Good morning and welcome to this week’s Flight Path. Equities consolidated their new “Go” trend this week. We see that the indicator painted mostly strong blue bars even as price moved mostly sideways. Treasury bond prices remained in a “Go” trend but painted an entire week of weaker aqua bars. U.S. commodity index fell back into a “NoGo” after we had seen a few amber “Go Fish” bars and ended the week painting strong purple bars. The dollar, which had been showing “NoGo” strength ended the week painting weaker pink bars.
$SPY Consolidates in “Go” Trend
The GoNoGo chart below shows that after entering a new “Go” trend just over a week ago, price has consolidated and moved mostly sideways. GoNoGo Trend has been able to paint “Go” bars with a sprinkling of weaker aqua in the mix. The end of the week saw strong blue bars return and price toward the top of the range. GoNoGo Oscillator is in positive territory at a value of 3. With momentum on the side of the “Go” trend and not yet overbought, we will watch to see if price can challenge for new highs this week.
The longer time frame chart shows that the trend returned to strength over the last few weeks. Last week we saw a strong blue “Go” bar with price closing at the top of the weekly range, close to where it opened. Some might call this a dragonfly doji, having slightly bullish implications. Since finding support at the zero level, GoNoGo Oscillator has continued to climb into positive territory now at a value of 3. Momentum is firmly on the side of the “Go” trend. We will look for price to make an attempt at a new high in the coming weeks.
Treasury Yields Paint Weaker “NoGo” Trend
Treasury bond yields remained in a “NoGo” trend this week but the GoNoGo Trend indicator painted a string of weaker pink bars. We can see this happened after an inability to set a new lower low. GoNoGo Oscillator is riding the zero line as a Max GoNoGo Squeeze is in place. It will be important to note the direction of the Squeeze break to determine the next direction for yields.
The Dollar’s “NoGo” Weakens
After a strong lower low we see the dollar rallied into the end of the week and GoNoGo Trend painted weaker pink “NoGo” bars. GoNoGo Oscillator has risen sharply to test the zero line from below and we see heavy volume at these levels. We will watch to see if the Oscillator finds resistance at the zero line and if it gets turned away back into negative territory we will expect NoGo Trend Continuation.
USO Fails Again at Attempted Trend Change
We saw another amber “Go Fish” bar at the top of the range at the beginning of last week. Just like the time before, GoNoGo Trend quickly returned to paint “NoGo” colors, this time after only one bar of uncertainty. We now see a strong purple “NoGo” bar as price moves lower. GoNoGo Oscillator is back at the zero line and volume is heavy. There seems to be a tug of war at these levels and we will watch to see in which direction the oscillator moves next. A move back into negative territory would confirm the “NoGo” and tell us that momentum is resurgent in the direction of the underlying trend.
Gold Remains in Strong “Go” Trend
The daily chart of $GLD below shows that prices consolidated at highs this week and GoNoGo Trend painted a week of strong blue “Go” bars. We will watch to see if price can climb from here. GoNoGo Oscillator has fallen toward the zero line and is at a value of 1. We will watch for support at zero if it gets there and if the oscillator stays at or above that level we will look for trend continuation and price to make an attempt at a new higher high.
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. We can see that there is a lot of relative outperformance on this map. 7 sectors are in relative “Go” trends. $XLF, $XLI, $XLB, $XLV, $XLP, $XLU, $XLRE are painting strong blue bars.
Industrials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the industrials sector. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLI. We can see from the below map that the defense index (10th panel) is painting strong relative “Go” bars.
$AVAV Gaps into Strong Blue “Go” Trend
The chart below shows that after a bar or two of uncertainty (amber “Go Fish” bars), the “Go” trend returned in force with strong blue bars. This comes after a strong bounce off the zero line for the GoNoGo Oscillator. We also see that there is heavy volume as GoNoGo Oscillator moves back into positive territory. With momentum therefore resurgent in the direction of the “Go” trend, we will look for price to move higher from here.
$BYRN Surging in New “Go” Trend
$BYRN hit new lows in early August and soon after we saw GoNoGo Oscillator burst through the zero level and then quickly retested it, bouncing back into positive territory. This told us that perhaps the “NoGo” trend was in trouble. A few bars later, after an amber “Go Fish” bar we see GoNoGo Trend paint a string of weaker aqua “Go” bars before strengthening to strong blue bars. GoNoGo Oscillator is now in positive territory but not overbought, confirming the “Go” trend that we see in price. We will look to see if price can climb higher from here.
