Flight Path – March 10th 2021
|Last week’s price action exhibited a tug of war between the hope for growth and the fear of inflation. Thursday’s correction was a sharp awakening for many investors that were accustomed to a purely upward trending index. The GoNoGo Trend® of the S&P painted an amber bar on the daily chart reflecting the questionable trend conditions. Friday brought heavy buying power and equities regained all they had lost the day before.|
Choppy trading sessions did not reflect a shift in the underlying trends or global macro conditions of this early-stage bull market. The GoNoGo Cross-Asset Heatmap® below reinforces the risk-on thesis with equities, commodities, and cryptocurrencies still in “Go” trends. The wildcard remains the dollar as it rallied sharply this week in response to equity volatility.
The GoNoGo Heat Map® above shows us the daily trend performance of five asset classes: Equities, Bonds, Commodities, Currencies, and Digital Assets from the US perspective.
Panel 1 – Stocks ended the week in a “Go” trend, having dipped into neutral territory on Thursday. S&P 500 SPDR ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P.
Panel 2 – Government bonds, continue to paint “NoGo” bars, as the “NoGo” trend remains secure. $IEF tracks a market-value-weighted index of debt issued by the US Treasury with 7-10 years to maturity remaining.
Panel 3 – Commodities are a “Go” and ended the week painting strong “Go” bars. $USCI tracks an equal-weighted index of 14 commodity futures contracts and holds at least one precious metal, industrial metal, energy, livestock, soft, and grain commodity.
Panel 4 – The US Dollar rallied this week, bouncing back into the “Go” trend. The dollar has been vacillating on the daily chart over the last several weeks as it struggles to escape the long-term “NoGo” trend. $DXY is an index of the value of the United States Dollar relative to a basket of foreign currencies.
Panel 5 – Bitcoin’s “Go” trend continues as it consolidates after its recent all-time high.