On occasion I like to use traditional technical tools in conjunction with the GoNoGo Indicators. When key levels are apparent it adds weight to analysis.
Previously we noted that the weekly chart could help determine the next major move for the SPX. We saw how for the last several weeks it has been finding resistance at the zero line (grey arrow).
For the rally we have seen off the lows in March to continue, we need to see momentum finally turn positive.
Until that happens the long term trend is still down. This week, price has flirted with the Fibonacci golden ratio level, retracing 61.8% of the fall since the high in February. If price is rejected at this level, the GoNoGo Oscillator will likely fall negative again and the GoNoGo Trend indicator will remain bearish as price moves lower. Click here ...
Cable has taken a turn on the daily chart! The GoNoGo Oscillator was able to break above zero a few weeks ago (first arrow) and has been riding the zero line for over a week before finally turning up today (second arrow). This is giving confirmation of the trend change identified by the GoNoGo Trend indicator above, which flagged a “Go” yesterday followed by another blue bar today.
Prior highs of 1.265 could likely act as resistance but a move above that level would signal the bulls are in control. Click here...
There is a lot here to look at! But the GoNoGo Chart tries to make it easy to understand. The daily trend is a “Go”, although we have seen a lower high and the appearance of consolidating price action.
We will be looking closely at the GoNoGo Oscillator in the coming few days to see if it can find support at zero. Remember, if the trend is healthy, momentum should stay positive and the GoNoGo Oscillator should bounce off the zero line.
To see this concept in action, look at the arrows on the lower panel highlighting the importance of having the objective zero line as support or resistance depending on the trend that has been identified by the GoNoGo Trend.
If the GoNoGo Oscillator rallies from zero we expect price to remain a “Go” and to test 1740 and push for a new high. Click here ...
Since the last “NoGo”, the currency pair moved down and made a series of lower lows. During that time, the GoNoGo Oscillator stayed below zero as we’d expect. However, momentum has turned positive. The GoNoGo Oscillator failing to stay below zero was the first suggestion that prices may start to rally. Now, it has retested the zero line and found support there as the GoNoGo Trend indicator has painted a few amber bars, indicating uncertainty in the strength of the down trend (represented by the pink/purple trend bars).
Concurrently, we are testing a resistance level that has held as both support and resistance over the last several weeks.
We will look to see if EURUSD can break through this level, and in doing so start to paint blue “Go” bars, or If it gets turned away and resumes its “NoGo” trend. Click here!
The GoNoGo Charts are painting a bearish picture on the Dollar Index, on a 4 hour chart. We see multiple elements of price action contributing to this outlook.
Prices rallied from a low on April 24th, supported by the trend line on the chart. This trend line was then broken, with an amber bar that is the trend neutral color of the GoNoGo Trend indicator. The color change on the break of this support adds conviction to this move.
At the same time the GoNoGo Oscillator was pushed into negative territory (lower panel). We know that this shouldn’t happen when an up trend is strong. For comparison, we can see how the oscillator stayed positive bouncing off zero while price was rallying and blue.
Finally, this current bar is a “NoGo”, indicating that the trend is now down for the Dollar Index. Click here
Investing in treasuries has always been seen as a flight to safety and this last few months has been no different. Although the S&P 500 has rallied sharply since falling into a bear market in March, it is still down around 14% year to date.
TLT , the treasury bond fund, on the other hand, is up almost 25% over the same period.
The GoNoGo Trend signaled a “Go” early in January and although it painted 1 amber bar on the 18th of March has continued to paint blue bars ever since. Note that there have been several green re-entry icons during this time.
Interestingly, we recently tested zero on the GoNoGo Oscillator and have bounced off it. This suggests a renewed upward move. The most recent re-entry green circle was April 20th. An upside target could be the prior high on March 9th .
This is a very long term GoNoGo chart of the S&P500 . Using monthly data, we can see that very rarely does the monthly GoNoGo Trend indicator paint a neutral amber bar and then not seen an extended down turn. This seems especially unlikely after an extended bull market. Last month, the GoNoGo Trend colored the bar amber, indicating uncertainty in the "Go" trend we've been in for many years.
The chart in the end will tell us what is happening, but it will be interesting to see where S&Pprices are at the end of April and we'll revisit this chart.
This chart is using log scale as is often recommended for long term charts or charts with significant price change.
Chipotle saw a hefty jump after topping earnings estimates earlier this week. GoNoGo Trend indicator gave a “GO” indicating the environment was bullish for the Mexican grill on April 14th, when prices were around $785.
However, note that there may be a little consolidation or minor correction here as this week’s action has caused the GoNoGo Oscillator to rise to an extreme. This means the stock has become overbought. With the price where it is, GoNoGo Charts is showing a red, short term correction arrow on the current, daily, bar. This suggests a possible correction within the trend, which at the moment is a “GO”. If this is confirmed at the close of the session, look for price to struggle for a few days.
After a great run up in price from a huge increase in subscriber growth during the global shutdown, we see a change in short term trend for Netflix on the GoNoGo Trend hourly chart.
Perhaps the good news was priced in before the earnings release. Since the correction on the 16th and 17th of April pushed the GoNoGo Oscillator through the zero line support into negative territory, it has barely been able to get back above zero (highlighted in lower panel).
It will be important to watch now if the GoNoGo Oscillator stays negative, supporting the bearish change we see in the GoNoGo Trend in the top panel. Click here for chart!