Go No Go Chart shows a "Weak Go"
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 helps identify the dominant trend and the conviction in the sustainability of the trend.
Rising momentum signals the continuation of an uptrend. Declining momentum warns of a weakening trend or an impending trend reversal.
Trend identification is the single-most-important part of technical analysis. By combining 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. The GoNoGo Trend indicators simplify the decision-making process 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 11/8/22, a bright blue appeared (strong Go or buy). And since then, the trend has been bright blue and aqua.
SPX subsequently rallied to 4,100.51 (12/1/22) or just below the 200-day ma (currently at 4,115) and Jan 2022 downtrend (4,134).
After sustaining a bright blue color, on 12/6/22 and 12/7/22, the bars turned aqua (weak Go), suggesting consolidation or correction.
It is critically important to monitor the market actions over the next few days as the trend may change again.
Although the chart bar has turned aqua over the past two days (12/6 and 12/7/22), it is too early to determine if the 12/1/22 high is another top or consolidation.
However, prior peaks occurred toward the end of the Mar 2022 oversold rally to the 3/29/22 high (4,637.30) and the Jun-Aug 2022 rally to 4,325.28 (8/16/22).
Previous tops occurred near the Jan 2022 primary downtrend. It took 8-10 trading days before the color chart bar turned pink or dark purple.
The bars whipping between aqua and pink suggest a battle between the bulls and the bears.
Four (4) trading days have passed since the 12/1/22 potential peak, suggesting another potential battle brewing between the bulls and the bears.
There are two key supports to watch on the current pullback. Initial support is 3,906.5-3,912, corresponding to the 11/10/22 breakout and the 11/17/22 low.
Pivotal secondary support is also visible at 3,818-3,860, coinciding with the 11/10/22 gap-up and the 50-day ma. Violation here and a pink or dark purple color bar warn of a top.
However, a successful test of 3,818-3,860 and an aqua or bright blue bar signals the resumption of the 10/13/22 rally.
Enclosed are the current GoNoGo signals for SPX, INDU, NYA, COMPQ, and NDX.
SPX: NoGo (aqua or weak Go) on 12/6 and 12/7/22
INDU: NoGo (aqua or weak Go) on 12/6 and 12/7/22
NYA: NoGo (aqua or weak Go) on 12/5, 12/6, and 12/7/22
COMPQ: NoGo (aqua or weak Go) on 12/6 and 12/7/22
NDX: NoGo (aqua or weak Go) on 12/6 and 12/7/22