{"id":193886,"date":"2023-07-25T04:11:55","date_gmt":"2023-07-25T08:11:55","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=193886"},"modified":"2024-01-24T12:13:04","modified_gmt":"2024-01-24T17:13:04","slug":"chart-advisor-tech-hits-pause","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-tech-hits-pause\/","title":{"rendered":"Chart Advisor: Tech Hits Pause"},"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-monday-24th-july-2023\">Monday, 24th July, 2023<\/h2>\n\n\n\n<p><strong>1\/ Tech Corrects<\/strong><\/p>\n\n\n\n<p><strong>2\/ It\u2019s Now or Never for Energy<\/strong><\/p>\n\n\n\n<p><strong>3\/ Bitcoin Breaks Down<\/strong><\/p>\n\n\n\n<p><strong>4\/ Gold Miners Hit a Potential Floor<\/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-corrects\">1\/ <strong>Tech Corrects<\/strong><\/h2>\n\n\n\n<p>Tech stocks (as represented by the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/n\/nasdaq100.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">Nasdaq 100<\/a>) are coming off their best first half in history. But perhaps the rally is due for a healthy pause.<\/p>\n\n\n\n<p>After breaking to fresh all-time highs last week, the Technology Sector ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlk&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>) is pulling back below its former 2022 highs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/1-15-1100x541.png\" alt=\"\" class=\"wp-image-193888 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Notice that the 14-period&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/rsi.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">relative strength index (RSI)<\/a>&nbsp;posted a bearish momentum&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/d\/divergence.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">divergence<\/a>&nbsp;as price broke to new all-time highs. The waning momentum indicates that the bulls are tired and in need of breather.<\/p>\n\n\n\n<p>Honestly, we couldn\u2019t think of a better place for tech to digest recent gains than former all-time highs.<\/p>\n\n\n\n<p>It should not come as a surprise if we see continued corrective action for tech and the growth-heavy indexes in the coming weeks. Rather, investors should welcome the pause after tech\u2019s recent sprint.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-it-s-now-or-never-for-energy\">2\/ <strong>It\u2019s Now or Never for Energy<\/strong><\/h2>\n\n\n\n<p>It\u2019s time for energy to catch a relative bid versus tech, especially as&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/g\/growthstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">growth stocks<\/a>&nbsp;take a breather.<\/p>\n\n\n\n<p>In fact, energy vs. tech could be the most important intermarket relationship during the second half of 2023.<\/p>\n\n\n\n<p>A new secular trend favoring&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/v\/valuestock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">value-oriented stocks<\/a>, outperformance overseas, and even the commodity supercycle all hinge on whether energy trends higher relative to tech.<\/p>\n\n\n\n<p>And the energy sector (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xle&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">XLE<\/a>) finds itself at a logical level of&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/s\/support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">support<\/a>&nbsp;vs. technology stocks (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlk&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>), highlighted by a key&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/f\/fibonacciretracement.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">retracement level<\/a>&nbsp;and a shelf of former highs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/2-16-1100x561.png\" alt=\"\" class=\"wp-image-193889 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><\/figure>\n\n\n\n<p>If energy resolves higher on relative terms, the rising rate environment will likely persist, and cyclical assets should benefit the most.&nbsp;<\/p>\n\n\n\n<p>On the flip side, it\u2019s likely back to business as usual with tech and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/d\/disinflation.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">disinflation<\/a>&nbsp;at the helm if the XLE\/XLK ratio continues to fall.<\/p>\n\n\n\n<p>Either way, broad market implications will follow this key intermarket ratio\u2019s resolution.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-bitcoin-breaks-down\">3\/ <strong>Bitcoin Breaks Down<\/strong><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.investopedia.com\/terms\/b\/bitcoin.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">Bitcoin<\/a>&nbsp;(<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=btcusd&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">BTC\/USD<\/a>) has been chopping sideways for over a month as bulls grapple with the $31,000 resistance level.<\/p>\n\n\n\n<p>That all changed today.<\/p>\n\n\n\n<p>Sellers showed up, driving price below the lower bounds of the range. We\u2019ve certainly witnessed it before.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/3-18-1100x541.png\" alt=\"\" class=\"wp-image-193890 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Typically, these short-term patterns tend to resolve in the direction of the underlying trend (which is higher in this case). When they do not, it\u2019s a sign that the trend is starting to wear out and that a&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/reversal.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">reversal<\/a>&nbsp;could be underway.<\/p>\n\n\n\n<p>In addition, momentum has been waning. Not only is there a bearish divergence in place, but momentum couldn\u2019t even reach&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/o\/overbought.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">overbought<\/a>&nbsp;to confirm the latest high.<\/p>\n\n\n\n<p>We could see further downside pressure and at the very least a pause in the uptrend as long as BTC trades below its prior range.<\/p>\n\n\n\n<p>On the other hand, Bitcoin prices could rip higher if bulls reclaim those former lows.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-gold-miners-hit-a-potential-floor\">4\/ <strong>Gold Miners Hit a Potential Floor<\/strong><\/h2>\n\n\n\n<p>When assets climb within strong uptrends, they tend to outperform their alternatives.&nbsp;<\/p>\n\n\n\n<p>It\u2019s called&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/relativestrength.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">relative strength<\/a>. And it\u2019s one of the best tools we utilize.&nbsp;<\/p>\n\n\n\n<p>So while the media will likely focus on the&nbsp;<a href=\"https:\/\/www.investopedia.com\/next-fed-meeting-7551561?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">FOMC meeting<\/a>&nbsp;and the Fed\u2019s forward guidance this week, we\u2019ll monitor price on absolute&nbsp;<em>and&nbsp;<\/em>relative terms instead.<\/p>\n\n\n\n<p>The Gold Miners ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=gdx&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">GDX<\/a>) versus the S&amp;P 500 ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">SPY<\/a>) sits atop our list when it comes to precious metals:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/4-19-1100x551.png\" alt=\"\" class=\"wp-image-193891 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/551;\" \/><\/figure>\n\n\n\n<p>Notice that the GDX-to-SPY ratio ripped higher during gold\u2019s rally in 2016 and 2019-2020. We could see similar relative strength from GDX versus the broader market if and when&nbsp;<a href=\"https:\/\/www.investopedia.com\/articles\/economics\/09\/why-gold-matters.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9769949-20230724&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072423\" target=\"_blank\" rel=\"noreferrer noopener\">gold<\/a>&nbsp;breaks out.<\/p>\n\n\n\n<p>The shelf of former lows marks a logical place for gold miners to assume a leadership role.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 24th July 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tech stocks (as represented by the\u00a0Nasdaq 100) are coming off their best first half in history. But perhaps the rally is due for a healthy pause.<\/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":[21,14,18,6,8,9,22,23,26,3],"tags":[8083,2172,1081,262,2223,1302],"contributors-categories":[13686],"class_list":{"0":"post-193886","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-etfs","8":"category-macro","9":"category-north-america","10":"category-region","11":"category-securities","12":"category-stocks","13":"category-technical-analysis","14":"category-text-articles","15":"category-traders-insight","16":"tag-btcusd","17":"tag-gdx","18":"tag-nasdaq-100","19":"tag-spy","20":"tag-xle","21":"tag-xlk","22":"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 Hits Pause | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Tech stocks (as represented by the\u00a0Nasdaq 100) are coming off their best first half in history. 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