By Tyler Wood, StockCharts.com, 2024-07-08
Good morning and welcome to this week's Flight Path. The week ended with all of the major asset classes painting "Go" bars. However, we saw a little uncertainty in places during trading. After a few bars of weaker aqua "Go" bars, we saw equities finish with strong blue bars at new all time highs. Treasury bond prices saw a dip into uncertainty but ended strongly. The U.S. commodities index rebounded after a "Go Fish" bar with a few strong blue bars and the dollar hung onto weaker aqua "Go" bars.
$SPY Looks Strong at the End of the Week
After a few weeks that now look like consolidation, we saw price hit new highs this week on strong blue "Go" bars. This comes after a few weaker aqua bars moved price sideways and GoNoGo Oscillator fell close to the zero level. It rallied quickly though and we are seeing strong momentum as price climbs.
Another higher weekly close tells us that the "Go" trend remains strong on the larger timeframe. We now have seen 9 consecutive strong blue "Go" bars since the period of weakness in April. GoNoGo Oscillator stays overbought for another week which tells us how enthusiastic the market is as price soars.
Treasury Rates Return to Strong "NoGo" bars
Treasury rates jumped higher earlier in the week and it was enough to make GoNoGo Trend paint an amber "Go Fish" bar. However, the "NoGo" returned as the week finished with first pink and then a strong purple bar. GoNoGo Oscillator which had broken into positive territory has quickly returned to test the zero line from above. It will be important to see if this level now offers support.
Dollar Falls from Highs on Weak Aqua "Go" Bars
The daily chart below shows that price fell sharply from the most recent high. This week saw a predominance of weaker aqua bars as the "Go" trend shows weakness. GoNoGo Oscillator has fallen to test the zero line from above and volume is heavy. We will pay close attention to the oscillator panel this week to see if the zero level offers support. If it does, we will be able to infer that the "Go" trend is still healthy.
