Vermilion Compass: Weekly Equity Strategy
Bullish Breadth Divergences PersistThe S&P 500 is just below 4165-4200 support, and the Nasdaq 100 (QQQ) is just below $350-$355 support. Given they were only 1%-1.5% below these supports at last week's lows, we cannot call them "decisive" breakdowns quite yet. Regardless, these levels are now resistance (in addition to the 200-day MA on SPX), and they are important lines-in-the-sand moving forward. We cannot be bullish if the SPX and QQQ are below the aforementioned levels, but it would be bullish if these levels are reclaimed, since that would indicate false breakdowns. Meanwhile, the Russell 2000 (IWM) is testing 1.5-year support at $162-$163, making this a logical spot for small-caps to bounce... see page 3.
Bullish Breadth Divergences Persist. In our 10/17/23 Compass we started discussing signs of improving breadth, and we continue to see signs that breadth is possibly bottoming-out. Both the S&P 500 and Russell 2000 and the % of stocks above their 50-day and 20-day MAs continue to display bullish breadth divergences. Add to it the fact that the Russell 2000 is testing 1.5-year support at 1640, and we continue to believe the risk/reward favors buyers here... see charts below.
Prior Risk-On Signals Becoming Risk-Off Signals. The Dow Jones Internet index (FDN) broke below the critical $155 line-in-the-sand; if FDN is below $155 it is a clear risk-off signal. Additionally, GOOGL joined TSLA as two of the "magnificent seven" names that have broken key supports (though the other five remain above supports)... see page 4.
Big Picture Trends. The U.S. dollar (DXY) remains above $105.70; this is problematic for global equities, though a break below $105.70 on the DXY would be very bullish for global equities. Broad commodities (DJP), WTI crude oil, and gasoline prices (UGA) display sideways consolidation. 1- and 2-year Treasury yields remain below resistance at 5.5% and 5.1%-5.2%, which we view as a constructive sign for the broad equity market. RS for defensive Sectors Utilities and Staples remains below their September highs, still providing a risk-on signal. Overall, market dynamics still lean neutral to bullish... see page 5.
Eldorado Gold is engaged in the exploration, development, mining and production of gold and other mining resources in Brazil, China, Turkey and Greece.
IAMGold is engaged in the exploration for, development and operation of gold mining properties, and the operation of a niobium mine.
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
Laureate Education is engaged in providing higher education programs and services to students through an international network of licensed universities and higher education institutions (institutions). The company's programs are provided through institutions that are campus-based and internet-based, or through electronically distributed educational programs. The company has five reportable segments: Brazil; Mexico; Andean; Rest of World; and Online and Partnerships. The company's Online and Partnerships segment principally consists of Walden University.
Lincoln Educational Services provides post-secondary education to high school graduates and working adults. The company provides programs in automotive technology, skilled trades, which include heating, ventilating and air conditioning, welding and computerized numerical control and electronic systems technology, among other programs; healthcare services, which include nursing, dental assistant, medical administrative assistant, among other programs; hospitality services, which include culinary, therapeutic massage, cosmetology and aesthetics; and information technology, which consists of information technology programs.
New Gold is a gold producer engaged in gold mining and related activities including acquisition, exploration, extraction, processing and reclamation.
Overseas Shipholding Group is a holding company. Through its subsidiaries, the company owns and operates a fleet of oceangoing vessels engaged in the transportation of crude oil and petroleum products in the U.S. Flag trades. The company has one reportable business segment. The company's U.S. Flag Fleet consists of various owned and chartered-in Jones Act Handysize Product Carriers and Articulated Tug Barges and non-Jones Act U.S. Flag Handysize Product Carriers that participate in the U.S. Maritime Security Program. Under the Jones Act, shipping between U.S. ports, including the movement of Alaskan crude oil to U.S. ports, is reserved for U.S. Flag vessels.
Career Education's academic institutions provide education to students in a variety of disciplines through online, campus-based and blended learning programs. The company's reporting segments are: Colorado Technical University, which provides industry-relevant degree programs and academic programs in the career-oriented disciplines of business studies, nursing, computer science, engineering, information systems and technology, cybersecurity and healthcare management; and American InterContinental University, which helps personnel get the degree and provides academic programs in the career-oriented disciplines of business studies, information technologies, education and criminal justice.
Strategic Education is an education services company. The company provides campus-based and online post-secondary education offerings through two subsidiaries, Strayer University and Capella University. Strayer University provides undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, nursing, public administration, and criminal justice at physical campuses, primarily located in the eastern U.S., and online. Capella University is an online post-secondary education company that provides a variety of bachelor's, master's and doctoral degree programs primarily delivered to working adults.
Universal Technical Institute is a provider of postsecondary education for students seeking careers as automotive, diesel, collision repair, motorcycle and marine technicians as well as welders and computer numeric control machining technicians. The company provides certificate, diploma or degree programs under the banner of several brands, including Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute and NASCAR Technical Institute. Additionally, the company provides manufacturer specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer sponsored training at certain campuses and training centers.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.