{"id":195652,"date":"2023-08-31T02:47:34","date_gmt":"2023-08-31T06:47:34","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=195652"},"modified":"2024-01-24T12:12:39","modified_gmt":"2024-01-24T17:12:39","slug":"chart-advisor-the-won-that-got-away","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-the-won-that-got-away\/","title":{"rendered":"Chart Advisor: The Won That Got Away"},"content":{"rendered":"\n<p>By&nbsp;<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=6cb108f1e4e44471b627118760081b64&amp;_e=j523DAjg10bRMkaylN2mLCSNqp35tZEhQVKmyq2Xc2AxuYe47IzYsalCcBRjc656IE6gkgR7h4JHwA2IMWw8b5nrJUqD5_-fPiwMwHJAUtjWZ-QUMxsa45N85F0W-h4YMv-4O5yqPOG4UbfJXGIpdRS4GFffkS3SLh-h02HpmaO04E_zWyzmq_m0fQOOXR0QKT94Q7iNrLDUVnwoaogtTfM3C8NH-s7R9EZBspxL7AzXhnr0WUOiX8MysdNcwh_isvW5gpY0hcNdZ_HvfrvP0iubKc1XAy8FR1IOba4pVaGI0zoEZx9wHqIj_t1jX-ejqVuJkQZ3IzpPIXggxZk3uOwsE6qSVTVcF7fOMkpd-GfKHOZA3lETyMg9M5GSMJHN5elhv27YQ3uYFgyNubEu3hoOHaMUn4qTCJJDn0RHFlt0KFw2J5UFKOh4yEMXe3BKTz51y-PF9QUjYzpv5Mp2_A%3D%3D\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>J.C. Parets<\/strong><\/a>&nbsp;&amp;&nbsp;<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=6cb108f1e4e44471b627118760081b64&amp;_e=j523DAjg10bRMkaylN2mLNxgwBvKI-CK2RxAqoQJuUzp75My9ShLnaLVVYlg2N1gyFfs2gZ3BJbUe8IJBAoi7jQrrTwkZJhGtbIPwWiSiRo0npovQIdAQ8Tg2gIjFLwZYi-JXRUZa0j2yrHa3U_Y6sY2cEBmoUGsDRSyywFtH3dYO-MAwEYbVTXabcymXOge8sWHUri_JVRKVgCgQt88IM6XK-btOvTkBsd-3eA4vyX2k9fhL9BDGiupvEfY2MnTznDW_y7j0QG10nNNWj9NWTgjrYJsw6Dkm6mz8a4u2m-ERJI7fK0rN4ofrSeYjsMJi8YLaD-ADnWnPKTncrFifjo220aCD4cx9fam4-6OU3-Fc6-i0GFWsjJjuxke5zrd60lS-Jo1O7g4moEftnjdbaxRhHjBXgU71u5KRJLJenztJ_zj7gP2yOVp71chNZWs\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>All Star Charts<\/strong><\/a><\/p>\n\n\n\n<p><strong>1\/ Industrials Flip Resistance<\/strong><\/p>\n\n\n\n<p><strong>2\/ Investors Remain on Offense<\/strong><\/p>\n\n\n\n<p><strong>3\/ Always a Bull Market Somewhere<\/strong><\/p>\n\n\n\n<p><strong>4\/ The Won That Got Away<\/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-industrials-flip-resistance\">1\/ <strong>Industrials Flip Resistance<\/strong><\/h2>\n\n\n\n<p>With equity markets following through higher after finding a tradable low last week, the strongest stocks and indexes are already testing key former highs.<\/p>\n\n\n\n<p>At the sector level,&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/industrial-goods-sector.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">industrials<\/a>&nbsp;just became the first group to reclaim its 2021-2022 highs. Here is a daily chart of the Invesco Equal Weight Industrials ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=rspn&amp;hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">RSPN<\/a>) hooking back above the breakout level of a multi-year&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/consolidation.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">consolidation<\/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\/08\/1-41-1100x537.png\" alt=\"\" class=\"wp-image-195653 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/537;\" \/><\/figure>\n\n\n\n<p>To be clear, we are not cherry-picking the best-looking industrials index here. The large-cap, mid-cap, and small-cap indexes are also back above their old highs and look very similar.<\/p>\n\n\n\n<p>As long as this is the case, industrials are in a league of their own as the only sector to clear overhead supply. We think other leaders such as technology could soon follow if this is a valid&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakout.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">breakout<\/a>&nbsp;for industrials. We\u2019re watching the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/p\/pivotpoint.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">pivot highs<\/a>&nbsp;from this summer, as a move above these levels would confirm these upside resolutions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-investors-remain-on-offense\">2\/ <strong>Investors Remain on Offense<\/strong><\/h2>\n\n\n\n<p>Some of the best information regarding risk appetite comes from the ratio of the Consumer Staples Sector SPDR ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlp&amp;hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">XLP<\/a>) vs. the S&amp;P 500 ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=spy&amp;hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">SPY<\/a>). How investors are positioning tells us a lot about their expectations for the future.<\/p>\n\n\n\n<p>When investors are playing defense and worried about the future, we see&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/risk-on-risk-off.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">risk-off&nbsp;<\/a>groups like&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/consumerstaples.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">staples<\/a>&nbsp;outperform. That is not what\u2019s taking place today.<\/p>\n\n\n\n<p>This week, XLP\/SPY slipped to its lowest level in over a year:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/08\/2-22-1100x765.png\" alt=\"\" class=\"wp-image-195654 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/765;\" \/><\/figure>\n\n\n\n<p>This tells us that money is not rotating toward&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/d\/defensivestock.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">defensive sectors<\/a>. If this was going to be a more severe or sustained market correction, we\u2019d expect to see staples outperform the broader market. That&#8217;s precisely the opposite of what&#8217;s happening.<\/p>\n\n\n\n<p>This kind of intermarket action speaks to a resiliently bullish risk appetite among investors. This supports a structural bullish thesis for stocks.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-always-a-bull-market-somewhere\">3\/ <strong>Always a Bull Market Somewhere<\/strong><\/h2>\n\n\n\n<p>Cocoa&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/f\/futures.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">futures<\/a>&nbsp;kicked off the next leg higher yesterday, completing a month-long consolidation.<\/p>\n\n\n\n<p>Yes,&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/commodity.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">commodities<\/a>&nbsp;continue to press toward fresh highs.<\/p>\n\n\n\n<p>The daily cocoa chart highlights its slow and steady rise since last September:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/08\/3-21-1100x549.png\" alt=\"\" class=\"wp-image-195655 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/549;\" \/><\/figure>\n\n\n\n<p>Cocoa futures have also remained within a bullish momentum regime since early November\u2014another clear bullish data point.&nbsp;<\/p>\n\n\n\n<p>An&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/rsi.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">overbought<\/a>&nbsp;reading on the 14-day&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/rsi.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">relative strength index (RSI)<\/a>&nbsp;will likely follow today\u2019s session, confirming the breakout.<\/p>\n\n\n\n<p>Whether we actively trade cocoa doesn\u2019t matter. Instead, the chart reveals two essential realities for every investor: Raw materials are in a secular uptrend, and there\u2019s always a bull market somewhere.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-the-won-that-got-away\">4\/ <strong>The Won That Got Away<\/strong><\/h2>\n\n\n\n<p>The U.S. dollar has been puttin\u2019 a hurtin\u2019 on global currencies for over a month.<\/p>\n\n\n\n<p>It\u2019s broken out against the Australian dollar, the New Zealand dollar, and, of course, the Japanese yen.<\/p>\n\n\n\n<p>But the dollar couldn\u2019t manage to get it done regarding the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/forex\/k\/krw-korean-won.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">Korean won (KRW)<\/a>. Check out the USD\/KRW pair:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/08\/4-21-1100x561.png\" alt=\"\" class=\"wp-image-195656 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><\/figure>\n\n\n\n<p>The best dollar bulls could manage was an intraday violation of&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/resistance.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">resistance<\/a>, resulting in a classic&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/w\/whipsaw.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">whipsaw<\/a>. Supply overwhelms demand overhead as momentum fails to reach overbought conditions.<\/p>\n\n\n\n<p>At the same time, the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/u\/usdx.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">U.S. Dollar Index<\/a>&nbsp;(<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=dxy&amp;hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=10133542-20230831&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=083123\" target=\"_blank\" rel=\"noreferrer noopener\">DXY<\/a>) is turning lower after finding resistance at a logical level.<\/p>\n\n\n\n<p>Perhaps the USD\u2019s inability to top the won foreshadows more dollar weakness to come.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 30th August 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With equity markets following through higher after finding a tradable low last week, the strongest stocks and indexes are already testing key former highs. At the sector level, industrials just became the first group to reclaim its 2021-2022 highs. <\/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":[4,21,14,16,17,18,6,9,22,23,26,3],"tags":[1779,15900,15486,262,186,1322],"contributors-categories":[13686],"class_list":{"0":"post-195652","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-asia","7":"category-commodities","8":"category-etfs","9":"category-forex","10":"category-futures","11":"category-macro","12":"category-north-america","13":"category-securities","14":"category-stocks","15":"category-technical-analysis","16":"category-text-articles","17":"category-traders-insight","18":"tag-dxy","19":"tag-krw","20":"tag-rspn","21":"tag-spy","22":"tag-usd","23":"tag-xlp","24":"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: The Won That Got Away | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"With equity markets following through higher after finding a tradable low last week, the strongest stocks and indexes are already testing key former...\" \/>\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\/195652\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: The Won That Got Away | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"With equity markets following through higher after finding a tradable low last week, the strongest stocks and indexes are already testing key former highs. 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