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Vermilion ETF Pathfinder: Actionable ETF research & Ideas

Are the Lows In for SPX and QQQ?

We downgraded our near-term outlook on the S&P 500 (SPX) and Nasdaq 100 (QQQ) to neutral as of last Wednesday (11/19/25 Compass), after being bullish since our 4/22/25 Compass. The SPX, QQQ, and Russell 2000 (IWM) broke below their 50-day MAs and also violated their multi-month uptrends, signaling a consolidation period is here. With that said, our intermediate-term outlook remains bullish (as of our 5/14/25 Compass), and we will maintain our bullish intermediate-term view as long as market dynamics remain constructive and the SPX is above 6200. Supports to watch on SPX include 6550, 6480-6520, 6450, 6400-6410, 6340-6360, 6290, and 6200. We expect the crucial 6480-6520 support to hold, so we would buy this pullback. With that said, a break below 6480 could mean a test of 6200 in short order. Short-term resistance is at the 20-day MA and 6870.

Deteriorating Market Dynamics. Additional deteriorating market dynamics which supported our near-term downgrade to neutral include: (1) Defensive Sectors including Health Care (XLV) and Utilities (XLU) are starting to outperform. (2) Bitcoin is breaking below long-term support at $98,000 (and we are no longer bullish long-term as of the break of $98,000). (3) The SPX, QQQ, and IWM have been moving sideways to lower during the typically very bullish flows (in years where the market shows strong gains YTD) during the November through January period -- while this has been a concern, the more SPX falls, particularly if in a capitulatory fashion, it could clear the way for a Santa Claus rally. These deteriorating dynamics were enough for us to take our foot off the gas near-term, but now we want to be buying... see page 3.
Actionable Industry ETFs: XBI, ARKG, CRAK, and SLX... see page 9.
EM and Int'l Markets. Stay at market weight and buy the pullback in MSCI EM (EEM). Remain underweight MSCI EAFE (EFA)... see page 10.