Report
Dave Nicoski ...
  • Ross LaDuke
EUR 42.49 For Business Accounts Only

Vermilion Compass: Weekly Equity Strategy

Downgrading Utilities to Market Weight

We remain bullish since our 4/22/25 Compass, and we will maintain our bullish outlook as long as market dynamics remain healthy and the S&P 500 (SPX) is above 6028-6059. Shorter-term, the SPX continues to make higher lows as new leaders emerge and rotations continue; we would need to see a break below 6340-6360 in order to have confidence that a consolidation period has finally begun. Short-term supports on SPX include 6400-6410, 6340-6360, 6200, 6100-6150, and 6028-6059.

Downgrading Utilities to Market Weight. We are downgrading Utilities (XLU) to market weight -- reduce exposure. RS is violating the 1.5-year uptrend on the XLU; new RS lows for XLU and other defensive Sectors (namely Staples and Health Care) is very bullish for the broad equity market... see chart below.
Time for Prior Leadership to Shine? Various prior leadership areas from the April lows appear ready to continue higher following 1+ month consolidations. This includes software (IGV), semiconductors (XSD), and Renaissance IPO (IPO), which display bullish price and RS inflections. Since late-August we have specifically been suggesting to buy software names on the pullback on page 2 of our Compass reports (PLTR, APP, TEM, RZLV, SHOP, PRCH, LIF, FROG, COMP, U, and NN among others), and it continues to be our favorite area to buy. With that said, the same leaders that we have discussed over the past two months continue to lead -- biotechnology (XBI), Bitcoin miners (WGMI), homebuilders (ITB), metals & mining (XME), gold miners (GDX), China (MCHI), retail (XRT), uranium (URA), airlines (JETS), banks (KRE, KBE), cannabis (MSOS), and solar (TAN)... see pages 2-7.
Market Dynamics Remain Risk-On. The entire list of risk-on market dynamics that we discuss here on a weekly basis remain in place. Last week (9/3/25 Compass), as investors were seemingly concerned about rising Treasury yields, we discussed how these concerns were unfounded, and we continue to expect the 10-year Treasury yield to move lower toward 3.6%-3.8% -- as discussed for months. We will be sure to let you know if this risk-on list starts to take a turn for the worse, but for now it remains "wheels up" for the broad equity market.
Underlyings
Alamos Gold Inc.

Alamos Gold is engaged in the exploration, mine development, and the mining and extraction of precious metals, primarily gold. Co.'s s primary asset is the Mulatos Mine and holds the mineral rights to the Salamandra group of concessions in the State of Sonora, Mexico, which includes several known satellite gold occurrences.

APPLOVIN CORP

Barrick Gold Corporation

Barrick Gold is engaged in the production and sale of gold, as well as related activities such as exploration and mine development. Co. also produces copper and hold interests in oil and gas properties located in Canada. Co.'s mining operations are concentrated in three regional business units: North America, South America and Australia Pacific. Co. also hold a 73.9% equity interest in African Barrick Gold plc that owns gold mines and exploration properties in Africa. Co.'s copper business unit contains producing copper mines located in Chile and Zambia; and a mine under construction located in Saudi Arabia.

Cadence Design Systems Inc.

Cadence Design Systems provides solutions that enable its customers to design electronic products. The company's products offerings include software, hardware, services and reusable integrated circuit (IC) design blocks, which are referred to as intellectual property (IP). The company provides maintenance for its software, hardware, and IP product offerings. The company combines its products and technologies into categories related to design activities: Functional Verification (including hardware for emulation and prototyping); Digital IC Design and Signoff; Custom IC Design and Simulation; System Interconnect and Analysis (printed circuit boards and IC package); and IP (includes design IP and verification IP).

Franco-Nevada Corporation

Franco-Nevada is a gold-focused royalty and stream company with additional interests in silver, platinum group metals, oil and gas and other resource assets located in the U.S., Canada, Mexico, Peru, Chile and Africa. Co.'s portfolio includes 340 mineral and oil and gas assets covering properties at various stages from production to early stage exploration.

GRAIL INC.

Hims and Hers Health Inc (A)

I Grandi Viaggi

I Grandi Viaggi SpA is an Italy-based company engaged in the tourism and hotel industry. The Company focuses its activities on three main business areas: Villages of Property, Marketed Villages and Tour Operator. The Villages of Property sector are the main business, which consists of the management and commercialization of the hotels owned by the Company. The Villages Marketed sector consists of the commercialization of stays at hotels owned by third parties. The Tour Operator sector is concerned with organization of tours and cruises. It offers package tours to Italy, European destinations, as well as the United States and the Orient. It operates through directed subsidiaries and affiliates, such as IGV Hotels SpA, IGV Club Srl, Vacanze Zanzibar Ltd and Vacanze Seychelles Ltd.

IAMGOLD Corporation

IAMGold is engaged in the exploration for, development and operation of gold mining properties, and the operation of a niobium mine.

Jumia Technologies

Kinross Gold Corporation

Kinross Gold is engaged in the mining and processing of gold and, as a by-product, silver ore and the exploration for, and the acquisition of, gold bearing properties in the Americas, the Russian Federation, West Africa and worldwide. As of Dec 31 2013, Co.'s proven mineral reserves for gold and silver were 1,122 ounces and 1,179 ounces respectively.7,883 7,883 7,883

Micron Technology Inc.

Micron Technology provides memory and storage solutions. The company's portfolio of memory and storage technologies include Dynamic Random Access Memory, Not And, 3D XPoint? memory, and Not Or. The company's segments are: Compute and Networking Business, which includes memory products sold into client, cloud server, enterprise, graphics, and networking markets; Mobile Business, which includes memory products sold into smartphone and other mobile-device markets; Storage Business, which includes Solid-State Drives and component-level solutions sold into enterprise and cloud, client, and consumer storage markets; and Embedded Business, which includes memory and storage products.

NEM Insurance

Palantir Technologies

REDDIT INC

REZOLVE AI LIMITED

RICHTECH ROBOTICS INC

ROYAL GOLD INC.

Royal Gold acquires and manages precious metal streams, royalties and similar interests. The company acquires existing stream and royalty interests or finances projects that are in production or in the development stage in exchange for stream or royalty interests. A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. Royalties are non-operating interests in mining projects that provide the right to a portion of revenue or metals produced from the project after deducting specified costs, if any.

SHOPIFY INC.

Shopify provides a cloud-based commerce platform designed for small and medium-sized businesses. Merchants use its software to run their business across all of their sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops. Co. provides a platform for merchants to create an omni-channel experience that helps showcase the merchant's brand and grow its business. Co.'s platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting.

SOUNDHOUND AI INC

Unity Software

Zillow Group Inc. Class C

Zillow Group operates real estate and home-related brands on mobile and the web which focus on all stages of the home lifecycle: renting, buying, selling and financing. The company's portfolio of consumer brands includes Zillow, Trulia, Mortgage Lenders of America, StreetEasy, HotPads, Naked Apartments, RealEstate.com and Out East. The company operates a number of business brands for real estate, rental and mortgage personnel. The company provides advertising products and services for real estate, rental, and mortgage personnel that enable them to create and promote content for consumers. In addition, the company provides consumers with information products and services to enable them to make decisions about homes.

Provider
Vermilion Research
Vermilion Research

Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.

Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.

Analysts
Dave Nicoski

Ross LaDuke

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