its mind. The last leg down did not set a new lower low and so we look to the oscillator panel to guide us. Currently, GoNoGo Oscillator is riding the zero line as we see a virtual tug of war between buyers and sellers at these levels. We will look for the resolution of the GoNoGo Squeeze for clues. If the oscillator climbs back into positive territory then we could look for possible price change in the panel above.
Oil Goes Nowhere as “NoGo” is Weak
GoNoGo Trend shows us that “NoGo” trend hangs on as price slithers sideways this past week. Unable to move above resistance from prior lower highs, the weight of the evidence suggests more possibility for downside pressure. GoNoGo Oscillator is at zero and we are in a Max GoNoGo Squeeze. We will watch for the direction of the breakout of the Squeeze. If we break out of the Squeeze into positive territory that may give price the push it needs to move to new highs. If it rolls back below zero, then the “NoGo” trend may continue.
Gold “Go” Falters but Survives
Gold prices saw a single “Go Fish” bar as the market displayed some uncertainty. However, this was quickly answered by a new aqua “Go” bar as price gapped higher. It will be important for this trend that GoNoGo Oscillator remains on the right side of zero. After a foray into negative territory we are now seeing the oscillator ride the zero line. If price is to make another run to set a new higher high it will be necessary to see momentum resurgent in the direction of the trend.
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, $XLY, and $XLI, are painting relative “Go” bars.
Industrials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the industrials sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLI. We saw in the above GoNoGo Sector RelMap that $XLI is a consistent out-performer of the base index. When we look at the below RelMap we can see that in the last panel, the commercial vehicles index remains strong as it paints strong relative blue “Go” bars.
$CYD: Calm Before the Storm?
GoNoGo Trend shows that we are in a “Go” trend but looking at the price action we can see that it has moved sideways in narrowing trading range for several weeks. If we turn our attention to the GoNoGo Oscillator panel we can see that scenario played out in a virtual tug of war between buyers and sellers at this level. We are in a Max GoNoGo Squeeze. We will watch closely for the break out of the Squeeze this week. If we see the oscillator rally into positive territory then we can expect the “Go” trend to continue and price to climb toward the prior highs we see on the chart.
$MEC Testing Resistance
The chart below shows that $MEC is testing strong overhead resistance. We can see the concept of polarity playing out here as levels that were support at the beginning of the chart have become resistance. GoNoGo Trend is painting strong blue “Go” bars as we run up to this level for the second time. GoNoGo Oscillator is in positive territory but no longer overbought suggesting that there may be some room to run. We will watch to see if price can break above the horizontal resistance this week.
