Since investing involves uncertainties and unknowns, the ability to quantify the upside potential given the degree of the risk taken may help investors be more confident in their decision-making process.
Many trading systems, technical indicators, and strategies are available for the investment public. However, not all are useful and practical.
The GoNoGo Charts technical indicators offer another technical approach to analyzing trading data so investors can make informed decisions. GoNoGo Charts indicators revolve around the concept that momentum goes hand in hand with trend analysis.
The velocity of price change also helps to identify the dominant trend and the market’s conviction in the trend sustainability. Rising momentum often signals the continuation of an uptrend. Declining momentum warns of a weakening trend or an impending trend reversal.
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.
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 tend to be complex due to the mathematical models involved and are open to various interpretations.
The GoNoGo Trend indicators simplify the decision-making process, offering 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. The amber bars represent an uncertain trend, often occurring when the trend transitions from bull to bear and vice versa. Pink is bearish, and the dark purple color occurs when the bearish trend accelerates.
Most stock market indexes are trading in bear market territories (i.e., greater than a 20% drop from the high).
The pertinent question remains – is this a cyclical or structural bear?
Enclosed below are the GoNoGo Charts on popular markets. A brief review of the major market indexes shows that stock markets are trading at NoGo. The trend and the momentum do not favor sustainable rallies, not yet.