Go No Go Chart shows a cautiously optimistic market
The term “go/no go” refers to the pass/fail test process that NASA flight controllers perform to monitor the various systems for operation and readiness before a spaceflight mission launch can proceed.
Investing in the stock market is also accompanied by uncertainties and indecisions. Trading involves evaluating the upside potential to the downside risk taken.
The folks at GoNoGo Charts have developed technical indicators that help traders and investors better process the trading data and make informed decisions.
GoNoGo Charts indicators revolve around the concept that momentum goes hand in hand with trend analysis.
The velocity of price change identifies the dominant trend and the sustainability and conviction level of the trend.
Rising momentum signals the continuation of an uptrend, and declining momentum warns of a weakening trend or an impending trend reversal.
Trend identification is the single-most-important part of technical analysis. Merging statistical analysis (velocity of price change) with the basic principles of technical analysis (trend identification, momentum, etc.), the GoNoGo technical indicator via visual color prompts determines if the market or security is ready to “Go” (buy) or “NoGo” (delayed buying).
Many technical indicators are complex due to the mathematical models involved and are open to various interpretations. GoNoGo Trend indicators simplify decision-making, with only two signals – Go (buy) or NoGo (delayed buying).
When the trend is the strongest, it notifies the trader by painting the price bar bright blue.
When slightly less bullish, the color turns to aqua.
Amber bars represent an uncertain or no trend, often occurring when the trend transitions from bull to bear and vice versa.
Pink bars denote bearishness, and dark purple when the bearish trend accelerates.
SPX GoNoGo update:
On 8/16/22, a bright blue bar appeared (strong Go or buy), suggesting the start of a sustainable rally.
However, the summer 2022 rally failed to surpass pivotal resistance near the 200-day ma (currently at 4,023.5) and the Jan 2022 downtrend (4,039).
After sustaining a bright blue strong Go, the bars turned aqua (weak Go) three days later on 8/19/22, signaling consolidation or correction.
The selling quickly accelerated over the next two weeks as the aqua bars turned pink (No Go) and dark purple (strong No Go).
On 10/13/22 and an oversold condition developed, prompting the next oversold rally as the bars turned pink during the second half of Oct 2022 and aqua during Nov 2022.
As the rally picked up momentum into early-to-mid Dec 2022, the rally stalled at the 200-day ma (red) and Jan 2022 primary downtrend (black).
The failure to breakout above formidable resistance prompted another decline below the 50-day ma (currently at 3,939) as the color chart bar turned pink and dark purple.
The color bars trading between aqua and pink show the bears controlling the marketplace.
After starting the beginning of the new year with selling pressures, a day before the 1/10/23 gap-up, the bar turned amber (uncertain or no trend).
Amber bars often occur when the trend transitions from bull to bear and vice versa.
Another inflection nears as the bulls and bears converge toward another critical battle.
The ability to surge above the 50-day ma hints at an improving trend. However, the 200-day ma and primary downtrend remain formidable resistance.
In the past three days, the bars have been aqua (weak Go), bright blue (strong Go), and bright blue (strong Go). Will this produce a trendline and moving average breakout?
Enclosed are the current GoNoGo signals for SPX, INDU, NYA, COMPQ, and NDX.
SPX: NoGo bars (aqua on 1/23, bright blue on 1/24, and bright blue on 1/25/23)
INDU: NoGo bars (amber on 1/23, aqua on 1/24, and aqua on 1/25/23)
NYA: NoGo bars (bright blue on 1/23, bright blue on 1/24, and bright blue on 1/25/23)
COMPQ: NoGo bars (aqua on 1/23, bright blue on 1/24, and bright blue on 1/25/23)
NDX: NoGo bars (amber on 1/23, aqua on 1/24, and bright blue on 1/25/23)
In the past three days, NoGo signals show bullish trend developments from NYA (bright blue, bright blue, and bright blue), SPX (aqua, bright blue, and bright blue), and COMPQ (aqua, bright blue, and bright blue).
INDU shows the weakest of the popular indexes with NoGo signals (amber, aqua, and aqua).
The overall NoGo signals over the past three (3) days suggest traders and investors are cautiously optimistic.
Nonetheless, a convincing surge above the 200-day ma and the 1-year primary downtrend helps to confirm the start of another sustainable rally.