ChartOverlay supports both transparent and translucent modes. See Options: Visibility.
In transparent mode, the overlay is like clear glass. You can see the background clearly and the objects you draw look pretty much like the indicators and studies in the background window.
In translucent mode, the overlay is opaque. You can see through it, but you can also see it. You can control the degree of translucency through the Options dialog. You can also control whether the toolbar and the objects you draw on the overlay are translucent.