Good morning and welcome to this week’s Flight Path. The equity “Go” trend has returned as we see a strong blue bar coming after a string of amber “Go Fish” bars of uncertainty. Treasury bond prices are painting strong purple bars as the “NoGo” trend continues. U.S. commodities are in a “Go” trend but we see weaker aqua bars this week and the dollar continues to paint “Go” bars but the indicator also shows weakness with paler aqua color.
$SPY Paints a Strong Blue “Go” Bar
The GoNoGo chart below shows that after almost a week of uncertainty GoNoGo Trend was able to identify a new “Go” trend with a strong blue bar. This comes as price climbs to new highs. We will watch to see if price can consolidate at these levels to give the trend a chance to continue. GoNoGo Oscillator is falling from overbought territory and that has triggered a Go Countertrend Correction indicating that price may struggle to go higher in the short term.
On the longer term chart, GoNoGo Trend was able to paint a strong blue bar after a run of five weaker aqua bars. This comes as price closes at new highs for the first time in over a month. GoNoGo Oscillator has found support at the zero line and as it bounces back into positive territory we see a Go Trend Continuation Icon (green circle) under the price bar which tells us that momentum is resurgent in the direction of the “Go” trend. 
Treasury Rates Remain in “Go” Trend but the Indicator Paints Weakness
GoNoGo Trend shows that the “Go” trend has been weak for some time now. On the last bar of the week we even see price gapping lower. This puts it at levels where we may see support from prior lows. GoNoGo Oscillator has fallen into negative territory however, breaking out of a GoNoGo Squeeze. This will put some pressure on price to move lower still. We will need to see the oscillator regain positive territory if the “Go” trend is to remain in place.
The Dollar Falls Further Amid More Weakness
GoNoGo Trend is painting weak aqua bars still as price falls further from the recent high. While the “Go” trend is in place, continued weakness is pushing price to slightly lower lows. If we turn our attention to the oscillator panel we can see that it has failed to find support at the zero line and is falling into negative territory on heavy volume. We will watch to see if this causes price to fall further from here.
$USO Falls from Recent High
$USO is falling from recent highs and we saw mostly aqua bars this week as the trend shows some weakness. Since the Go Countertrend Correction Icon (red arrow) we saw just after the most recent high GoNoGo Oscillator has fallen to test the zero level from above. It has remained there for a few bars now as a tug of war plays out between investors at this level. We will watch closely to see whether the oscillator can find support here and bounce back higher into positive territory. If it does we will know that momentum is resurgent in the direction of the “Go” trend and we can look for price to rally.
The New “Go” Trend Tests Prior Highs
GoNoGo Trend painted a string of strong blue “Go” bars this week as price rallied strongly and rushed north to test prior highs from late October. We have seen a Go Countertrend Correction Icon (red arrow) above price signaling to us that price may struggle to move higher in the short term. The trend remains strong with a bright blue bar and GoNoGo Oscillator is in positive territory but no longer overbought at a value of 4.
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. 2 sectors are in relative “Go” trends. $XLE, and $XLF, are painting relative “Go” bars.
Financials Sub-Group RelMap
The chart below shows a relative trend breakdown of the sub groups within the communications sector again this week. The Sub-Group RelMap plots the GoNoGo Trend of each sub index to the $XLF. We saw in the above GoNoGo Sector RelMap that $XLF is strong relatively speaking as it paints aqua relative “Go” bars to the S&P 500. If we look at the breakdown of the groups in the map below we can see where that outperformance is coming from. Painting strong “Go” bars in the 8th panel is the mortgage finance sub group.
$FNMA Looks for Support in “Go” Trend
Below we see that the “Go” trend is still in place for $FNMA, however it is being tested as we see over a week long string of weaker aqua bars. This comes after we saw a Go Countertrend Correction after the most recent high just over a week ago. When we look at the oscillator panel we see that volume remains heavy but that momentum has fallen to test the zero line from above. We will watch to see if it finds support at this level. If it finds support here, and rallies into positive territory then that will be a good sign for the “Go” trend. We may well then see a new higher low as price tries to set up for a new higher high in the coming days and weeks.
$SNFCA Enters New “Go” Trend
We can see in the chart below that $SNFCA has entered a new “Go” trend. This is an interesting chart because we saw a great deal of GoNoGo activity as price was navigating important levels. After hitting a new high in December, we saw a Go Countertrend Correction Icon (red arrow) informing us that price may struggle to move higher and indeed we saw a long run of weaker aqua bars as the oscillator broke into negative territory. GoNoGo Trend then painted some “NoGo” bars as price struggled with resistance from the downward trend line. As GoNoGo Oscillator broke back into positive territory on heavy volume price broke above resistance and GoNoGo Trend painted a string of amber bars as the market deliberated. Now, we see a fresh “Go” bar as price tries to climb near prior highs.
$ET Pushes Higher on Bright Blue Bars
Finally price has taken out the high from December as we can see on the chart below. GoNoGo Trend paints strong blue “Go” bars as price climbed higher for a week straight and we will now be able to use this level as possible support going forward. If price can consolidate above this level then we will watch to see if it can climb further over the coming days and weeks. GoNoGo Oscillator shows that momentum is in positive territory supporting the “Go” trend and volume is heavy.
