{"id":186171,"date":"2023-03-06T14:23:20","date_gmt":"2023-03-06T19:23:20","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=186171"},"modified":"2024-01-24T12:14:21","modified_gmt":"2024-01-24T17:14:21","slug":"chart-advisor-strong-as-steel","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-strong-as-steel\/","title":{"rendered":"Chart Advisor: Strong as Steel"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-friday-3rd-march-2023\">Friday, 3rd March, 2023<\/h2>\n\n\n\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\/ Strong as Steel<\/strong><\/p>\n\n\n\n<p><strong>2\/ Greenback Against Gold<\/strong><\/p>\n\n\n\n<p><strong>3\/ Bonds Bounce at Support<\/strong><\/p>\n\n\n\n<p><strong>4\/ Will Wheat Futures Trap the Bears?<\/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-strong-as-steel\">1\/ <strong>Strong as Steel<\/strong><\/h2>\n\n\n\n<p>Steel stocks just closed out the week at their highest levels since 2011, providing another piece of evidence that commodity stocks are taking on a leadership role.<\/p>\n\n\n\n<p>Here is a weekly <a href=\"https:\/\/www.investopedia.com\/terms\/c\/candlestick.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">candlestick chart<\/a> of the VanEck Steel ETF (<a href=\"https:\/\/www.investopedia.com\/terms\/c\/candlestick.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">SLX<\/a>) breaking out of a two-year base on top of a decade-long base:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/03\/1-4-1100x537.png\" alt=\"\" class=\"wp-image-186208 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/537;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>If this <a href=\"https:\/\/www.investopedia.com\/terms\/c\/cupandhandle.asp\" target=\"_blank\" rel=\"noreferrer noopener\">c<\/a><a href=\"https:\/\/www.investopedia.com\/terms\/c\/cupandhandle.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">up and handle pattern<\/a> makes a valid upside resolution and takes out the 2021 and 2022 highs, the bias could be higher for this group of <a href=\"https:\/\/www.investopedia.com\/terms\/c\/cyclicalstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">cyclical stocks<\/a>.<\/p>\n\n\n\n<p> The largest holdings in SLX include Vale (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=VALE&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">VALE<\/a>), Rio Tinto (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=RIO&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">RIO<\/a>), Nucor (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=NUE&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">NUE<\/a>), Ternium (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=TX&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">TX<\/a>), and Cleveland-Cliffs (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=CLF&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">CLF<\/a>). Steel industry stocks and other commodity subsectors such as copper and coal could outperform over the coming months.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-greenback-against-gold\">2\/ <strong>Greenback Against Gold<\/strong><\/h2>\n\n\n\n<p>The <a href=\"https:\/\/www.investopedia.com\/terms\/u\/usdx.asp\" target=\"_blank\" rel=\"noreferrer noopener\">U.S. Dollar Index (DXY)<\/a> is chipping away at supply at the 105 level. <\/p>\n\n\n\n<p>Whether DXY absorbs that supply and moves higher could have broad market implications, particularly for gold and other <a href=\"https:\/\/www.investopedia.com\/terms\/p\/preciousmetal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">precious me<\/a><a href=\"https:\/\/www.investopedia.com\/terms\/p\/preciousmetal.asp\" target=\"_blank\" rel=\"noreferrer noopener\">tals<\/a>. We\u2019ve paired an inverted DXY chart with the SPDR Gold ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=GLD&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">GLD<\/a>) below:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/03\/2-4-1100x537.png\" alt=\"\" class=\"wp-image-186209 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/537;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Notice how tightly these two lines track each other. The <a href=\"https:\/\/www.investopedia.com\/terms\/n\/negative-correlation.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">negative correlation<\/a> has been very strong since last year. This is highlighted in the lower pane by a 21-day correlation indicator.<\/p>\n\n\n\n<p>With a current reading greater than 95%, it illustrates just how big an impact DXY has on precious metals. That could remain the case over the coming months.<\/p>\n\n\n\n<p> While <a href=\"https:\/\/www.investopedia.com\/terms\/r\/risk-asset.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">risk assets<\/a> could struggle if DXY kicks off a fresh leg higher, precious metals could fare even worse.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-bonds-bounce-at-support\">3\/ <strong>Bonds Bounce at Support<\/strong><\/h2>\n\n\n\n<p>The 20+ Year Treasury Bond ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=TLT&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">TLT<\/a>) soared over 2% in today&#8217;s session, printing an <a href=\"https:\/\/www.investopedia.com\/terms\/i\/islandreversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">island reversal<\/a> pattern. <\/p>\n\n\n\n<p>This pattern is comprised of two <a href=\"https:\/\/www.investopedia.com\/terms\/g\/gapping.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">gaps<\/a> at roughly the same price and in both directions, leaving behind an &#8220;island.&#8221;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/03\/3-6-1100x546.png\" alt=\"\" class=\"wp-image-186210 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/546;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The logic behind this pattern is that the established trend is <a href=\"https:\/\/www.investopedia.com\/terms\/e\/exhaustion.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">exhausted<\/a> and likely to reverse course, with a price gap kicking off a new leg in the opposite direction.&nbsp;<\/p>\n\n\n\n<p> The inflection point for TLT is 99.60. Above that level, there may be potential for price to catch a strong <a href=\"https:\/\/www.investopedia.com\/terms\/b\/bid.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">bid<\/a> and reverse higher. However, if price falls and fills the gap, the pattern will become invalid, and the bias could be to the downside.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-will-wheat-futures-trap-the-bears\">4\/ <strong>Will Wheat Futures Trap the Bears?<\/strong><\/h2>\n\n\n\n<p>Last month, beaten-down tech names experienced <a href=\"https:\/\/www.investopedia.com\/terms\/s\/shortsqueeze.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">short squeezes<\/a> as short traders&nbsp;were forced to unwind their positions. <\/p>\n\n\n\n<p>We could witness similar action from wheat contracts this month. Below is a price chart of Minneapolis wheat contracts expiring in May:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/03\/4-4-1100x550.png\" alt=\"\" class=\"wp-image-186211 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/550;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Price broke down beneath a shelf of former lows last week against a backdrop of strengthening upside <a href=\"https:\/\/www.investopedia.com\/terms\/m\/marketmomentum.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">momentum<\/a>. Despite the bearish momentum regime, the 14-day <a href=\"https:\/\/www.investopedia.com\/terms\/r\/rsi.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">RSI<\/a> profile could support a healthy bottoming process.<\/p>\n\n\n\n<p> An explosive rally could ensue if last week\u2019s breakdown results in a <a href=\"https:\/\/www.investopedia.com\/terms\/h\/hookreversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">bull hook<\/a> or <a href=\"https:\/\/www.investopedia.com\/terms\/b\/beartrap.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8482780-20230303&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=030323\" target=\"_blank\" rel=\"noreferrer noopener\">bear trap<\/a>. Failed moves can prove to be the best trades.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 3rd March, 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Steel stocks just closed out the week at their highest levels since 2011, providing another piece of evidence that commodity stocks are taking on a leadership role.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,14,15,16,17,18,6,8,9,22,23,26,3],"tags":[14865,1779,2087,14866,7762,14863,11785,6609,14864,4965],"contributors-categories":[13686],"class_list":{"0":"post-186171","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-etfs","8":"category-fixed-income","9":"category-forex","10":"category-futures","11":"category-macro","12":"category-north-america","13":"category-region","14":"category-securities","15":"category-stocks","16":"category-technical-analysis","17":"category-text-articles","18":"category-traders-insight","19":"tag-clf","20":"tag-dxy","21":"tag-gld","22":"tag-mwe23k","23":"tag-nue","24":"tag-rio","25":"tag-slx","26":"tag-tlt","27":"tag-tx","28":"tag-vale","29":"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 v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Strong as Steel | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Steel stocks just closed out the week at their highest levels since 2011, providing another piece of evidence that commodity stocks are taking on a...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/186171\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: Strong as Steel | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"Steel stocks just closed out the week at their highest levels since 2011, providing another piece of evidence 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