{"id":187394,"date":"2023-03-27T10:20:53","date_gmt":"2023-03-27T14:20:53","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=187394"},"modified":"2024-01-24T12:14:11","modified_gmt":"2024-01-24T17:14:11","slug":"chart-advisor-a-tale-of-two-markets","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-a-tale-of-two-markets\/","title":{"rendered":"Chart Advisor: A Tale of Two Markets"},"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<h2 class=\"wp-block-heading\" id=\"h-friday-24th-march-2023\">Friday, 24th March, 2023<\/h2>\n\n\n\n<p><strong>1\/ Tech Up, Banks Down<\/strong><\/p>\n\n\n\n<p><strong>2\/ Big Banks Break Down<\/strong><\/p>\n\n\n\n<p><strong>3\/ New Lows for Small Stocks<\/strong><\/p>\n\n\n\n<p><strong>4\/ Yields Drag Commodity Indexes Down<\/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-tech-up-banks-down\">1\/ <strong>Tech Up, Banks Down<\/strong><\/h2>\n\n\n\n<p>2023 has&nbsp;been a tale of two markets so far as&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/g\/growthstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">growth stocks<\/a>&nbsp;have gained while&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/f\/financial_sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">financials<\/a>&nbsp;and other&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/cyclicalstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">cyclical stocks<\/a>&nbsp;falter.<\/p>\n\n\n\n<p>Considering the growing performance gap between the best and worst-performing sectors, we could expect some&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/m\/meanreversion.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">mean reversion<\/a>&nbsp;in the near future. The chart below shows the year-to-date performance of the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/l\/large-cap.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">large-cap<\/a>&nbsp;technology sector SPDR (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLK&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>) and the SPDR Bank ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=KBE&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">KBE<\/a>):<\/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\/1-19-1100x568.png\" alt=\"\" class=\"wp-image-187399 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/568;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Koyfin<\/strong><\/figcaption><\/figure>\n\n\n\n<p>As you can see in the chart above, the dispersion in returns between these respective leaders and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/l\/laggard.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">laggards<\/a>&nbsp;is approaching 40 percentage points. This is a massive divergence considering less than three months of price action.<\/p>\n\n\n\n<p>Tech and growth stocks are unlikely to keep rising indefinitely in an environment where financials are collapsing. Financials are as important of a sector to the broader market as any other, and bulls want to see these stocks participate. If they don\u2019t soon, the odds of tech stocks reversing lower may only increase.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-big-banks-break-down\">2\/ <strong>Big Banks Break Down<\/strong><\/h2>\n\n\n\n<p>More banks are getting hit by selling pressure as the days go by.<\/p>\n\n\n\n<p>Not only are regional banks collapsing, but&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/m\/money-center-banks.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">money center banks<\/a>&nbsp;are also breaking down to multi-year lows following the completion of massive tops.<\/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\/2-20-1100x546.png\" alt=\"\" class=\"wp-image-187400 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>Shares of Wells Fargo (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=WFC\" target=\"_blank\" rel=\"noreferrer noopener\">W<\/a><a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=WFC&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">FC<\/a>) and Bank of America (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=BAC&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">BAC<\/a>), two of the largest and most important banks in the U.S., are hitting new multi-year lows.<\/p>\n\n\n\n<p>As long as these stocks remain under pressure, so could the broader financial sector.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-new-lows-for-small-stocks\">3\/ <strong>New Lows for Small Stocks<\/strong><\/h2>\n\n\n\n<p>Large-cap stocks have shown impressive relative strength in the last few weeks as technology and growth stocks reassert their old leadership.<\/p>\n\n\n\n<p>The chart below shows the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/russell2000.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">Russell&nbsp;<\/a><a href=\"https:\/\/www.investopedia.com\/terms\/r\/russell2000.asp\" target=\"_blank\" rel=\"noreferrer noopener\">2000<\/a>&nbsp;ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=IWM&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">IWM<\/a>) on the verge of breaking down relative to the S&amp;P 500 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=SPY&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">SPY<\/a>):<\/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\/3-22-1100x546.png\" alt=\"\" class=\"wp-image-187403 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>As you can see, prices are pressing against a critical&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/z\/zone-of-support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">support level<\/a>&nbsp;at the shelf of former lows from 2022.<\/p>\n\n\n\n<p>If we see a decisive break in this relationship, we could expect further outperformance from large caps. However, if small caps are to catch a relative bid, it could occur at this level.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-yields-drag-commodity-indexes-down\">4\/ <strong>Yields Drag Commodity Indexes Down<\/strong><\/h2>\n\n\n\n<p>Yields are no longer rising, and it\u2019s taking a toll on commodities.<\/p>\n\n\n\n<p>Below is a triple-pane chart of the Bloomberg&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/commodityindices.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">Commodity Index<\/a>&nbsp;(BCOM), the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/crb.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">CRB Index<\/a>, and our&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/e\/equalweight.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">equal-weight<\/a>&nbsp;index comprised of 33 individual contracts:<\/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\/4-21-1100x561.png\" alt=\"\" class=\"wp-image-187404 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The EW 33 remains resilient despite the BCOM and energy-heavy CRB Index recently posting fresh 52-week lows. Its buoyancy speaks to lingering strength in various contracts such as orange juice, cocoa, sugar, live cattle,&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/p\/preciousmetal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">precious metals<\/a>, copper, and steel.<\/p>\n\n\n\n<p>But the environment could be changing as yields begin to turn lower.<\/p>\n\n\n\n<p>As long as that remains true,&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/p\/procyclical.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8678031-20230324&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=032423\" target=\"_blank\" rel=\"noreferrer noopener\">pro-cyclical<\/a>&nbsp;commodities such as energy and industrial metals could struggle, while precious metals\u2014especially gold and silver\u2014could benefit.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 24th March, 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>2023 has been a tale of two markets so far as growth stocks have gained while financials and other cyclical stocks falter.<\/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":[21,14,18,6,8,9,22,23,26,3],"tags":[1091,1368,208,1782,262,1771,1302],"contributors-categories":[13686],"class_list":{"0":"post-187394","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-etfs","8":"category-macro","9":"category-north-america","10":"category-region","11":"category-securities","12":"category-stocks","13":"category-technical-analysis","14":"category-text-articles","15":"category-traders-insight","16":"tag-bac","17":"tag-bcom","18":"tag-iwm","19":"tag-kbe","20":"tag-spy","21":"tag-wfc","22":"tag-xlk","23":"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 v27.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: A Tale of Two Markets | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"2023 has been a tale of two markets so far as growth stocks have gained while financials and other cyclical stocks falter.\" \/>\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\/187394\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: A Tale of Two Markets | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"2023 has been a tale of two markets so far as growth stocks have gained while financials and other cyclical stocks falter.\" \/>\n<meta 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