{"id":208914,"date":"2024-07-08T09:31:45","date_gmt":"2024-07-08T13:31:45","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=208914"},"modified":"2024-08-28T15:29:24","modified_gmt":"2024-08-28T19:29:24","slug":"chart-advisors-a-well-respected-bull-move","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisors-a-well-respected-bull-move\/","title":{"rendered":"Chart Advisors: A Well-Respected Bull Move"},"content":{"rendered":"\n<p>By Ryan Gorman, CFA, CMT, BFA<\/p>\n\n\n\n<p><strong>1\/ A Weekly Look at the S&amp;P 500<\/strong><\/p>\n\n\n\n<p><strong>2\/ The Same 500 Stocks, but an Equal Vote<\/strong><\/p>\n\n\n\n<p><strong>3\/ A Look Below the Surface<\/strong><\/p>\n\n\n\n<p><strong>4\/ CEG Still in an Uptrend<\/strong><\/p>\n\n\n\n<p><strong>5\/ GE Looking to Plot its Next Course<\/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\">1\/<\/h2>\n\n\n\n<p><strong>A Weekly Look at the S&amp;P 500<\/strong><\/p>\n\n\n\n<p>It is a new week, and I am happy to back with you looking at some charts. Last week was a solid week for the major indices, though volume was light on the holiday shortened week.&nbsp;&nbsp;<\/p>\n\n\n\n<p>The market cap weighted S&amp;P 500 has had a great year so far. The chart below shows a well-respected channel since the bull move began in fall 2022. The 30-week moving average is up and the price is firmly above it. The elder bars are still green, but the top of the channel is now being hit. Seasonally, July is the best month of the third quarter, but returns are front loaded in the beginning of the month.\u00a0\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"990\" height=\"591\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-1.png\" alt=\"\" class=\"wp-image-208915 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-1.png 990w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-1-700x418.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-1-300x179.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-1-768x458.png 768w\" data-sizes=\"(max-width: 990px) 100vw, 990px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 990px; aspect-ratio: 990\/591;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size\"><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>We must respect the trend, and this is not a call for a top. There could be a throw over acceleration of the trend. Price could even ride the upper trendline. It is worth noting the distance from the 30-week moving average and the upper trendline could provide a \u201clogical\u201d place to digest some gains.&nbsp;<\/p>\n\n\n\n<p>More about the Elder impulse system here:\u00a0<a href=\"https:\/\/chartschool.stockcharts.com\/table-of-contents\/chart-analysis\/chart-types\/elder-impulse-system?hid=c9995a974e40cc43c0e928811aa371d9a0678fd1&amp;did=13693176-20240708&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=070824#using_with_sharpcharts\">Elder Impulse System | ChartSchool | StockCharts.com<\/a>\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2\">2\/<\/h2>\n\n\n\n<p><strong>The Same 500 Stocks, but an Equal Vote<\/strong><\/p>\n\n\n\n<p>One thing that has been interesting to me is the spread between the capitalization weighted averages and the same equal weight version. The gains have been concentrated in a few large cap names. This has happened a few times in history, generally the big names catch down. However, there is no way to time when that happens.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"990\" height=\"591\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-2.png\" alt=\"\" class=\"wp-image-208916 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-2.png 990w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-2-700x418.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-2-300x179.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-2-768x458.png 768w\" data-sizes=\"(max-width: 990px) 100vw, 990px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 990px; aspect-ratio: 990\/591;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size\"><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>Above we see the equal weight S&amp;P 500. There has not been a new high in this index since March. In fact, it put in a -3% return for the second quarter as the Cap weighted returned almost 5%. The elder bar is blue, which shows indecision. There is also a symmetrical triangle that further shows indecision. Looks like we could get a decent move either way. This week we get CPI data and more testimony from Powell.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3\">3\/<\/h2>\n\n\n\n<p><strong>A Look Below the Surface<\/strong><\/p>\n\n\n\n<p>In Dr. Elder\u2019s book \u201cCome into my Trading Room\u201d, he provides a look at weekly new high and new low indicators. I like this one in addition to the cumulative version because you get better short-term divergences for tactical moves.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"700\" height=\"312\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-3.png\" alt=\"\" class=\"wp-image-208917 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-3.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-3-300x134.png 300w\" data-sizes=\"(max-width: 700px) 100vw, 700px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 700px; aspect-ratio: 700\/312;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size\"><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>We can clearly see the new all-time highs in the index have not been supported by the broad stock market. While these divergences are not triggers in and of themselves, they are weak conditions. Though the number of new lows is quite small now, the last time we had a divergence of new highs in price, but more 52-week lows was fall of 2021 when the Nasdaq peaked. The Russell 2000 small cap index had peaked many months before. In fact, 950 days+ later, the Russell has not made a new high!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4\">4\/<\/h2>\n\n\n\n<p><strong>CEG Still in an Uptrend<\/strong><\/p>\n\n\n\n<p>While there is a case made above for potential near term caution, the trend is still up, and divergences are not triggers. So, let\u2019s look at a couple names.&nbsp;<\/p>\n\n\n\n<p>Running a weekly 20-week high momentum trend screen, I see a lot of the leaders we have all heard about. I selected Constellation Energy as this is a name that has also come through a value stock screen this year. I liked the idea as the boom in AI will require more power consumption. This requires investment and growth to certain utility companies.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img decoding=\"async\" width=\"989\" height=\"940\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-4.png\" alt=\"\" class=\"wp-image-208918 lazyload\" style=\"--smush-placeholder-width: 989px; aspect-ratio: 989\/940;width:1450px;height:auto\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-4.png 989w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-4-700x665.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-4-300x285.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-4-768x730.png 768w\" data-sizes=\"(max-width: 989px) 100vw, 989px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size\"><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>This name has pulled back nicely. The 20 week and 50 week moving averages have converged and played support. There is also a clear support line in the same area. The elder bar turned green on Friday after some consolidation. If the interest rate reaction to last week\u2019s job report continues, there is another tail wind for the sector.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-5\">5\/<\/h2>\n\n\n\n<p><strong>GE Looking to Plot its Next Course<\/strong><\/p>\n\n\n\n<p>The last idea was a momentum\/trend name. I looked through a short list of mean reversion names and there was not much in the large cap space. Looking for squeeze candidates proved a lot more fruitful. A squeeze is when the Bollinger bands are within the Keltner channels. These are volatility-based indicators. The idea is that periods of low volatility led to higher volatility, which is a trader\u2019s friend.&nbsp;<\/p>\n\n\n\n<p>GE healthcare struck me as it is still a strong name that has been a momentum move this year.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"990\" height=\"938\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-5.png\" alt=\"\" class=\"wp-image-208919 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-5.png 990w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-5-700x663.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-5-300x284.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/07\/08.07-5-768x728.png 768w\" data-sizes=\"(max-width: 990px) 100vw, 990px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 990px; aspect-ratio: 990\/938;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size\"><em>Courtesy of StockCharts.com<\/em><\/p>\n\n\n\n<p>The name has been consolidating since April. The longer-term trend indicator, Special-K is still in a buy mode. (<a href=\"https:\/\/chartschool.stockcharts.com\/table-of-contents\/technical-indicators-and-overlays\/technical-indicators\/prings-special-k?hid=c9995a974e40cc43c0e928811aa371d9a0678fd1&amp;did=13693176-20240708&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=070824\">Pring&#8217;s Special K | ChartSchool | StockCharts.com<\/a>) The shorter term indicator, the KST is looking to turn up into a buy signal. (<a href=\"https:\/\/chartschool.stockcharts.com\/table-of-contents\/technical-indicators-and-overlays\/technical-indicators\/prings-know-sure-thing-kst?hid=c9995a974e40cc43c0e928811aa371d9a0678fd1&amp;did=13693176-20240708&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=070824\">Pring&#8217;s Know Sure Thing (KST) | ChartSchool | StockCharts.com<\/a>) The 20 day and 50 day moving averages are tightly converged, further displaying the squeeze reduction in volatility. My one worry is how far away the 200-day moving average is below. The clear trading range gives us levels to watch for a potential breakdown however.\u00a0<\/p>\n\n\n\n<p>If the range is broken to the upside, this could refresh into another stage 2 advance.\u00a0<\/p>\n\n\n\n<p>&#8212;&#8211;<\/p>\n\n\n\n<p>Originally posted 8th July 2024<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The market cap weighted S&amp;P 500 has had a great year so far. The chart below shows a well-respected channel since the bull move began in fall 2022. The 30-week moving average is up and the price is firmly above it. The elder bars are still green, but the top of the channel is now being hit. Seasonally, July is the best month of the third quarter, but returns are front loaded in the beginning of the month.\u00a0\u00a0<\/p>\n","protected":false},"author":186,"featured_media":208920,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[14,18,6,8,9,22,23,26,3],"tags":[217,778,748,7268,207],"contributors-categories":[13686],"class_list":{"0":"post-208914","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","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-cpi","17":"tag-nasdaq","18":"tag-nyse","19":"tag-rsp","20":"tag-spx","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 v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisors: A Well-Respected Bull Move<\/title>\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\/208914\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisors: A Well-Respected Bull Move | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"The market cap weighted S&amp;P 500 has had a great year so far. The chart below shows a well-respected channel since the bull move began in fall 2022. The 30-week moving average is up and the price is firmly above it. The elder bars are still green, but the top of the channel is now being hit. 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