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Take-Aways:

The neutral trends that we highlighted last week for the themes that we track remain in place this week. Our neutral view on the market has a downside bias largely because both the index and these themes have not been able to maintain upside traction. This week we introduce the Semiconductor vs. S&P 500 theme, which is on the verge of reaching its summer low.

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Key Themes and Relationships

Semiconductors vs. S&P 500

Semiconductors are below the declining 50 and 200-day moving averages relative to the S&P 500. This bearish trend has been in place for most of 2022, confirmed by the 14-day RSI spending most of the year in a bearish regime.

High Beta / Low Volatility chart for March 25th research.

High Beta vs. Low Volatility

The High Beta/Low Volatility ratio remains trapped between support and resistance and between the 50 and 200-day moving averages. The price trend is neutral. The 14-day RSI is fighting to hold above the 40 level, a sign that downside momentum continues to wane.

High Beta / Low Volatility chart for March 25th research.

Consumer Discretionary vs Consumer Staples (Equal Weight)

The Discretionary/Staples ratio remains stuck between the rising 50-day moving averages and the declining 200-day moving average, below price-based resistance. We continue to see a base being built as the 14-day RSI makes higher lows. However, until the ratio clears resistance and the 200-day moving average, it is hard to make a strong case for sustained upside.

Discretionary / Staples (EW) chart for March 25th research.

Growth vs Value (Large Cap)

The Growth/Value ratio remains below the 50 and 200-day moving averages. The ratio is holding above price-based support, and the 14-day RSI is fighting hard at the 40-level. The trend is neutral with a cautious bias.

Lumber / Gold chart for March 25th research.

Small Caps vs Large Caps

The Small Cap/Large Cap ratio remains between price-based support and resistance as it trades below the 50 and 200-day moving averages. The 14-day RSI is in the middle of the range, confirming the neutral price trend.

Copper / Gold chart for March 25th research.

High Yield vs Treasuries

The High Yield to Treasuries ratio remains stuck between support and resistance and is now below the 50 and 200-day moving averages. The trend here remains neutral, confirmed by the 14-day RSI trading in the middle of the range.

Small Caps / Large Caps chart for March 25th research.

Lumber vs Gold

The Lumber/Gold ratio continues to test but has not broken price-based support below the 50 and 200-day moving averages. The 14-day RSI is in the middle of the range but remains in a bearish regime.

Growth vs Value (Large Cap) chart for March 25th research.

Copper vs Gold

The Copper/Gold ratio is moving higher between support and resistance and the moving averages. The trend is neutral, confirmed by the RSI sitting in the middle of the range.

Growth vs Value (Large Cap) chart for March 25th research.

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