{"id":190502,"date":"2023-05-17T11:52:53","date_gmt":"2023-05-17T15:52:53","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=190502"},"modified":"2024-01-24T12:13:42","modified_gmt":"2024-01-24T17:13:42","slug":"chart-advisor-tech-stocks-take-the-lead","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-tech-stocks-take-the-lead\/","title":{"rendered":"Chart Advisor: Tech Stocks Take the Lead"},"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-16th-may-2023\">Tuesday, 16th may, 2023<\/h2>\n\n\n\n<p><strong>1\/ Tech Stocks Take the Lead<\/strong><\/p>\n\n\n\n<p><strong>2\/ Retail Wreck<\/strong><\/p>\n\n\n\n<p><strong>3\/ Commodity Bulls Fall Out of the Rotation<\/strong><\/p>\n\n\n\n<p><strong>4\/ Copper Rolls Over<\/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-stocks-take-the-lead\">1\/ <strong>Tech Stocks Take the Lead<\/strong><\/h2>\n\n\n\n<p>Technology has been a clear area of leadership over the past six months. Not only are <a href=\"https:\/\/www.investopedia.com\/terms\/t\/technology_sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">tech stocks<\/a> pushing against new highs in absolute terms, but the relative trends are reaching new heights as well. <\/p>\n\n\n\n<p>Here&#8217;s the Large Cap Technology Sector SPDR (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlk&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>) breaking out of a 15-month base relative to the S&amp;P 500 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" 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\/05\/1-12-1100x546.png\" alt=\"\" class=\"wp-image-190503 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>After a prolonged period of sideways action, the XLK\/SPY ratio is taking out its 2021 highs as it looks poised to resolve from its current range. The last time technology was trading at these levels versus the S&amp;P was during the <a href=\"https:\/\/www.investopedia.com\/terms\/d\/dotcom-bubble.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">dotcom bubble<\/a> in 2000. <\/p>\n\n\n\n<p>If this <a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakout.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">breakout<\/a> is a valid one, we could see further outperformance from tech and growth stocks in the coming weeks and months.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-retail-wreck\">2\/ <strong>Retail Wreck<\/strong><\/h2>\n\n\n\n<p>The opposite is true when discussing <a href=\"https:\/\/www.investopedia.com\/articles\/stocks\/07\/retail_stocks.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">retail stocks<\/a>, as they have lost steam and leadership in the past two years.<\/p>\n\n\n\n<p> Here&#8217;s a chart of the S&amp;P Retail ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xrt&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">XRT<\/a>) versus the S&amp;P 500 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">SPY<\/a>) breaking down to new 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\/05\/2-12-1100x546.png\" alt=\"\" class=\"wp-image-190504 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>Earlier this month, the XRT\/SPY ratio broke down from a <a href=\"https:\/\/www.investopedia.com\/terms\/c\/consolidation.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">consolidation<\/a> to its lowest level since July 2020. <\/p>\n\n\n\n<p>As long as this ratio is below its lows from last year, retail equities will likely remain a <a href=\"https:\/\/www.investopedia.com\/terms\/l\/laggard.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">laggard<\/a> group.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-commodity-bulls-fall-out-of-the-rotation\">3\/ <strong>Commodity Bulls Fall Out of the Rotation<\/strong><\/h2>\n\n\n\n<p>Rotation is the lifeblood of any bull market, regardless of the <a href=\"https:\/\/www.investopedia.com\/terms\/a\/assetclasses.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">asset class<\/a>.<\/p>\n\n\n\n<p>That\u2019s why we were focused on a potential bearish-to-bullish reversal in <a href=\"https:\/\/www.investopedia.com\/terms\/b\/base-metals.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">base<\/a> and industrial metals as energy contracts fell under increased selling pressure. With crude and gasoline trending lower, we were looking to see whether bulls would support a bid in other procyclical areas of the <a href=\"https:\/\/www.investopedia.com\/terms\/c\/commodity.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">commodity<\/a> space. <\/p>\n\n\n\n<p>Fast forward a few months, and our base and industrial metals index is breaking down to fresh five-month 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\/05\/3-12-1100x551.png\" alt=\"\" class=\"wp-image-190505 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/551;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Sellers are taking control of these markets. This does not bode well for the overall commodity space, as well as global risk assets. <\/p>\n\n\n\n<p>If Doctor Copper and other industrial metals continue to move lower, global risk assets will likely experience renewed downside pressure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-copper-rolls-over\">4\/ <strong>Copper Rolls Over<\/strong><\/h2>\n\n\n\n<p>Why do investors and analysts closely monitor copper futures, referring to the commodity as <a href=\"https:\/\/www.investopedia.com\/terms\/d\/doctor-copper.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">Doctor Copper<\/a>? <\/p>\n\n\n\n<p>Check out the overlay chart of copper futures and the Global Dow ETF (<a href=\"https:\/\/www.spglobal.com\/spdji\/en\/indices\/equity\/the-global-dow\/?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623#overview\" target=\"_blank\" rel=\"noreferrer noopener\">GDOW<\/a>)\u2014an ETF of 100 diverse international <a href=\"https:\/\/www.investopedia.com\/terms\/b\/bluechip.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">blue-chip<\/a> stocks:<\/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\/4-12-1100x561.png\" alt=\"\" class=\"wp-image-190507 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>Copper futures and global risk assets mirror each other over longer time frames. This is largely attributed to the strong relationship between copper\u2019s <a href=\"https:\/\/www.investopedia.com\/articles\/economics\/11\/intro-supply-demand.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9154012-20230516&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=051623\" target=\"_blank\" rel=\"noreferrer noopener\">supply and demand<\/a> dynamics and global economic growth.<\/p>\n\n\n\n<p> Regardless, the base metal has an incredible read on the global economy. And its recent breakdown suggests more downside risk in the coming weeks and months.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 16th May 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Technology has been a clear area of leadership over the past six months. Not only are tech stocks pushing against new highs in absolute terms, but the relative trends are reaching new heights as well. <\/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":[14474,262,1302,1494],"contributors-categories":[13686],"class_list":{"0":"post-190502","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-gdow","18":"tag-spy","19":"tag-xlk","20":"tag-xrt","21":"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 v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Tech Stocks Take the Lead | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Technology has been a clear area of leadership over the past six months. 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