$SPY, the SPDR ETF for the S&P 500 rallied strongly off the lows yesterday.
However, looking at the daily GoNoGo Chart we can see that there are still challenges that lie ahead for this “Go” trend. Over the last few weeks we have noted the bearish divergence that has been evident between price and the GoNoGo Oscillator. Momentum continued to fall away until the GoNoGo Oscillator was at the zero line. As we know, this level should act as support in a “Go” trend but on the 12th of May it broke below zero on heavy volume. Since then, it has tested the zero line from below and found it to be resistance. We will need to see enough positive momentum come back to push the GoNoGo Oscillator back into positive territory for us to have renewed confidence in this “Go” trend. If that doesn’t happen, we will expect to see the trend color change in the price panel above.
