Good morning and welcome to this week’s Flight Path. The equity trend stayed strong this entire week as we saw GoNoGo paint another entire week of bright blue bars. Treasury bond prices stayed in a “Go” trend as well but we saw weakness with aqua “Go” bars. U.S. commodities painted weaker aqua “Go” bars as well as the trend hangs on. The U.S. dollar saw strength return during the second half of the week as the indicator paints strong blue bars.
$SPY Shows Strength in “Go” Trend
The GoNoGo chart below shows that the “Go” trend continued this week with strong blue bars as price made another higher high. We do see a Go Countertrend Correction Icon (red arrow) indicating waning momentum as GoNoGo Oscillator falls from overbought territory. We will watch to see what happens to as the oscillator approaches the zero line.
The weekly chart shows another strong blue “Go” bar at another weekly higher close. This continues the remarkable run of bright blue “Go” bars and higher weekly highs. If we turn our eye to the oscillator panel we can see that we have returned to overbought territory and on heavy volume. We will watch to see if this momentum wanes or if it continues to push price higher this week.
Treasury Rates Flash Uncertainty
GoNoGo Trend paints an amber “Go Fish” bar of uncertainty this week as rates continue their rally from the recent lows. We look to the oscillator panel and we see that GoNoGo Oscillator is dipping its nose into positive territory at a value of 1. With momentum now positive, we will watch to see if GoNoGo Trend is able to flag a new “Go” trend.
Dollar Breaks to New Higher Highs
The chart below shows that the dollar remains in a “Go” trend and price has climbed to a new higher high on strong blue bars. This comes after GoNoGo Oscillator was able to break out of a GoNoGo Squeeze into positive territory and on heavy volume. This resurgent momentum in the direction of the underlying “Go” trend gave price the push it needed to break to new highs.
Oil Reverts to “NoGo” Pink Bars
GoNoGo Trend shows that the “NoGo” trend returned after a couple of uncertain amber “Go Fish” bars last week. We see that the trend is weak as it paints pink bars. GoNoGo Oscillator is testing the zero line again and we see the beginnings of a GoNoGo Squeeze. It will be important to note the direction of the break of the Squeeze in the coming days.
Gold Shows Continued Weakness
The chart below shows that the trend remains a weak “Go” as the indicator paints paler aqua bars. This comes as price continues to fall from the prior high and the ensuing Go Countertrend Correction Icon (red arrow). GoNoGo Oscillator has failed to find support at zero and we see it falling into negative territory at a value of -2. Momentum is now out of step with the trend and that is a concern for the gold bugs.
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. 1 sector is in a relative “Go” trend. $XLK, is painting relative “Go” bars.
Technology 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 $XLK. We saw in the above GoNoGo Sector RelMap that $XLK is the only out-performing sector and paints strong relative “Go” bars. When we look at the below RelMap we can see that the computer services index in the lower panel is painting strong blue “Go” bars on a relative basis.
$CALX Bursts Higher in New “Go” Trend
GoNoGo Trend shows that there is a new “Go” trend as we see a strong blue “Go” bar jump through prior high resistance after a series of amber “Go Fish” bars of uncertainty. This comes after GoNoGo Oscillator broke out of a Max GoNoGo Squeeze. We now see heavy volume as market enthusiasm is strong. We will watch to see if price can consolidate at these elevated levels in the coming days.
$NTCT Sets New High in “Go” Trend
The chart below shows that $NTCT is in a strong “Go” trend. Since entering the “Go” trend at the end of August we have seen a series of higher highs and higher lows as price has climbed over $28. During this trend, GoNoGo Oscillator has been at or above the zero line finding support at this level each time it has tested it. Most recently, we have seen price break above resistance on a strong blue “Go” bar. Momentum is in positive territory but no longer overbought at a value of 4 on heavy volume. We will look for price to consolidate at these elevated levels.
