{"id":190237,"date":"2023-05-11T15:27:14","date_gmt":"2023-05-11T19:27:14","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=190237"},"modified":"2024-01-24T12:13:45","modified_gmt":"2024-01-24T17:13:45","slug":"chart-advisor-banks-vs-big-tech","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-banks-vs-big-tech\/","title":{"rendered":"Chart Advisor: Banks vs. Big Tech"},"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-wednesday-10th-may-2023\">Wednesday, 10th May, 2023<\/h2>\n\n\n\n<p><strong>1\/ Banks vs. Big Tech<\/strong><\/p>\n\n\n\n<p><strong>2\/ Mixed Signals From Healthcare<\/strong><\/p>\n\n\n\n<p><strong>3\/ Teetering Tops<\/strong><\/p>\n\n\n\n<p><strong>4\/ A Relative Breakout for Precious Metals<\/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-banks-vs-big-tech\">1\/ <strong>Banks vs. Big Tech<\/strong><\/h2>\n\n\n\n<p>The Technology Sector SPDR (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlk&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>) made new 52-week highs, and the Nasdaq 100 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=qqq&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">QQQ<\/a>) hit its highest level since August today. Betting against the uptrend in big tech has caused losses for bears in recent months.<\/p>\n\n\n\n<p>There is a growing list of bullish developments for the overall market, as participation is expanding beyond technology to more and more&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/risk-on-risk-off.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">risk-on<\/a>&nbsp;industry groups. While this is true, we are still paying close attention to the banks, as the drastic divergence in performance between these&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/l\/laggard.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">laggards<\/a>&nbsp;and the rest of the market may not prove to be sustainable.<\/p>\n\n\n\n<p>The performance chart below tells this story well, as the Nasdaq 100 is up over 10% since March despite the Regional Banking ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=kre&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">KRE<\/a>) falling by almost 40% over the same time.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/1-8-1100x546.png\" alt=\"\" class=\"wp-image-190238 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 gap in performance between these two major indexes is almost 50% in just a little over two months. Since we do not want to assume that these two groups will move in opposite directions over the long run, the question becomes &#8220;who is right here?&#8221;<\/p>\n\n\n\n<p>If the Nasdaq turns out to be right, we should see a major catch-up move from banks soon. However, if banks are telling the right story, the Nasdaq and broader market should come under pressure and move in line with KRE.<\/p>\n\n\n\n<p>For now, there is no evidence that either is about to happen any time soon, as banks are trading around multi-year lows while tech and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/g\/growthstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">growth stocks<\/a>&nbsp;keep pressing to fresh highs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-mixed-signals-from-healthcare\">2\/ <strong>Mixed Signals From Healthcare<\/strong><\/h2>\n\n\n\n<p>In sideways markets, there are groups that suggest they could be positioned for gains as well as others that indicate risk to the downside.<\/p>\n\n\n\n<p>An excellent example of this is the comparison between the iShares US Medical Devices ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=ihi&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">IHI<\/a>) and the iShares US Healthcare Providers ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=ihf&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">IHF<\/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\/05\/2-8-1100x546.png\" alt=\"\" class=\"wp-image-190239 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, IHI has built a constructive&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/basing.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">base<\/a>&nbsp;for almost a year. Currently, price is resolving to the upside to new multi-months highs. This chart pattern looks quite similar to a lot of the bases we\u2019re seeing in growth indexes these days.<\/p>\n\n\n\n<p>On the flip side, IHF has been simultaneously carving out a&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/t\/atop.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">topping formation<\/a>. Although it has not broken down yet, it looks more like a distributive pattern than accumulation.<\/p>\n\n\n\n<p>We always maintain a more positive view on leadership groups compared with laggards.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-teetering-tops\">3\/ <strong>Teetering Tops<\/strong><\/h2>\n\n\n\n<p>Evaluating relative trends is a valuable process that helps us anticipate what the price of an asset is likely to do on absolute terms.<\/p>\n\n\n\n<p>When we analyze the major oil and gas operator Occidental Petroleum (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=oxy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">OXY<\/a>), we see price carving out topping formations relative to the S&amp;P 500 (upper pane) and the energy sector (lower pane):<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-9-1100x546.png\" alt=\"\" class=\"wp-image-190241 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>If these topping patterns finally resolve lower, it would support a downside resolution on absolute terms. This would be a&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/bear.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">bearish<\/a>&nbsp;development for OXY and energy stocks in general.<\/p>\n\n\n\n<p>The absolute price chart for OXY looks quite similar to the distribution patterns in the ratios above. It is possible that all three could resolve in the same direction around the same time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-a-relative-breakout-for-precious-metals\">4\/ <strong>A Relative Breakout for Precious Metals<\/strong><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.investopedia.com\/articles\/optioninvestor\/06\/goldsilverfutures.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">Gold futures<\/a>&nbsp;haven\u2019t broken out yet. But that hasn\u2019t stopped the precious metal from shining.<\/p>\n\n\n\n<p>It came within five dollars of new all-time highs last week. Meanwhile, gold mining stocks (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=gdx&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">GDX<\/a>) are outperforming the S&amp;P 500 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">SPY<\/a>). And our precious metals index is breaking out of a bearish-to-bullish&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/reversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">reversal<\/a>&nbsp;versus our broad equal-weight commodity index.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/4-9-1100x561.png\" alt=\"\" class=\"wp-image-190243 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><a href=\"https:\/\/www.investopedia.com\/terms\/r\/relativestrength.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9101674-20230510&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051023\" target=\"_blank\" rel=\"noreferrer noopener\">Relative strength<\/a>&nbsp;accompanies the strongest trends and sometimes leads major upside resolutions.<\/p>\n\n\n\n<p>If precious metals and their related stocks continue to outperform their alternatives, it could simply be a matter of time before gold futures post a new all-time high and resolve from this multi-year range.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 10th May 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Technology Sector SPDR (XLK) made new 52-week highs, and the Nasdaq 100 (QQQ) hit its highest level since August today. Betting against the uptrend in big tech has caused losses for bears in recent months.<\/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":[21,14,17,18,6,8,9,22,23,26,3],"tags":[2172,15284,11258,2175,3797,2782,262,1302],"contributors-categories":[13686],"class_list":{"0":"post-190237","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-gdx","18":"tag-ihf","19":"tag-ihi","20":"tag-kre","21":"tag-oxy","22":"tag-qqq","23":"tag-spy","24":"tag-xlk","25":"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: Banks vs. Big Tech | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"The Technology Sector SPDR (XLK) made new 52-week highs, and the Nasdaq 100 (QQQ) hit its highest level since August today. 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