Good morning and welcome to this week’s Flight Path. Equities see the “Go” trend return after one lone pink “NoGo” bar as price found support at the prior low. Treasury bond prices have seen some uncertainty as GoNoGo Trend paints an amber “Go Fish” bar. U.S. commodities painted a full week of aqua “Go” bars as the trend displayed weakness. The dollar also reflected market uncertainty as GoNoGo Trend painted an amber “Go Fish” bar after a string of pink bars.
$SPY Finds its Feet as “Go” Trend Reappears
The GoNoGo chart below shows that the “Go” trend was threatened this week as the indicator painted a pink “NoGo” bar as price threatened prior lows. After price found support we saw the “Go” trend return with an aqua bar. GoNoGo Oscillator is testing the zero line from below and it will be important to note if it finds resistance at that level or if it is able to regain positive territory. If the oscillator moves back above the zero line that would be a positive sign and would suggest that momentum is once again in line with the “Go” trend.
The weekly chart shows that on the longer time frame the trend has continued for another week and we see a second strong blue “Go” bar this week as price seems stable but moving sideways. We see in the lower panel that GoNoGo Oscillator is at a value of 3 and has been for several weeks. This tells us that momentum is positive but not overbought. This confirms the trend that we see in the price panel.
Treasury Rates Creep Higher
GoNoGo Trend shows the trend continues this week and we see that once again support is found as the horizontal level was tested again this week. We do note that we were unable to set a new higher high and so we see the trend as somewhat stagnant. GoNoGo Oscillator continues to find support at zero but has not been able to move far away from the zero line for over a week now. It will be important to note whether or not the oscillator can continue to hold the zero line.
Dollar Tries to Rally Off Lows
The chart below shows that the dollar tried hard to rally from the new lows and after several pink “NoGo” bars has even painted an amber “Go Fish” bar of uncertainty. GoNoGo Oscillator is testing the zero line from below and we see that it has been stuck at that level now for several bars. This has caused the grid of GoNoGo Squeeze to rise close to its Max. We will pay close attention to the direction of the Squeeze break. If it is rejected by the zero line, we can expect price to roll back over. If it breaks the GoNoGo Squeeze into positive territory we may see price continue higher and potentially change trend.
Oil Sees Some Consolidation in “Go” Trend
GoNoGo Trend shows that the “Go” trend remained this week even as price fell from the high initially. We have seen GoNoGo Trend again paint strong blue bars as price has consolidated above the most recent higher low. GoNoGo Oscillator has fallen to test the zero line from above and so we will watch to see if it finds support at this level. This would then suggest Go Trend Continuation and we could expect price to make an attempt at a new high.
Gold Settles After Finding its Feet
The trend in Gold remained in place this week and after a strong move lower at the end of the week before we have seen the precious metal consolidate this week after making a new higher low. GoNoGo Oscillator fell to test the zero line several bars ago and that is where it has stayed. We see a GoNoGo Squeeze beginning to build and so we will watch closely to see in which direction the Squeeze is broken. For the “Go” trend to remain healthy we would look for the Squeeze to be broken 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. 5 sectors are in relative “Go” trends. $XLE, $XLI, $XLB, $XLP, $XLU, and $XLRE 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 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 an out-performing sector and paints strong relative “Go” bars and has done now for consecutive weeks. When we look at the below RelMap we can see that the steel index in the top panel has once again started to paint strong blue “Go” bars on a relative basis.
$ZEUS Looks for New High in “Go” Trend
GoNoGo Trend shows that $ZEUS has been in a “Go” trend since late October. Since then we have seen a series of higher highs and higher lows as price climbed over $50. After the last higher high we saw a Go Countertrend Correction Icon (red arrow) indicating that price may struggle to go higher in the short term. Indeed, we saw GoNoGo Trend paint a series of weaker aqua bars as price fell from the high. GoNoGo Oscillator fell to test the zero line from above during that time. As GoNoGo Oscillator found support at zero and rallied back into positive territory on heavy volume, we see that GoNoGo Trend began to again paint strong blue “Go” bars and price was able to creep above prior high resistance. We will watch to see if price can consolidate at these elevated levels this week before potentially moving higher.
$ATI Breaks to New High in “Go” Trend
The chart of $ATI below shows that price has been in a “Go” trend for several months making a series of higher highs and higher lows. During this time, GoNoGo Oscillator has been primarily supported by the zero line confirming price’s movements higher. Most recently, after a Go Countertrend Correction Icon (red arrow) we saw price move slightly away from the high as GoNoGo Oscillator fell to test the zero line from above. With momentum bursting back into positive territory on heavy volume we see that GoNoGo Trend was able to paint strong blue “Go” bars and price climbed above overhead resistance. With momentum again in line with the underlying “Go” trend we will look for price to consolidate at these elevated levels this week before potentially moving higher.
