- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted November 20, 2025 at 5:31 am
By C. Theodore Hicks II, CMT, CFP, CKA
1/ Mag7 Searching for Support
2/ International Broke Trend
3/ BioTechs Look Strong
4/ Not Sexy but Looks Good
5/ Commodities
Investopedia is partnering with CMT Association on this newsletter. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.
Mag7 Searching for Support
Dictionary.com defines “facade” as “an outward appearance that is maintained to conceal a less pleasant or creditable reality”. That seems like an appropriate term for what we’ve been witnessing. The S&P 500 has been up, but it’s really just been a facade.
And now that facade seems to be crumbling.
The first chart for today is MAGS, an equal-weight ETF that offers exposure to those top 7 stocks commonly referred to as the Magnificent 7. Considering the fact that ~50% of the S&P 500 is currently below their own 200-day moving average, we can say that ~50% of the S&P 500 is in a negative trend. Since the Mag7 has had such an outsized influence on the S&P 500’s performance, the support zone that I’ve highlighted on the chart really needs to hold. Unfortunately, RSI is not showing that it is “oversold” just yet.
International Broke Trend
As I scanned through charts before writing this newsletter, VEA stood out. While it is not been the strongest sector, take a look at how it has hugged that 50-day moving average (red line). Unfortunately, VEA fell below that moving average / trendline on Wednesday … and, it did so on above average volume.
More bad news.
BioTechs Look Strong
The Investment Policy Statement that we operate under does not mandate that we remain fully invested at all times. However, I know plenty of people in the industry that do not have that luxury. So, if you are required to buy something, here’s an option: biotech.
Unfortunately, we are not in this one – and I’m okay with that as it never met the very specific criteria that we are looking for when we add a tactical position. However, since there are plenty of studies that show the efficacy of relative strength, and this clearly has relative strength, I do see some good news for us: ADX (bottom pane) is suggesting that this trend may pause a bit. If price can pause and create what we believe to be a low-risk entry, I’d happily jump on board. But since it never met our entry criteria, we didn’t buy it.
As an aside, if you do not have a very specific entry criteria, you should consider defining one. Investing successfully over a long period of time comes down to process. That process needs to be well defined.
Not Sexy but Looks Good
Perhaps that’s not an appropriately professional heading, so I won’t be surprised if the editor changes it, but … Utilities are just not something I really want to own. They are typically considered slow movers, not very “growthy”, etc. Why would I want to allocate capital to something like this sector?
Well, this setup looks attractive to me. When we are looking for a “low-risk” entry, this is one of the set-ups we consider. And, given how many ugly charts I see right now, this one does not look bad at all.
Commodities
The final chart for today is a weekly chart for DJP, the iPath Bloomberg Commodity Index ETN. DJP has been on a nice little run since August. If you were to look at the daily chart, it’s been a bit of a sloppy run, and never really created a compelling entry from our point-of-view. However, it’s relative strength has been gaining so I want to pay attention. Considering the fact that commodities typically demonstrate a lower degree of correlation to equities, and considering the fact that there are so many ugly equity charts out there, we might want this in the portfolio.
That said, the last couple of weeks has found DJP bumping up against what could be minor resistance from back in 2022. As far as I’m concerned, I would love to see this pause a bit longer. We’re not buying this here, but we certainly need to note the recent gains in relative strength.
—
Originally posted 19th November 2025
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Exchange Traded Commodities (ETCs) are only available from Interactive Brokers for IBKR LLC, IBKR Canada, IBKR Hong Kong and IBKR Singapore entities.
Related Articles
Join The Conversation
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!