{"id":189394,"date":"2023-04-26T11:09:46","date_gmt":"2023-04-26T15:09:46","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=189394"},"modified":"2024-01-24T12:13:54","modified_gmt":"2024-01-24T17:13:54","slug":"chart-advisor-playing-defense","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-playing-defense\/","title":{"rendered":"Chart Advisor: Playing Defense"},"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-tuesday-25th-april-2023\">Tuesday, 25th April, 2023<\/h2>\n\n\n\n<p><strong>1\/ Playing Defense<\/strong><\/p>\n\n\n\n<p><strong>2\/ First Republic Falls to a Record Low<\/strong><\/p>\n\n\n\n<p><strong>3\/ NOK\/SEK Hints at Cheaper Oil<\/strong><\/p>\n\n\n\n<p><strong>4\/ Heating Oil Posts Fresh 52-Week Lows<\/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-playing-defense\">1\/ <strong>Playing Defense<\/strong><\/h2>\n\n\n\n<p>Stocks finished solidly in the red today, but not all areas of the market took a direct hit. <a href=\"https:\/\/www.investopedia.com\/terms\/u\/utilities_sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">Utilities<\/a>, <a href=\"https:\/\/www.investopedia.com\/terms\/c\/consumerstaples.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">consumer staples<\/a>, and real estate withstood today\u2019s selling pressure while the rest of the market struggled. <\/p>\n\n\n\n<p><a href=\"https:\/\/www.investopedia.com\/terms\/d\/defensivestock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">Defensive sectors<\/a> of the stock market are turning the corner and catching higher. Here is our <a href=\"https:\/\/www.investopedia.com\/terms\/e\/equalweight.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">equal-weight<\/a> index of the utilities (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLU&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">XLU<\/a>), consumer staples (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLP&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">XLP<\/a>), and real estate (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLRE&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">XLRE<\/a>) ETFs:<\/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\/1-18-1100x561.png\" alt=\"\" class=\"wp-image-189400 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 chart looks constructive. Our index is carving out a multi-month base, and it\u2019s violating a <a href=\"https:\/\/www.investopedia.com\/terms\/d\/downtrend.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">downtrend<\/a> line.&nbsp;While the trendline violation isn\u2019t necessarily a trade signal, it could imply that a potential trend <a href=\"https:\/\/www.investopedia.com\/terms\/r\/reversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">reversal<\/a> is underway. <\/p>\n\n\n\n<p>To be clear, these stocks have a lot of work to do before the structural bias can turn higher. Nevertheless, defensive sectors are proving their value.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-first-republic-falls-to-a-record-low\">2\/ <strong>First Republic Falls to a Record Low<\/strong><\/h2>\n\n\n\n<p>After First Republic Bank (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=FRC&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">FRC<\/a>) said it <a href=\"https:\/\/www.investopedia.com\/first-republic-deposits-plunge-q1-fy2023-7484537?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">lost over $100 billion in deposits<\/a>, analysts and <a href=\"https:\/\/www.investopedia.com\/articles\/bonds\/09\/history-credit-rating-agencies.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">ratings agencies<\/a> overwhelmed the stock with negative reports. Shares lost half their value today, plunging to new all-time lows:<\/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\/2-18-1100x561.png\" alt=\"\" class=\"wp-image-189401 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>After completing a long-term distribution pattern in March, the stock plummeted almost 90% and began coiling in a bearish <a href=\"https:\/\/www.investopedia.com\/terms\/c\/continuationpattern.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">continuation pattern<\/a>. Today, that pattern resolved lower in decisive fashion. <\/p>\n\n\n\n<p>There is no <a href=\"https:\/\/www.investopedia.com\/terms\/f\/floor.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">floor<\/a> for FRC at the moment. If more banks follow the path of First Republic this earnings season, we could expect the broader financial sector to follow suit to the downside. The results have been mixed so far.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-nok-sek-hints-at-cheaper-oil\">3\/ <strong>NOK\/SEK Hints at Cheaper Oil<\/strong><\/h2>\n\n\n\n<p>The U.S. dollar and yields are churning above key levels, crude oil remains resilient despite increased selling pressure, and the S&amp;P 500 is challenging the upper bounds of a multi-month <a href=\"https:\/\/www.investopedia.com\/terms\/t\/tradingrange.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">trading range<\/a>.<\/p>\n\n\n\n<p>But not all markets are trapped within a trading range at the moment. In fact, there\u2019s one <a href=\"https:\/\/www.investopedia.com\/articles\/forex\/11\/why-trade-forex.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">forex (FX)<\/a> currency cross breaking down, suggesting lower yields and cheaper oil could be on the horizon. <\/p>\n\n\n\n<p>Here is a ratio chart of the <a href=\"https:\/\/www.investopedia.com\/terms\/n\/nok.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">Norwegian krone (NOK)<\/a> and <a href=\"https:\/\/www.investopedia.com\/terms\/s\/sek-swedish-krona.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">Swedish krona (SEK)<\/a> charted alongside crude oil futures and the U.S. 10-year Treasury yield:<\/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\/3-19-1100x550.png\" alt=\"\" class=\"wp-image-189402 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>The three charts appear similar, with the exception of recent <a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakdown.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">breakdowns<\/a> in crude oil and the NOK\/SEK ratio.<\/p>\n\n\n\n<p>The strong relationships between these markets are rooted in the Norwegian economy\u2019s reliance on crude oil exports. So as NOK\/SEK breaks to fresh 52-week lows, selling pressure could be in store for crude oil. <\/p>\n\n\n\n<p>We still want to give crude oil and energy stocks the benefit of the doubt as long as they hold above key <a href=\"https:\/\/www.investopedia.com\/terms\/s\/support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">support levels<\/a>, but&nbsp;we can\u2019t deny the bearish implications outlined by the intermarket landscape.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-heating-oil-posts-fresh-52-week-lows\">4\/ <strong>Heating Oil Posts Fresh 52-Week Lows<\/strong><\/h2>\n\n\n\n<p>As evidence mounts suggesting a breakdown in black gold, crude oil isn\u2019t receiving much help from its distillates.<\/p>\n\n\n\n<p>Heating oil continues to fall, while gasoline futures are hugging a downward-sloping 200-day <a href=\"https:\/\/www.investopedia.com\/terms\/m\/movingaverage.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8967148-20230425&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=042523\" target=\"_blank\" rel=\"noreferrer noopener\">moving average (MA)<\/a>. <\/p>\n\n\n\n<p>Below is a chart of heating oil futures as they print fresh 52-week lows:<\/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\/4-18-1100x561.png\" alt=\"\" class=\"wp-image-189403 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 hard to picture crude oil finding support and catching higher while demand dwindles for refined products. This is more evidence suggesting more near-term weakness could be in store for oil and the energy sector. <\/p>\n\n\n\n<p>Crude oil and energy stocks remain resilient, but if the underlying demand for heating oil and gasoline dries up, it could be only a matter of time before the rest of the energy space feels the effects in the form of new lows.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 25th April 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stocks finished solidly in the red today, but not all areas of the market took a direct hit. Utilities, consumer staples, and real estate withstood today\u2019s selling pressure while the rest of the market struggled.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,21,14,15,16,17,18,6,8,9,22,23,26,3],"tags":[15170,238,2239,4216,1322,3855,1323],"contributors-categories":[13686],"class_list":{"0":"post-189394","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-asia","7":"category-commodities","8":"category-etfs","9":"category-fixed-income","10":"category-forex","11":"category-futures","12":"category-macro","13":"category-north-america","14":"category-region","15":"category-securities","16":"category-stocks","17":"category-technical-analysis","18":"category-text-articles","19":"category-traders-insight","20":"tag-frc","21":"tag-fx","22":"tag-nok","23":"tag-sek","24":"tag-xlp","25":"tag-xlre","26":"tag-xlu","27":"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) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Playing Defense | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Stocks finished solidly in the red today, but not all areas of the market took a direct hit. 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