{"id":201442,"date":"2024-01-23T07:50:04","date_gmt":"2024-01-23T12:50:04","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=201442"},"modified":"2024-01-24T13:53:31","modified_gmt":"2024-01-24T18:53:31","slug":"chart-advisor-sp-500-at-all-time-highs","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-sp-500-at-all-time-highs\/","title":{"rendered":"Chart Advisor: S&amp;P 500 at All-Time Highs"},"content":{"rendered":"\n<p>By\u00a0<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=ed1aa73801eb4a5ba344efc52c9546d3&amp;_e=wD-Le4b67l2SilvZsFeXfbw5Y7KEWB5iCNF2G4t9fDbskCFOUKB6xyPzTx-qrsHI6aTh8GSs9Ojxlsj3GhH5-78SVbKlN3s3RvSSiCH6nFWmJYklsty_cYavgcqo5VjlC8B4sPAu3Rxbw2GPg_EfUj6UP3DT_1tIrnDl6FjjlWyNni2YT7NSrgEJDkSdSYa8UBbY_xG3HjWnYsw-bPBw-CjudM1SSa3NfxmWnF2tNrHdYpSUpY-_ckKgWEOwYPAuroe3HMisMOsZ35FOkn2jei8-rnxrSL1uNHN4osKBNHo2zRFhdOSbry34kdTWA-IXsGfm4XGoVY8VlvDZzU7GToW92XYRvUZ8G6D3qATET1MoPQdUa8ZZ94Rt6H8EZG-eccO4iq-zMhweLrVR_aTaOt3rqJeDvz985vQAeBd9Fjpg72myVSnqIgWyyhdew-EF-63u1KX6X7Sy_JIkFA35Bw%3D%3D\" target=\"_blank\" rel=\"noreferrer noopener\">David Cox, CMT, CFA, FCSI, FMA<\/a>\u00a0and\u00a0<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=ed1aa73801eb4a5ba344efc52c9546d3&amp;_e=wD-Le4b67l2SilvZsFeXfbw5Y7KEWB5iCNF2G4t9fDbKcgOBdFtQz47Rn2t-yDNqXTYdNebwmNrwaFKXuLNQ_sT8ie2bsypK2zOniAIPEeX_hsUxoR180KfC6F-pTClrziv0hMiEI4dM_8avyMT4pK0rdJahtWJfux8vvWl0WhKIMecBBOFqTrk2tSrSwpO-79yLonbCDp9fuq16Iqbtj1RcSO6t1uCri3JXHgYPkeOPzt_OOkqrkv8vT2OVZmS2RfEr3Td7TkfQRCTdOxDb_eBUcfgmkxVIuTlhU6sqPfGZf7aHijyR6uPDNDnf7eeVWT_ZrU2olcGTFw-9RfsQbY-GEXhdL-pUW9lSN5y3LrEqNILvjKzwJzEbAzdMdo5_vYzO6yt_WMNysktmwUDAuXISXqJvf2s8vK1JYbooGo1Yz0KCn9FCMBHLYFpw6meeAjMNokFpGv-oMWqFNUyRG-mcJxN-NE94UFVkLWXaqio%3D\" target=\"_blank\" rel=\"noreferrer noopener\">Conor White CMT, CIM<\/a><\/p>\n\n\n\n<p><strong>1\/ S&amp;P 500<\/strong><\/p>\n\n\n\n<p><strong>2\/ Stage 2 Health?<\/strong><\/p>\n\n\n\n<p><strong>3\/ 16-Years of Relative Strength<\/strong><\/p>\n\n\n\n<p><strong>4\/ U.S. Financial Sector<\/strong><\/p>\n\n\n\n<p><strong>5\/ U.S. Banks ($KBE)<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with CMT Association on this newsletter. \u00a0The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-s-amp-p-500\">1\/ <strong>S&amp;P 500<\/strong><\/h2>\n\n\n\n<p>All-time highs.\u00a0 For all the debate about whether stocks should go up, or can go up further, one thing is certain, they just made all-time highs.\u00a0 At all-time highs, there are no investors sitting in a losing position on their exposure and instead, it\u2019s the\u00a0<a href=\"https:\/\/www.investopedia.com\/terms\/s\/shortselling.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">short sellers<\/a>\u00a0who are on the wrong side and who sit with losses.\u00a0 And those short sellers remain fuel for the future, given they represent forced buying vs. the rest of investors who can make their own informed decisions.\u00a0 When prices push past prior highs, which can offer\u00a0<a href=\"https:\/\/www.investopedia.com\/terms\/r\/resistance.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">resistance<\/a>, they take away another piece of the bearish narrative that some have clung to, since the market bottomed 15-months ago.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/1-24-1100x559.png\" alt=\"\" class=\"wp-image-201443 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/559;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-stage-2-health\">2\/ <strong>Stage 2 Health?<\/strong><\/h2>\n\n\n\n<p>Following on the\u00a0<a href=\"https:\/\/www.investopedia.com\/articles\/investing\/070715\/trading-stage-analysis.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">work of Stan Weinstein<\/a>, I like to keep an eye on the percentage of stocks that are in a #Stage2 uptrends.\u00a0 How do we define it?\u00a0 Price needs to be above a 200-day moving average.\u00a0 The 150-day moving average must be above the 200-day moving average AND, the 200-day moving average must be rising itself.\u00a0 When the % of stocks in #Stage2 uptrends improves to more than 30% after a bear market, it tends to evidence sufficient improvement to see higher prices.\u00a0 The\u00a0<a href=\"https:\/\/www.investopedia.com\/articles\/investing\/090414\/sp-500-index-you-need-know.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">S&amp;P 500<\/a>\u00a0currently has 51.5% of stocks in #Stage2 uptrends.\u00a0 Not nearly what we saw at the highs in 2020 (yet?), when more than 80% of stocks were there, which perhaps offers lots of room yet for further improvement.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/2-14-1100x623.png\" alt=\"\" class=\"wp-image-201444 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/623;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-16-years-of-relative-strength\">3\/ <strong>16-Years of Relative Strength<\/strong><\/h2>\n\n\n\n<p>Many investors spend an inordinate amount of time trying to figure out what stock is going to rise, or what stock deserves to fall.\u00a0 By using\u00a0<a href=\"https:\/\/www.investopedia.com\/terms\/r\/relativestrength.asp?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">relative strength<\/a>, we can seek to understand what stocks, or groups of stocks, are rising (or falling) more strongly than the market itself.\u00a0 Because if we as investors, want to beat (outperform) the stock market, we have own stocks that are rising more strongly.\u00a0 The semiconductor stocks are shown here, vs. the S&amp;P 500.\u00a0 The chart shows that since the 2008 lows, the semiconductor stocks have been in a relative uptrend for the past 16 years (that\u2019s a LONG time!).\u00a0 And so any debate about this group of stocks aside, do know, that a 16-year relative weekly chart won\u2019t change on a dime or with a down day in the market.\u00a0 Know the trend and follow the trend, until the trend ends.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"623\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14-1100x623.png\" alt=\"\" class=\"wp-image-201445 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14-1100x623.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14-700x397.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14-300x170.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14-768x435.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14-1536x870.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/3-14.png 1920w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/623;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-u-s-financial-sector\">4\/ <strong>U.S. Financial Sector<\/strong><\/h2>\n\n\n\n<p>The financials have been pretty weak for some time and certainly far from an exciting part of the market since the 2022 lows.\u00a0 But we\u2019re seeing some very constructive action if we look underneath, and in this case, let\u2019s do some more Stage 2 analysis on the SPDR Financials (<a href=\"https:\/\/www.ssga.com\/us\/en\/intermediary\/etfs\/funds\/the-financial-select-sector-spdr-fund-xlf?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">$XLF<\/a>) sector.\u00a0 You can see that we just saw a surge of stocks come to life after the August \u2013 October, 2023 correction and we now have 79.2% of stocks in #Stage2 uptrends, the highest level since 2021.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/4-10-1100x559.png\" alt=\"\" class=\"wp-image-201446 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/559;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-5-u-s-banks-kbe\">5\/ <strong>U.S. Banks ($KBE)<\/strong><\/h2>\n\n\n\n<p>With the improvement just discussed in the financial sector, let\u2019s look at another chart, this time of the SPDR Bank ETF (<a href=\"https:\/\/www.ssga.com\/us\/en\/intermediary\/etfs\/funds\/spdr-sp-bank-etf-kbe?hid=52e0514b725a58fa5560211dfc847e5115778175&amp;did=11694927-20240123&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=012324\">$KBE<\/a>), which itself is in a relative uptrend vs. the SPDR Financial ($XLF) and outperforming the broader sector.\u00a0 It has reclaimed March \u201923 breakdown level, that happened when a number of U.S. financial institutions collapsed, and that in itself is constructive action.\u00a0 Now, you can see on the daily chart (green arrow), a pullback against the recent breakout and right down to the line that marked the collapse level.\u00a0 In the bottom panel, we can see further, that the $KBE is outperforming the S&amp;P 500 by about 5% over the past six-months.\u00a0 Relative strength helps us, so let\u2019s be open minded about what it tells us, regardless of our own opinions.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/5-5-1100x560.png\" alt=\"\" class=\"wp-image-201447 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/560;\" \/><\/figure>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 23d January 2024<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many investors spend an inordinate amount of time trying to figure out what stock is going to rise, or what stock deserves to fall.  By using relative strength, we can seek to understand what stocks, or groups of stocks, are rising (or falling) more strongly than the market itself.<\/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":[14,18,6,9,22,23,26,3],"tags":[1782,2006],"contributors-categories":[13686],"class_list":{"0":"post-201442","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-etfs","7":"category-macro","8":"category-north-america","9":"category-securities","10":"category-stocks","11":"category-technical-analysis","12":"category-text-articles","13":"category-traders-insight","14":"tag-kbe","15":"tag-xlf","16":"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 v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: S&amp;P 500 at All-Time Highs<\/title>\n<meta name=\"description\" content=\"Many investors spend an inordinate amount of time trying to figure out what stock is going to rise, or what stock deserves to fall. 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