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UTILITIES TRYING TO “POWER” UP EQUITY MARKETS

Good morning and welcome to this week’s Flight Path. We saw continued weakness this week in U.S. equities although there was a big rebound on Friday’s bar. Treasury bond prices entered a period of uncertainty as we see GoNoGo Trend paint successive amber “Go Fish” bars. The U.S. commodities index flipped back to a weak “NoGo” as the dollar was able to manage to paint more weaker aqua “Go” bars.

$SPY Tries to Halt Fall

After the Go Countertrend Correction Icons we saw over a week ago, price has struggled and that was understandable as those icons tell us that momentum has waned. We will watch now to see if price can set a new higher low which would suggest the “Go” trend will continue for now. Friday’s bar was positive in that regard. We turn our eye to the oscillator panel and we see that the price action has caused GoNoGo Oscillator to fall to test the zero line from above. As it stays there, we see the beginning of a GoNoGo Squeeze. If this level can hold as support and the oscillator can rally back into positive territory then we will see signs of Go Trend Continuation and can expect price to make an attack on the most recent high.

The larger weekly chart shows that we have set what looks to be a slightly higher high and that GoNoGo Trend is still painting strong blue “Go” bars. GoNoGo Oscillator is in positive territory at a value of 3 and is not yet overbought. Perhaps this suggests there is further room to run over this time frame.

Treasury Rates in Period of Uncertainty

GoNoGo Trend painted a string of amber “Go Fish” bars last week. An entire week of “Go Fish” bars is somewhat unusual and so we know that there are not enough criteria being met for GoNoGo Trend to be able to identify a trend in either direction. As the market makes up its mind regarding price direction, we can see that GoNoGo Oscillator is in positive territory having been able to break above the zero line. With positive momentum, it is perhaps more likely that we will see a “Go” trend emerge in the panel above.

Dollar Shows Continued Weakness in “Go” Trend

This week we saw more weakness after a single amber “Go Fish” bar. We can see that price has struggled to go anywhere now for several weeks and it has been some time since we last saw a strong blue “Go” bar. When we look at the oscillator panel, we can see that there is a tug of war happening between buyers and sellers at this level. GoNoGo Oscillator is riding the zero line and we see a Max GoNoGo Squeeze. It will be important to watch for the direction of the Squeeze break to help determine price’s next direction.

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