{"id":190930,"date":"2023-05-24T17:05:25","date_gmt":"2023-05-24T21:05:25","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=190930"},"modified":"2024-01-24T12:13:37","modified_gmt":"2024-01-24T17:13:37","slug":"chart-advisor-tech-aims-for-the-skyy","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-tech-aims-for-the-skyy\/","title":{"rendered":"Chart Advisor: Tech Aims for the SKYY"},"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-23rd-may-2023\">Tuesday, 23rd May, 2023 <\/h2>\n\n\n\n<p><strong>1\/ Cloud Computing Could Head for the SKYY<\/strong><\/p>\n\n\n\n<p><strong>2\/ Defense Retreats<\/strong><\/p>\n\n\n\n<p><strong>3\/ International Opportunities<\/strong><\/p>\n\n\n\n<p><strong>4\/ Will Dollar and Rates Catch Higher With the USD\/JPY?<\/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-cloud-computing-could-head-for-the-skyy\">1\/ <strong>Cloud Computing Could Head for the SKYY<\/strong><\/h2>\n\n\n\n<p>Over the past few months, we have seen more tech-related groups build out&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/reversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">reversal patterns<\/a>&nbsp;and resolve higher.<\/p>\n\n\n\n<p>The Cloud Computing ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=skyy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">SKYY<\/a>) is carving out such a base. As you can see, price is pressing against its pivot highs from February as buyers work on absorbing the overhead supply at this&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/resistance.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">resistance zone<\/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\/1-17-1100x546.png\" alt=\"\" class=\"wp-image-190931 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>These accumulation phases typically lack oversold readings on the 14-period&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/rsi.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">relative strength index (RSI)<\/a>&nbsp;and flat to upward-sloping 200-day&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/m\/movingaverage.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">moving averages<\/a>.<\/p>\n\n\n\n<p>If and when we get a valid breakout above $70, SKYY could complete this base and kick off a new leg to the upside. Seeing momentum register an overbought reading would confirm the resolution when we get it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-defense-retreats\">2\/ <strong>Defense Retreats<\/strong><\/h2>\n\n\n\n<p>Starting in February,&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/consumerstaples.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">staples stocks<\/a>&nbsp;have been showing steady leadership relative to the overall market. Despite improvements from equities on absolute terms this year, this risk-off&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/relativestrength.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">relative strength<\/a>&nbsp;would eventually become a concern for bulls.<\/p>\n\n\n\n<p>Staples stocks should underperform the broader market during true bull markets. That has finally been the case the past few weeks, as the relative trend has come crashing down.<\/p>\n\n\n\n<p>Here\u2019s the large-cap Staples Sector SPDR (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlp&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">XLP<\/a>) charted relative to the S&amp;P 500 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" 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\/2-17-1100x537.png\" alt=\"\" class=\"wp-image-190932 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>After three months of staples leadership, we\u2019re seeing an unwind in&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/d\/defensiveinvestmentstrategy.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">defensive<\/a>&nbsp;positioning as investors reposition themselves into riskier stocks. Small caps and speculative growth indexes have caught a bid since last week, while staples have hit three-month relative lows.<\/p>\n\n\n\n<p>This is all very bullish intermarket action, as investors favor more offensive groups. If this risk-on relative price action is going to continue, we should see a downside resolution from XLP\/SPY and an oversold&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/m\/momentum.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">momentum<\/a>&nbsp;reading to confirm it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-international-opportunities\">3\/ <strong>International Opportunities<\/strong><\/h2>\n\n\n\n<p>One of the main knocks on U.S. markets this year has been about thin leadership and big-cap tech stocks driving all the gains. While we don\u2019t agree with this narrative, we know for sure that it doesn\u2019t apply to&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/index.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">indexes<\/a>&nbsp;overseas.<\/p>\n\n\n\n<p>In the chart below, we\u2019re looking at the MSCI EAFE Index (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=efa&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">EFA<\/a>), which gives us a broad representation of developed stock markets outside of North America.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"533\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2-1100x533.jpg\" alt=\"\" class=\"wp-image-190933 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2-1100x533.jpg 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2-700x339.jpg 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2-300x145.jpg 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2-768x372.jpg 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2-1536x745.jpg 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/05\/3-2.jpg 1920w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/533;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>Japan, the U.K., and France are the largest country weightings, and financials and industrials make up more than a third of the sector exposure. This is a big departure from&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/capitalizationweightedindex.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">cap-weighted<\/a>&nbsp;U.S. indexes, which are dominated by technology and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/g\/growthstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">growth stocks<\/a>. EFA has less than an 8% allocation to technology!<\/p>\n\n\n\n<p>This means that a variety of non-growth stocks and sectors must be driving the gains in this index. It can\u2019t be just tech, because there barely is any tech.<\/p>\n\n\n\n<p>With EFA coiling in a high and tight&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/f\/flag.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">flag<\/a>&nbsp;above the breakout level of a textbook base, there could be upside potential for this international index.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-will-dollar-and-rates-catch-higher-with-the-usd-jpy\">4\/ <strong>Will Dollar and Rates Catch Higher With the USD\/JPY?<\/strong><\/h2>\n\n\n\n<p>Six months into 2023, key themes from last year\u2019s markets are creeping back into the foreground.<\/p>\n\n\n\n<p>Yes, it\u2019s the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/u\/usdx.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">U.S. Dollar Index<\/a>&nbsp;(<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=dxy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">DXY<\/a>) and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/interestrate.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">interest rates<\/a>&nbsp;again.&nbsp;<\/p>\n\n\n\n<p>Check out the triple-pane chart of the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/forex\/u\/usd-jpy-us-dollar-japanese-yen-currency-pair.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">USD\/JPY<\/a>, DXY, and the U.S. 10-year&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/t\/treasury-yield.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9217583-20230523&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=052323\" target=\"_blank\" rel=\"noreferrer noopener\">yield<\/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\/4-17-1100x561.png\" alt=\"\" class=\"wp-image-190934 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>These markets practically move tick for tick.&nbsp;<\/p>\n\n\n\n<p>Notice that the USD\/JPY and the U.S. 10-year yield peaked on the same day last October, less than a month after the U.S. Dolla&#8211;r Index. Also, note that all three have carved out potential reversal formations over the past six months.<\/p>\n\n\n\n<p>The lone exception: The USD\/JPY is completing a bearish-to-bullish reversal.<\/p>\n\n\n\n<p>While correlations come and go, we doubt that these markets will decouple in the coming weeks and months.<\/p>\n\n\n\n<p>Instead, the higher-probability outcome points to these lines resolving in the same direction\u2014a pattern all too familiar to last year\u2019s stock market sell-off.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 23rd May 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the past few months, we have seen more tech-related groups build out\u00a0reversal patterns\u00a0and resolve higher.<\/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":[14,5,16,18,6,8,9,22,23,26,3],"tags":[1779,2545,14339,262,11166,1322],"contributors-categories":[13686],"class_list":{"0":"post-190930","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-etfs","7":"category-europe-middle-east-africa","8":"category-forex","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-dxy","18":"tag-efa","19":"tag-skyy","20":"tag-spy","21":"tag-usd-jpy","22":"tag-xlp","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: Tech Aims for the SKYY | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Over the past few months, we have seen more tech-related groups build out\u00a0reversal patterns\u00a0and resolve higher.\" \/>\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\/190930\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: Tech Aims for the SKYY | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"Over the past few months, we have seen more tech-related groups build out\u00a0reversal patterns\u00a0and resolve higher.\" 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