Decidedly
Neutral

Key Points

Key Themes and Relationships

High Beta vs Low Volatility

The High Beta to Low Volatility Ratio continues to battle, retaking the 50-day moving average while holding below the 200-day moving average. Recent strength has put the ratio into a neutral position within the consolidation that has been in place since February of last year. The 14-day RSI is also in a neutral position after making a higher low recently, trading below the 60 level.

Consumer Discretionary vs Consumer Staples (Equal Weight)

The Discretionary/Staples ratio has thus far failed in its attempt to break above the 50-day moving average while remaining below the declining 200-day moving average. After making a higher low recently, the 14-day RSI is turning down after failing to achieve a break of the 60 level. These dynamics keep the bears in control of the trend for now.

Lumber vs Gold

The Lumber/Gold Ratio continues to retreat after failing to hold its recent breakout, moving below the 50-day moving average. The ratio is still above the flat 200-day moving average, putting this volatile relationship in a neutral position. The 14-day RSI is nearing an oversold condition after failing to confirm when the ratio tried to breakout.

Copper vs Gold

Eventually, there will be something different to write about the Copper/Gold ratio, but this is not the week. The ratio remains mired in a consolidation, oscillating around the 50 and 200-day moving averages. The 14-day RSI confirms this neutral trend as it sits in the middle of the range and refuses to tip its hand as to a possible directional break for the ratio.

Small vs Large

After showing much promise over the past few weeks, the ratio of Small Caps to Large Caps has failed to break above the 200-day moving average, remains below the October/November peaks, and has moved below the 50-day moving average. This trifecta of defeat damped the odds that Small Caps are going to take a leadership position in the near-term. The 14-day RSI is moving lower, breaking its short-term uptrend.

Growth vs Value

The Large Cap Growth vs. Value theme has improved over the past week, climbing to retake the declining 50-day moving average while remaining below the 200-day moving average. After making a higher low, the 14-day RSI is moving to the upside with its sights set on the 60-level. The net impact is that the ratio is now in a neutral position, and we will continue to look for a clear directional bias.

Take-Aways