Good morning and welcome to this week’s Flight Path. Equities had another tough week last week and we saw an amber “Go Fish” bar for the first time since this latest “Go” trend began. Encouragingly, GoNoGo Trend painted a weak aqua “Go” bar on the last day of the week but has the damage been done? Treasury bond prices also fell briefly out of the “Go” trend but also ended the week with an aqua “Go” bar. U.S. commodities fell deeper into a “NoGo” as the indicator painted strong purple bar. The dollar still cannot make up its mind and we saw a string of “Go Fish” this past week.
$SPY Manages to Maintain a “Go” for Now
Price has fallen further since the Go Countertrend Correction Icons that we saw at the top. This week a “Go Fish” bar was painted as the market expressed its uncertainty. This comes as GoNoGo Oscillator crashed through the zero line into positive territory on heavy volume. We know that in a healthy trend the oscillator should find support at that level and so we know now that momentum is out of step with the “Go” trend. We will be wary here of more price deterioration.
A hint of weakness on the weekly chart. For the first time in almost three months we did not close in a strong blue bar. We also note the Go Countertrend Correction Icon (red arrow) that appeared at the top. This suggests that price may struggle to move higher in the short term because momentum has waned. We will look to see if the oscillator finds support at zero as it gets closer.
Treasury Rates in “NoGo” but Paint Weak Pink Bars
This week we saw a week of uninterrupted pink “NoGo” bars. Price seems to have set a new lower high as we ended the week lower. If we turn our eye to the GoNoGo Oscillator we can see that it is testing the zero line from below. If this NoGo trend is to remain in place we expect to see this level act as resistance. If GoNoGo Oscillator is turned away into negative territory we will look for price to make an attempt at new lows.
Continued Uncertainty for the U.S. dollar
Its been a few weeks now that we’ve been talking about uncertainty in the U.S. dollar. This week we saw “Go Fish” bars dominate as price moved mostly sideways. GoNoGo Oscillator is riding the zero line after rising to it from below. We see a GoNoGo Squeeze climbing to its Max. We will pay close attention to the direction of the break. If the oscillator breaks back into negative territory then we will look for price to move lower.
Tyler Wood, CMT, co-founder of GoNoGo Charts, is committed to expanding the use of data visualization tools that simplify market analysis to remove emotional bias from investment decisions.
Tyler has served as Managing Director of the CMT Association for more than a decade to elevate investors’ mastery and skill in mitigating market risk and maximizing return in capital markets. He is a seasoned business executive focused on educational technology for the financial services industry. Since 2011, Tyler has presented the tools of technical analysis around the world to investment firms, regulators, exchanges, and broker-dealers.
Alex Cole, CEO and Chief Market Strategist at GoNoGo Charts, is a market analyst and software developer. Over the past 15 years, Alex has led technical analysis and data visualization teams, directing both business strategy and product development of analytics tools for investment professionals.
Alex has created and implemented training programs for large corporations and private clients. His teaching covers a wide breadth of Technical Analysis subjects, from introductory to advanced trading strategies.
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