Good morning and welcome to this week’s Flight Path. The equity trend continued this week as we saw uninterrupted strong blue bars as price stayed close to the highs. Treasury bond prices returned to a “Go” trend after a couple of amber “Go Fish” bars and we see the week end with weaker aqua bars. U.S. commodities painted a string of bright blue “Go” bars this week and the dollar remained in its “NoGo” trend with weaker pink bars.
$SPY Stays Strong with Bright Blue Bars
The GoNoGo chart below shows that the “Go” trend remained strong this week as price edged ever slightly higher on strong blue bars. We do see a Go Countertrend Correction Icon (red arrow) indicating that price may struggle to go higher in the short term due to waning momentum. In the oscillator panel we see this playing out with the indicator falling out of over bought territory back to a value of 3. We will watch to see if the oscillator remains in positive territory, and continues to support the trend.
The weekly chart shows another strong blue “Go” bar making it 3 in a row as price remains well above the prior high from earlier this year. We do see a lower close than last week and so we will watch to see if the trend can pick up speed from a weekly perspective. GoNoGo Oscillator is now comfortably in positive territory at a value of 3 having broken out of a small GoNoGo Squeeze and volume is heavy.
Treasury Rates Display Uncertainty in Direction
GoNoGo Trend shows that there is uncertainty regarding the direction of treasury rates. After a few weak pink “NoGo” bars we saw another amber “Go Fish” bar that tells us the market is unsure of the trend. GoNoGo Oscillator was able to break out of a small GoNoGo Squeeze into positive territory so that could hint at a future “Go” trend. We will watch closely this week.
Dollar Rallies off Lows
The trend in the dollar remains a “NoGo” this week. After hitting another lower low we saw price climb gradually on a string of weaker pink bars. Whether this will be enough to force a change in trend remains to be seen as GoNoGo Oscillator is testing the zero line from below and we see the beginnings of a GoNoGo Squeeze. We will watch to see if the oscillator gets rejected again at this level. If it does, then we will expect the “NoGo” to continue and expect price to make another attempt to go lower.
Oil “Go” Trend Continues With Aqua Bar
GoNoGo Trend shows price continuing to rally but the indicator painted a couple of weaker aqua bars to end the week. GoNoGo Oscillator has been stuck at zero now for several bars and we see a GoNoGo Squeeze rising to its Max. It will be important to note the direction of the break of the Squeeze. If the Squeeze is broken with the oscillator rallying back into positive territory then we would know that momentum is resurgent in the direction of the “Go” trend and would expect it to continue.
Gold Refusing to “Go” Away
Once again we saw the “Go” trend fight back, this time after a couple of “NoGo” pink bars. GoNoGo Trend is painting an aqua bar. GoNoGo Oscillator has been consistently at or below the zero line for several weeks now though and this is a concern. For the “Go” trend to truly return and kick on we would need to see GoNoGo Oscillator rally back into positive territory.
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, $XLE, and $XLB, are painting relative “Go” bars.
Materials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the technology sector again 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 a new out-performer of the base index painting relative aqua “Go” bars. When we look at the below RelMap we can see that the steel index in the top panel remains strong as it paints relative blue “Go” bars.
$MT Breaks to New Higher Highs
GoNoGo Trend shows that the “Go” trend took a nice climb higher last week as it was able to break above horizontal resistance that we see on the chart from earlier in March. A series of strong blue bars pushed price higher and we will watch to see if it can consolidate at these elevated levels this week and use what was once resistance as support going forward. GoNoGo Oscillator is overbought at the moment showing market enthusiasm.
$CLF Breaks Above Resistance in New “Go” Trend
The chart below shows that $CLF has gone from strength to strength over the past few weeks. After entering a new “Go” trend on aqua bars we saw the trend indicator paint strong blue bars and set a new intermediate high as price ran up against resistance from earlier in the chart. With GoNoGo Oscillator breaking out of a Max GoNoGo Squeeze the trend had the momentum it needed to help push price higher. We will look for this level to act as support going forward if needed as the “Go” trend progresses.
