{"id":164328,"date":"2022-11-01T06:42:34","date_gmt":"2022-11-01T10:42:34","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=164328"},"modified":"2024-01-24T12:15:33","modified_gmt":"2024-01-24T17:15:33","slug":"chart-advisor-a-quiet-start-stocks-start-the-week-in-the-red-as-small-caps-and-energy-eke-out-gains","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-a-quiet-start-stocks-start-the-week-in-the-red-as-small-caps-and-energy-eke-out-gains\/","title":{"rendered":"Chart Advisor: A Quiet Start &#8211; Stocks start the week in the red as small caps and energy eke out gains."},"content":{"rendered":"\n<p><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>By&nbsp;<\/strong><\/a><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>J.C. Parets<\/strong><\/a>&nbsp;&amp;&nbsp;<a href=\"https:\/\/get.allstarcharts.com\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>All Star Charts<\/strong><\/a><\/strong><\/strong><\/p>\n\n\n\n<p><strong>1\/ Near-Term Breadth Improves<\/strong><\/p>\n\n\n\n<p><strong>2\/ Structural Downtrends Persist<\/strong><\/p>\n\n\n\n<p><strong>3\/ Dr. Copper Diverges<\/strong><\/p>\n\n\n\n<p><strong>4\/ Sugar Craves Out a Potential Top<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with All Star Charts on this newsletter, which both sells its research to investors, and may trade or hold positions in securities mentioned herein. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-near-term-breadth-improves\">1\/ <strong>Near-Term Breadth Improves<\/strong><\/h2>\n\n\n\n<p>When we look beneath the surface for signs of market health, we notice a slight improvement in internals.<\/p>\n\n\n\n<p>As you can see below, the percentage of new 21-day highs for the S&amp;P 500, <a href=\"https:\/\/www.investopedia.com\/terms\/s\/sp600.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 600<\/a>, and <a href=\"https:\/\/www.investopedia.com\/terms\/s\/sp-midcap-400-index.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 400<\/a> have increased significantly in recent weeks, hitting their highest levels since the summer.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"555\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1-1100x555.png\" alt=\"\" class=\"wp-image-164330 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1-1100x555.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1-700x353.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1-300x151.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1-768x387.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1-1536x775.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/1.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/555;\" \/><figcaption><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>This type of <a href=\"https:\/\/www.investopedia.com\/terms\/m\/market_breadth.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">breadth<\/a> improvement is constructive for stocks and an early sign that the market could be making a durable bottom.<\/p>\n\n\n\n<p>Although bulls still have work to do, we\u2019re looking for a <a href=\"https:\/\/www.investopedia.com\/terms\/b\/breadth-thrust-indicator.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">thrust<\/a> in 63-day highs in the near future. This could be the best confirmation of the shorter-term readings that have taken place in the last few weeks. After all, we need new short-term highs before we can get new long-term highs. For now, things may be headed in the right direction.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-structural-downtrends-persist\">2\/ <strong>Structural Downtrends Persist<\/strong><\/h2>\n\n\n\n<p>Despite burgeoning strength in the U.S., the outlook for global markets remains bleak.<\/p>\n\n\n\n<p>Interestingly, <a href=\"https:\/\/www.investopedia.com\/terms\/e\/emergingmarketeconomy.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">emerging markets<\/a>\u2014shown by the orange line\u2014are faring better than their <a href=\"https:\/\/www.investopedia.com\/terms\/a\/advanced-economies.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">developed market<\/a> counterparts\u2014shown by the blue line, as the chart below highlights.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1759\" height=\"1283\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2-1100x802.png\" alt=\"\" class=\"wp-image-164331 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2-1100x802.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2-700x511.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2-300x219.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2-768x560.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2-1536x1120.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/2.png 1759w\" data-sizes=\"(max-width: 1759px) 100vw, 1759px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1759px; aspect-ratio: 1759\/1283;\" \/><figcaption><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The outperformance from emerging market economies makes sense given the rising rate environment.<\/p>\n\n\n\n<p>It\u2019s no wonder cyclical <a href=\"https:\/\/www.investopedia.com\/terms\/v\/valuestock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">value sectors<\/a> such as <a href=\"https:\/\/www.investopedia.com\/terms\/i\/industrial-goods-sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">industrials<\/a>, energy, and <a href=\"https:\/\/www.investopedia.com\/terms\/b\/basic_materials.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">materials<\/a> have been the strongest sectors in recent months. These are the types of stocks and companies most prevalent in emerging markets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-dr-copper-diverges\">3\/ <strong>Dr. Copper Diverges<\/strong><\/h2>\n\n\n\n<p>As global markets fall under increased selling pressure, a key economic <a href=\"https:\/\/www.investopedia.com\/terms\/b\/bellwether.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">bellwether<\/a>\u2014copper\u2014has <a href=\"https:\/\/www.investopedia.com\/terms\/d\/divergence.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">diverged<\/a>. Instead of making fresh lows along with the <a href=\"https:\/\/www.investopedia.com\/terms\/g\/globaldow.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">Global Dow<\/a>, copper put in a higher low as it <a href=\"https:\/\/www.investopedia.com\/terms\/c\/coiledmarket.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">coils<\/a> above its prior-cycle highs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"561\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3-1100x561.png\" alt=\"\" class=\"wp-image-164332 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3-1100x561.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3-700x357.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3-300x153.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3-768x392.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3-1536x783.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/3.png 1920w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><figcaption><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>This is a noteworthy development, given copper\u2019s tight <a href=\"https:\/\/www.investopedia.com\/terms\/c\/correlation.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">correlation<\/a> with global equities and its role as a <a href=\"https:\/\/www.investopedia.com\/terms\/l\/leadingindicator.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">leading indicator<\/a> for the global economy.<\/p>\n\n\n\n<p>If copper can find <a href=\"https:\/\/www.investopedia.com\/terms\/s\/support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">support<\/a> at its former 2018 highs and catch higher, this could bode well for international equities and <a href=\"https:\/\/www.investopedia.com\/terms\/r\/risk-asset.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">risk assets<\/a> in general. On the other hand, more pain could lie ahead for stocks and commodities if copper breaks down from its current <a href=\"https:\/\/www.investopedia.com\/terms\/c\/consolidation.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">consolidation<\/a>.<\/p>\n\n\n\n<p>Stock market bulls worldwide would want to see copper dig in and find a <a href=\"https:\/\/www.investopedia.com\/terms\/f\/floor.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">floor<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-sugar-craves-out-a-potential-top\">4\/ <strong>Sugar Craves Out a Potential Top<\/strong><\/h2>\n\n\n\n<p>The March 2023 sugar <a href=\"https:\/\/www.investopedia.com\/terms\/f\/futurescontract.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">futures contract<\/a> is forming a classic <a href=\"https:\/\/www.investopedia.com\/terms\/h\/head-shoulders.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">head and shoulders<\/a> topping pattern. It appears that last month&#8217;s <a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakdown.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">breakdown<\/a> was simply a false start.<\/p>\n\n\n\n<p>Earlier in the month, buyers pushed price back toward the high of the left shoulder, adding a degree of symmetry to the pattern.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"562\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4-1100x562.png\" alt=\"\" class=\"wp-image-164338 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4-1100x562.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4-700x358.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4-300x153.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4-768x392.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4-1536x785.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2022\/11\/4.png 1877w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/562;\" \/><figcaption><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>It\u2019s constructive to see a topping pattern have balance, suggesting strong hands continue to distribute their shares, or in this case, contracts.<\/p>\n\n\n\n<p>Also, it\u2019s best to see an abbreviated right shoulder when it comes to these formations, as the shorter the <a href=\"https:\/\/www.investopedia.com\/terms\/d\/duration.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=865039-20221031&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=103122&amp;cid=865039&amp;mid=100865510619\" target=\"_blank\" rel=\"noreferrer noopener\">duration<\/a>, the stronger the selling pressure.<\/p>\n\n\n\n<p>The last thing sugar bears would want to see is price action chopping around the neckline, failing to break down.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 31st October, 2022<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When we look beneath the surface for signs of market health, we notice a slight improvement in internals.<\/p>\n","protected":false},"author":186,"featured_media":164330,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,14,17,18,6,8,9,22,23,26,3],"tags":[207],"contributors-categories":[13686],"class_list":{"0":"post-164328","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-commodities","8":"category-etfs","9":"category-futures","10":"category-macro","11":"category-north-america","12":"category-region","13":"category-securities","14":"category-stocks","15":"category-technical-analysis","16":"category-text-articles","17":"category-traders-insight","18":"tag-spx","19":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - 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