Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Cautious outlook intactWe continue expect additional consolidation, volatility, and potentially lower prices as the market attempts to stabilize. Important levels we are monitoring on the S&P 500 include support near 2,600 and resistance near 2,817 - which currently coincides with both the 100-day and 50-day moving averages.
• Big picture trends. The growth (IUSG) vs. value (IUSV) uptrend is breaking down in favor of value -- shift exposure from growth to value. The large-cap (IVV) vs. small-cap (IJR) ratio is similarly inflecting in favor of small-caps -- we are shifting to market cap neutral. Reinforcing our cautious outlook, the equal-weight cyclicals (RCD) vs. staples (RHS) ratio remains weak as staples remain in control... see page 2.
• Commodities and the U.S. dollar. The path of least resistance remains higher for the USD (UUP) as investors continue to flock to safety. Crude oil (DBO, BNO) prices have broken down, meanwhile gold (GLD, IAU) and base metals (DBB) are working through potential bottoming processes... see page 3.
• Sector overweights: Technology (XLK), Health Care (XLV), and Consumer Staples (XLP)... see pages 4-5.
• Actionable Industry ETFs: IHF, XHS, IBB, and FCOM... see page 10.
• Int'l and EM. Despite both broad EM (EEM, VWO) and developed int'l (EFA) remaining in price downtrends, RS is attempting to bottom (more so for EM), suggesting a potential positive shift in risk appetites... see page 11.
• Actionable Int'l ETFs. QAT, EWZ, EIDO, and EIS... see page 12.
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.
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