{"id":188610,"date":"2023-04-17T09:06:55","date_gmt":"2023-04-17T13:06:55","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=188610"},"modified":"2024-01-24T12:14:01","modified_gmt":"2024-01-24T17:14:01","slug":"chart-advisor-financials-fight-back","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-financials-fight-back\/","title":{"rendered":"Chart Advisor: Financials Fight Back"},"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-14th-april-2023\">Friday, 14th April, 2023<\/h2>\n\n\n\n<p><strong>1\/ Financials Fight Back<\/strong><\/p>\n\n\n\n<p><strong>2\/ DM Over EM<\/strong><\/p>\n\n\n\n<p><strong>3\/ Copper Catches Rotation<\/strong><\/p>\n\n\n\n<p><strong>4\/ New Highs for Jeera<\/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-financials-fight-back\">1\/ <strong>Financials Fight Back<\/strong><\/h2>\n\n\n\n<p>The large-cap <a href=\"https:\/\/www.investopedia.com\/terms\/f\/financial_sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">financial sector<\/a> SPDR (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLF&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\\\" target=\"_blank\" rel=\"noreferrer noopener\">XLF<\/a>) led all sectors this week, capping off with a 1% gain today on the heels of big <a href=\"https:\/\/www.investopedia.com\/jpmorgan-chase-posts-record-revenue-7480974?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">earnings beats<\/a> from JPMorgan Chase (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=JPM&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">JPM<\/a>) and Citigroup (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=C&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">C<\/a>). <\/p>\n\n\n\n<p>The 30.50 level in XLF not only corresponds with recent pivot lows, but also the prior-cycle highs from 2020, 2018, and 2007. As you can see in the top pane of the chart, buyers stepped in and defended this critical polarity zone again over the past few weeks:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/1-10-1100x546.png\" alt=\"\" class=\"wp-image-188612 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>When it comes to the internal health of the financial sector, banks remain a concern. This is particularly true for the regional banks, which just registered their lowest weekly close since November of 2020. <\/p>\n\n\n\n<p>The chart above does an excellent job of illustrating the <a href=\"https:\/\/www.investopedia.com\/terms\/d\/divergence.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">divergence<\/a> between these banks and the financial sector as a whole. While the latter is still holding constructively above its 2022 lows, the S&amp;P Regional Bank Index (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=KRE&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">KRE<\/a>) violated this level last month and has been coiling in a bearish <a href=\"https:\/\/www.investopedia.com\/terms\/c\/continuationpattern.asp\" target=\"_blank\" rel=\"noreferrer noopener\">a<\/a><a href=\"https:\/\/www.investopedia.com\/terms\/c\/continuationpattern.asp\" target=\"_blank\" rel=\"noreferrer noopener\">ttern<\/a> since. With earnings now underway, we could expect this coil to resolve higher or lower soon. If it heads lower, XLF could follow suit.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-dm-over-em\">2\/ <strong>DM Over EM<\/strong><\/h2>\n\n\n\n<p>Excluding the U.S., developed market equities (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=VEA&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">VEA<\/a>) have been trading in a well-defined range relative to <a href=\"https:\/\/www.investopedia.com\/terms\/e\/emergingmarketeconomy.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">emerging markets<\/a> (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=EEM&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">EEM<\/a>) over the past seven years. Since 2021 however, developed market stocks have heavily outperformed their emerging market counterparts.<\/p>\n\n\n\n<p>The chart below shows this relationship carving out a massive 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\/04\/2-10-1100x546.png\" alt=\"\" class=\"wp-image-188614 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, price is pressing against the upper bounds of its range, threatening to break out. Where it goes from here could determine which one of these groups leads in the future. <\/p>\n\n\n\n<p>If the ratio resolves higher and makes a decisive upside resolution, a sustained period of leadership from developed markets could be underway. At the same time, there is no better place for emerging market stocks to catch a relative <a href=\"https:\/\/www.investopedia.com\/terms\/b\/bid.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">bid<\/a> and reassert their old leadership than at current levels.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-copper-catches-rotation\">3\/ <strong>Copper Catches Rotation<\/strong><\/h2>\n\n\n\n<p>Outside of financials, other <a href=\"https:\/\/www.investopedia.com\/terms\/c\/cyclicalstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">cyclical<\/a> groups like energy and <a href=\"https:\/\/www.investopedia.com\/terms\/b\/basic_materials.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">materials<\/a> enjoyed broad-based rallies this week. Copper miners were among the strongest industry groups from these sectors. <\/p>\n\n\n\n<p>Here is a weekly chart of Southern Copper Co. (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=SCCO&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">SCCO<\/a>), one of the largest copper miners in the U.S. and one of the biggest components of the Global X Copper Miners ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=COPX&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">COPX<\/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\/04\/3-11-1100x537.png\" alt=\"\" class=\"wp-image-188615 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>As one of the industry leaders, SCCO rallied 7.8% this week to close at all-time weekly closing highs. When specific sectors or groups catch <a href=\"https:\/\/www.investopedia.com\/articles\/trading\/05\/020305.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">rotation<\/a>, the strongest stocks tend to make new highs first. We could expect to see participation broaden, with more stocks in the materials sector making new highs in the coming weeks. <\/p>\n\n\n\n<p>As for SCCO, as long as price makes a decisive move above the former highs at the 161.8% <a href=\"https:\/\/www.investopedia.com\/terms\/f\/fibonacciextensions.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">Fibonacci extension<\/a>, the path of least resistance could be higher. We\u2019re on the lookout for strong follow-through next week as confirmation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-new-highs-for-jeera\">4\/ <strong>New Highs for Jeera<\/strong><\/h2>\n\n\n\n<p>Yesterday, we highlighted sugar futures as a pocket of strength within the commodity space, which can easily be overlooked by solely monitoring the big three: crude oil, copper, and gold. <\/p>\n\n\n\n<p>Jeera (cumin seed) futures are experiencing an even more explosive rally:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/4-10-1100x561.png\" alt=\"\" class=\"wp-image-188617 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>It\u2019s another massive rally that looks similar to a chart of sugar futures. Both carved out big multi-year bases, completing bearish-to-bullish <a href=\"https:\/\/www.investopedia.com\/terms\/r\/reversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">reversals<\/a> in price and <a href=\"https:\/\/www.investopedia.com\/terms\/m\/marketmomentum.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8870676-20230414&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=041423\" target=\"_blank\" rel=\"noreferrer noopener\">momentum<\/a>.<\/p>\n\n\n\n<p>Though inflation may be easing, commodities continue to warn against conflating \u201ceasing\u201d with absent.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 14th April 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The large-cap financial sector SPDR (XLF) led all sectors this week, capping off with a 1% gain today on the heels of big earnings beats from JPMorgan Chase (JPM) and Citigroup (C). <\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,14,17,18,6,8,9,22,23,26,3],"tags":[11784,2148,399,2175,15125,15124,2632,2006],"contributors-categories":[13686],"class_list":{"0":"post-188610","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-etfs","8":"category-futures","9":"category-macro","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-stocks","14":"category-technical-analysis","15":"category-text-articles","16":"category-traders-insight","17":"tag-copx","18":"tag-eem","19":"tag-jpm","20":"tag-kre","21":"tag-s_f","22":"tag-scco","23":"tag-vea","24":"tag-xlf","25":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- 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