{"id":109148,"date":"2021-10-29T02:29:00","date_gmt":"2021-10-29T06:29:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=109148"},"modified":"2022-11-21T09:48:50","modified_gmt":"2022-11-21T14:48:50","slug":"chart-advisor-unopposed-optimism","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-unopposed-optimism\/","title":{"rendered":"Chart Advisor: Unopposed Optimism"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-thursday-28th-october-2021\">Thursday, 28th October, 2021<\/h2>\n\n\n\n<p><strong>1\/<\/strong>&nbsp;<strong>Indexes rise despite&nbsp;lackluster&nbsp;GPD report<\/strong><\/p>\n\n\n\n<p><strong>2\/&nbsp;Mastercard dips as rival Visa swoons&nbsp;<\/strong><\/p>\n\n\n\n<p><strong>3<\/strong>\/&nbsp;<strong>Visa lagging key sectors&nbsp;<\/strong><\/p>\n\n\n\n<p><strong>4\/&nbsp;The bottom line<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-indexes-rise-despite-lackluster-gpd-report\">1\/ <strong>Indexes Rise Despite Lackluster GPD Report&nbsp;<\/strong><\/h2>\n\n\n\n<p>Stocks continued higher amid strong third-quarter earnings reports, mixed economic data, and federal spending developments in Washington D.C. The iShares Russell 2000 ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=iwm&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">IWM<\/a>)&nbsp;led&nbsp;the way higher, adding 1.7%. Invesco\u2019s Nasdaq 100 ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=qqq&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">QQQ<\/a>)&nbsp;rose&nbsp;1%, setting another record high. State Street\u2019s S&amp;P 500 Index ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">SPY<\/a>)&nbsp;and&nbsp;Dow Jones Industrial Average ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=dia&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">DIA<\/a>)&nbsp;rose&nbsp;0.8% and 0.4%, respectively.&nbsp;<\/p>\n\n\n\n<p>Weekly first-time unemployment claims came in at 281,000, lower than the 289,000 expected. However, the advanced look at Q3 gross domestic product were lower than forecast at only 2% compared to 6.7% a quarter ago. The 2% growth was less than the expected 2.7%, as the economy continues to manage supply chain issues and the delta variant of COVID-19.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Investors were also keeping a close eye on the development of President Joe Biden\u2019s $1.75 trillion social spending and climate bill.&nbsp;<\/p>\n\n\n\n<p>The chart below compares the recent performance of SPY with State Street\u2019s Financial Sector ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlf&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">XLF<\/a>)&nbsp;and&nbsp;Technology Sector ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlk&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>). Positive earnings for&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/m\/megacap.asp?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">mega-cap<\/a>&nbsp;tech companies continue to push XLK higher, while XLF has seen similar results from stellar bank earnings. With both sectors continuing to excel, SPY could be buoyed higher before the end of the year.&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/1-19-1100x570.jpg\" alt=\"\" class=\"wp-image-109150 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/570;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-mastercard-dips-as-rival-visa-swoons\">2\/ <strong>Mastercard Dips as Rival Visa Swoons&nbsp;<\/strong><\/h2>\n\n\n\n<p>Shares of Mastercard (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=ma&amp;utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">MA<\/a>)&nbsp;slid&nbsp;1.5% after the company announced earnings results for the fiscal&nbsp;third-quarter. Analysts expected the credit services company to report $2.19 in&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/e\/eps.asp?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">earnings per share (EPS)<\/a>&nbsp;and $4.95 billion in revenue. MA beat on both metrics, reporting $2.37 in EPS and $4.98 billion in revenue for the quarter. Despite the earnings beat, MA stock perhaps has been dragged down by rival Visa\u2019s (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=v\" target=\"_blank\" rel=\"noreferrer noopener\">V<\/a>)&nbsp;disappointing&nbsp;forward guidance.&nbsp;<\/p>\n\n\n\n<p>Prior to earnings, option traders appeared to be positioned for the stock to rise in the near term, as call options accounted for more than 56% of the total options in the open interest.&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/iv.asp?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=25503609&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\">Implied volatility<\/a>&nbsp;suggests that the majority of put options had been sold, indicating further that option traders were bullish ahead of MA earnings.&nbsp;<\/p>\n\n\n\n<p>MA stock has fallen to a below average range and is trading below its 20-day moving average. However, trading volumes on Thursday favor calls over puts at a more than 2-to-1 ratio, indicating that option traders could be positioning themselves for MA stock to rise in the future. Additionally, after accounting for intrinsic value, call options currently cost more than puts, indicating that there is a greater demand for placing speculative bets that MA\u2019s share price will rise.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/2-20-1100x599.jpg\" alt=\"\" class=\"wp-image-109151 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/599;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-visa-lagging-key-sectors\">3\/ <strong>Visa Lagging Key Sectors&nbsp;<\/strong><\/h2>\n\n\n\n<p>Investors continue to sell off shares of Visa (V) after the company offered lower-than-expected future guidance for revenue growth in its fiscal fourth-quarter earnings report. Visa announced $1.62 in EPS and $6.56 billion in revenue, ahead of analyst forecasts of $1.54 in EPS and $6.51 billion in revenue. V shares fell 7% on Wednesday, the day the report was released, and shed an additional 2% on Thursday.&nbsp;&nbsp;<\/p>\n\n\n\n<p>The chart below compares the recent performance of Visa with State Street\u2019s Financial Sector ETF (XLF) and Technology Sector ETF (XLK). As one of the largest electronic payment transactions companies in the world, V is a top five holding of XLK. As positive bank earnings have sent XLF higher, similarly, positive earnings from mega-cap tech companies have boosted XLK.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Visa has underperformed both sectors, falling 3% year-to-date, while XLF and XLK have risen 38% and 25%, respectively, in the same time frame. Even after the multi-day drop, option traders appear to be positioned for V shares to continue to fall. While call options currently outnumber puts in the open interest for V, implied volatility suggests that these call options are being sold more than bought, reflecting a bearish sentiment toward V stock going forward.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/3-22-1100x604.jpg\" alt=\"\" class=\"wp-image-109152 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/604;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-the-bottom-line\">4\/ <strong>The Bottom Line&nbsp;<\/strong><\/h2>\n\n\n\n<p>Even though the gross domestic product report was lower than forecast, and shares of key companies Mastercard and Visa retreated, investors were confident taking stock prices to new highs.&nbsp;<\/p>\n\n\n\n<p>  &#8212; <\/p>\n\n\n\n<p> Originally posted on 28th October, 2021  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stocks continued higher amid strong third-quarter earnings reports, mixed economic data, and federal spending developments in Washington D.C. The iShares Russell 2000 ETF (IWM)\u00a0led\u00a0the way higher, adding 1.7%. <\/p>\n","protected":false},"author":364,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[14,18,6,19,8,9,22,26,3],"tags":[3057,208,2782,262,2006,1302],"contributors-categories":[13686],"class_list":{"0":"post-109148","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-etfs","7":"category-macro","8":"category-north-america","9":"category-options","10":"category-region","11":"category-securities","12":"category-stocks","13":"category-text-articles","14":"category-traders-insight","15":"tag-dia","16":"tag-iwm","17":"tag-qqq","18":"tag-spy","19":"tag-xlf","20":"tag-xlk","21":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is 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