{"id":206500,"date":"2025-07-23T10:44:48","date_gmt":"2025-07-23T14:44:48","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/uncategorized\/chart-advisor-finally-goldilocks\/"},"modified":"2025-07-25T12:20:02","modified_gmt":"2025-07-25T12:20:02","slug":"chart-advisor-finally-goldilocks","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/securities\/macro\/chart-advisor-finally-goldilocks\/","title":{"rendered":"Chart Advisor: Finally, Goldilocks"},"content":{"rendered":"\n<p>By&nbsp;<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=70e2beaa9fa7446b97def9626a0a7136&amp;_e=RW8FcVMjs4Lfl6HnVEn_By92hlzY9c74xq5SaILHnkGm5McSE5pWHt9CyckOAPdOC_QTZpvn8JGOUkP4hPuLPkRNHTg6hEgR7T21hPfR-3KQAU6DSNHIBK-PZWXtS2V_baJ1QKkPRjT8pT8eZffVTgJJFRSJVZP7i8fj3Vo3WsEx2AndtgdpvkM9lKWWHry_6DKFaVsp1WbdutAL_DxRIaMrycpDXurBVwfakMuxLs8qi0cqrZORwGk_0C27yHNojIMHaI81ECR1LELcQGYx2ST-UABEW7alosAfxrWIFaidAg0UnYLJuD_24GrVSsz9T0N8mFFk40Go65NrqGFZDruLb17wKpIDAAVC01PEG-mvh50Bz0RW9_3u0vrU0EOzArmuOre6iBOP7NIMGCUu6RsYBZQ4bo_aPrOHCIong6m6UMRIUTrHxD8NvUs6_GWMjHOHmYdOObVXoF0OuCznooKLr3ppPw5LZhq61M7oYhw%3D\">C. Theodore Hicks II, CMT, CFP, CKA<\/a><\/p>\n\n\n\n<p><strong>1\/&nbsp;Doji on SPY &amp; Portfolio Math<\/strong><\/p>\n\n\n\n<p><strong>2\/&nbsp;Participation Broadening Out?<\/strong><\/p>\n\n\n\n<p><strong>3\/&nbsp;Not as Much as I\u2019d Like<\/strong><\/p>\n\n\n\n<p><strong>4\/ On&nbsp;Balance Volume is Encouraging<\/strong><\/p>\n\n\n\n<p><strong>5\/ The Goldilocks Economy<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with CMT Association on this newsletter. &nbsp;The 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>Doji on SPY &amp; Portfolio Math<\/strong><\/p>\n\n\n\n<p>Our first chart today is of SPY, one of the ETFs that tracks the S&amp;P 500. The first thing I want to point out is that doji candle representing yesterday\u2019s action. The good news is that SPY was able to close back at the open even after trading down most of the day. But a doji candle is one that represents indecision. We will come back to that in just a minute.<\/p>\n\n\n\n<p>But before we go on, Chart 1 also illustrates what we call Portfolio Math. I cover this in much greater depth in my book,&nbsp;<em>Evidence-Based Investing.<\/em>&nbsp;Notice the two price measurements. While they are approximations, notice that the S&amp;P 500 dropped ~21%. But, in order to get back to break even, it had to rally 27%. This is an example of Portfolio Math. Losses work geometrically against you. The larger they are, the harder they are to recover from. That should influence your strategy.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0723-Wednesday-Chart-1-1100x541.png\" alt=\"\" class=\"wp-image-206506 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-1-1100x541.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-1-700x344.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-1-300x148.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-1-768x378.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-1-1536x756.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-1.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Past performance is not indicative of future results<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2\">2\/<\/h2>\n\n\n\n<p><strong>Broadening Out<\/strong><\/p>\n\n\n\n<p>Chart 2 today is for RSP. This is the Invesco&nbsp;<strong>Equal-Weight&nbsp;<\/strong>S&amp;P 500 ETF. Here we see a different story. This story has a bit more conviction. Here we see that RSP opened lower on the day but had a strong rally and, perhaps more importantly, closed near the day\u2019s highs. This gives us a clue that perhaps the market is broadening out a bit. Perhaps more stocks are beginning to participate in this rally? If that\u2019s true, then the bull-market has legs. If that is NOT true, then this bull market will be short-lived.<\/p>\n\n\n\n<p>The lower blue-gray bar represents resistance. The good news is that RSP has broken above that level and has survived a recent test of that level. Inside the red circle, I\u2019m highlighting the fact that this mini-consolidation area represents a moment of truth. Notice how yesterday\u2019s close was right at the highs of this mini-consolidation area&nbsp;<strong>plus<\/strong>&nbsp;it represents the bottom of that gap higher from November 11th. If RSP can convincingly move above this consolidation area, it signals a strong chance that RSP will also be making new highs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0723-Wednesday-Chart-2-1100x541.png\" alt=\"\" class=\"wp-image-206505 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-2-1100x541.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-2-700x344.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-2-300x148.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-2-768x378.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-2-1536x756.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-2.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Past performance is not indicative of future results<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3\">3\/<\/h2>\n\n\n\n<p><strong>Not As Much As I&#8217;d Like<\/strong><\/p>\n\n\n\n<p>Here we see a problem. Our third chart today is of IWM, the Russell 2000 ETF which is broadly considered the best measure for the small-company universe here in the United States. Here we see that the current area of consolidation does have some more baggage to overcome. These levels are the highs from July 2024. This area has been a really challenging zone for the small company index. While I\u2019m not showing it here, I could zoom out even further and show you that this is about the same level as the highs from 2021.<\/p>\n\n\n\n<p>We should not be surprised if small companies really struggle to truly break free.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0723-Wednesday-Chart-3-1100x541.png\" alt=\"\" class=\"wp-image-206504 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-3-1100x541.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-3-700x344.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-3-300x148.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-3-768x378.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-3-1536x756.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-3.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Past performance is not indicative of future results<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4\">4\/<\/h2>\n\n\n\n<p><strong>On Balance Volume Is Encouraging<\/strong><\/p>\n\n\n\n<p>If you are not familiar with On Balance Volume, take a&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/o\/onbalancevolume.asp?hid=6b90736a47d32dc744900798ce540f3858c66c03&amp;did=18694438-20250723&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072325\">look at this article from Investopedia<\/a>. Our fourth chart today shows the Russell 3000 in the top pane and On Balance Volume in the bottom pane. While the Russell 2000 captures the small-cap universe pretty well, I use the Russell 3000 to examine the entire US stock market as it captures about 95% of the US stocks.<\/p>\n\n\n\n<p>In short, the fact that On Balance Volume is making a new high while price did not make a new high, that\u2019s an encouraging sign. No guarantees of course, but I like what this indicator is telling me.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0723-Wednesday-Chart-4-1100x541.png\" alt=\"\" class=\"wp-image-206502 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-4-1100x541.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-4-700x344.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-4-300x148.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-4-768x378.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-4-1536x756.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-4.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Past performance is not indicative of future results<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-5\">5\/<\/h2>\n\n\n\n<p><strong>Finally, Goldilocks<\/strong><\/p>\n\n\n\n<p>In yesterday\u2019s newsletter, I used the term \u201cGoldilocks Economy\u201d. While most would like to see the economy grow at a faster rate, what we really want is an economy that is neither too hot nor too cold.<\/p>\n\n\n\n<p>In this final chart, I\u2019m showing the S&amp;P 500 index dating back to its creation. The bottom pane is showing the nation\u2019s GDP. Ultimately, when our economy is growing at a rate between those two red lines (-0.5 &#8211; +2.0), our stock market has a tendency to do well. If we grow much faster or decline much further, that\u2019s when we see big stock market shocks. We don\u2019t want those.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0723-Wednesday-Chart-5-1100x541.png\" alt=\"\" class=\"wp-image-206501 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-5-1100x541.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-5-700x344.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-5-300x148.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-5-768x378.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-5-1536x756.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/07\/2025-0723-Wednesday-Chart-5.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>Past performance is not indicative of future results <\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 23rd July 2025<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By&nbsp;C. Theodore Hicks II, CMT, CFP, CKA 1\/&nbsp;Doji on SPY &amp; Portfolio Math 2\/&nbsp;Participation Broadening Out? 3\/&nbsp;Not as Much as I\u2019d Like 4\/ On&nbsp;Balance Volume is Encouraging 5\/ The Goldilocks Economy Investopedia is partnering with CMT Association on this newsletter. &nbsp;The contents of this newsletter are for informational and educational purposes only, however, and do [&hellip;]<\/p>\n","protected":false},"author":186,"featured_media":206506,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[335,1150,146,147,8,12,153,22,148,7],"tags":[3716,1172,2669,955],"contributors-categories":[503],"class_list":{"0":"post-206500","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-etfs","8":"category-etps","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-invesco-sp-500-equal-weight-etf","18":"tag-iwm","19":"tag-russell-3000","20":"tag-spy","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 v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Finally, Goldilocks | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Our first chart today is of SPY, one of the ETFs that tracks the S&amp;P 500. 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