Good morning and welcome to this week’s Flight Path. Equities are in a “Go” trend however we do see weakness with a couple of aqua bars coming after an amber “Go Fish” bar of uncertainty. Treasury bond prices are in a “NoGo” trend and we see weaker pink bars at the end of the week. U.S. commodities are also in a “NoGo” trend and we see the indicator painting strong purple bars after a couple of bars of uncertainty. The dollar is also in a “NoGo” trend that has stuck around for a second week but is painting weaker pink bars as well as the week comes to a close.
$SPY Hangs on to “Go” Trend
The GoNoGo chart below shows that the “Go” survived but barely as the middle of last week saw an amber “Go Fish” bar of uncertainty. We see weaker aqua bars now as price looks to have put in a higher low. GoNoGo Oscillator is back testing the zero line from below where we will watch to see if it can regain positive territory. If it does, we will expect price to make an attempt at new higher highs in the coming days and weeks.
The weekly chart shows that on the longer time frame the trend remains in place. A recovery toward the end of the week put the close back near the open which is an encouraging sign for the bulls. We also see that GoNoGo Trend continues to paint strong blue “Go” bars. GoNoGo Oscillator is in positive territory but not yet overbought at a value of 3 having bounced off the zero line. With momentum in line with the “Go” trend we can look for price to make an attack on a new high.
Treasury Rates Continue to Paint Weak Aqua Bars
GoNoGo Trend shows the trend continues this week but we saw an entire week of pale aqua bars. GoNoGo Oscillator fell to test the zero line from above and it will be important to watch to see if it finds support at that level. If it does, then we would see signs of trend continuation (green circle) indicating that momentum is resurgent in the direction of the “Go” trend. This could help push prices higher in the coming week.
Dollar Stays in “NoGo” Painting Pink Bars
The chart below shows that the dollar continues to paint “NoGo” bars but the trend has weakened as prices rally on pink bars. Having set a new lower low we will watch to see where this relief rally ends. GoNoGo Oscillator has risen to test the zero line from below and we will pay close attention to see if it finds resistance at this level. Should GoNoGo Oscillator fall back into negative territory then we would expect price to experience further downside pressure in the coming days.
Oil Remains in Strong “NoGo”
GoNoGo Trend shows that the trend continues to fall and paints strong purple “NoGo” bars again this week. After setting a new lower low we do see price begin to rally and a NoGo Countertrend Correction Icon (green arrow) telling us that momentum has waned over the last several bars. GoNoGo Oscillator is rising out of oversold territory and is now at a value of -2. We will watch to see if it approaches the zero line and what happens at that level.
Gold “Go” Trend Continues On Strong Blue “Go” Bars
The trend in Gold continues and we see that GoNoGo Trend is painting strong blue “Go” bars as price inches ever close to the prior high. GoNoGo Oscillator is in overbought territory at a value of 5. We will watch to see if this market enthusiasm will help propel price to new highs in the coming days and 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. 6 sectors are in relative “Go” trends. $XLY, $XLC, $XLF, $XLI, $XLB, and $XLV are painting relative “Go” bars.
Materials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the materials sector this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLB. We saw in the above GoNoGo Sector RelMap that $XLB is out-performing sector and paints strong relative “Go” bars. When we look at the below RelMap we can see that the steel index in the top panel is painting strong blue “Go” bars on a relative basis.
$CLF In New “Go” Trend Looking for Highs
GoNoGo Trend shows that price is in a new “Go” trend since rallying out of a larger correction. We saw a string of amber “Go Fish” bars of uncertainty after GoNoGo Oscillator broke into positive territory but it took few more days before the “Go” trend was established. This came as GoNoGo Oscillator was able to find support at the zero line indicating that momentum was in line with the underlying “Go” trend. Most recently, we see another Go Trend Continuation Icon (green circle) and we will watch to see if this surging momentum is enough to give price the push it needs to climb to a new high.
$ATI Hits Another High in “Go” Trend
$ATI has been in a “Go” Trend since late September. After entering the “Go” trend we saw that GoNoGo Oscillator found support at zero each time it tested that level and remained therefore in line with the “Go” trend. After gapping higher late October, we saw price move mostly sideways after a Go Countertrend Correction Icon (red arrow) that indicated waning momentum. During that period, we saw an extended Max GoNoGo Squeeze that was eventually broken to the upside which led to another higher high. Now, we see price surging again on strong blue “Go” bars and GoNoGo Oscillator ascending to overbought territory on heavy volume, showing the market enthusiasm behind the move. We will look for price to consolidate at these higher levels in the coming days.
