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Key Points

    • High Beta/Low Volatility Is Trapped
    • Discretionary/Staples Needs to Bounce Here
    • The Growth/Value Rebound Stalls
    • Copper/Gold Clears an Important Level
    • High Yield vs. Treasuries Gets Rejected

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Key Themes and Relationships

High Beta vs Low Volatility

The High Beta/Low Volatility ratio is trapped between price-based support and resistance as it trades between the 50 and 200-day moving averages. The 14-day RSI is in the middle of the range, and we note that it has not been oversold since December. This gives a small edge to an upside breakout, but the bull case is difficult below the 200-day.

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

Consumer Discretionary vs Consumer Staples (Equal Weight)

The Discretionary/Staples ratio has found support at the flat 50-day moving average, while the 200-day moving average falls toward price-based resistance. Until those levels are overcome to the upside, it is hard to make a bullish case. However, the improving 14-day RSI makes the bear case difficult as well.

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

Growth vs Value (Large Cap)

The Growth/Value ratio is trading between the rising 50-day moving average and the declining 200-day moving average above price-based support. The 14-day RSI is in the middle of the range, confirming the neutral trend.

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 around the pinched moving averages. The 14-day RSI confirms a neutral trend as it trades in the middle of the range. We are still waiting for a winner to emerge.

Copper / Gold chart for March 25th research.

Lumber vs Gold

The Lumber/Gold ratio has been pinned to price-based support by the declining 50-day moving average. The flat 200-day moving average gives us a sense of the longer-term trend. The 14-day RSI remains in a bearish regime.

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

Copper vs Gold

The bounce from support for the Copper/Gold ratio has cleared the 50-day moving average, opening the door to a move to the declining 200-day moving average (which is lined up with resistance now). The 14-day RSI is trying to break from a bearish regime but has been unable.

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

High Yield vs Treasuries

The High Yield to Treasuries ratio has become a ping pong ball between support and resistance and the moving averages. The 14-day RSI is in the middle of the range, providing no guidance.

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

Take-Aways

Bulls to the left of me, bears to the right, here I am. The themes that we track are mostly stuck in the middle. Trapped between support and resistance, trapped between converging moving averages, or both. While the trends in the market over the past month have become incrementally bullish, making all-in bets seems premature until there is a clear direction break in risk appetite.

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Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.