Vermilion ETF Pathfinder: Actionable ETF research & Ideas
BIG PICTURE... see page 2Bullish and extended. The market's trajectory remains bullish. A variety of observations support this, ranging from leadership in cyclical sectors to improvements overseas. But as positive as the trend is, it is breaching extended territory. For instance, the S&P 500 is trading 8% above this moving average--the highest reading in nearly three years. A reason to sell? No. Instead, a reason to watch for a pullback opportunity to accumulate.
Small caps > large caps. Small caps continue to outperform. Mid-caps, too. This is a global trend--stick with it.
Value > growth. The value/growth ratio is working through a multi-month correction—blame energy, credit biotechs—but “big picture†trends still favor value.
U.S. SECTORS... see pages 3-5
Overweights: Energy (RYE), Financials (RYF), Industrials (RGI), Materials (RTM), and Tech (RYT). Of these, energy depicts a timely pullback opportunity.
Underweights: Consumer Staples (RHS), Health Care (RYH), Utilities (RYU). Their price patterns depict bottoms/stabilization, but relative strength continues to point south. Note: Health Care is on deck for an upgrade.
U.S. INDUSTRIES... see pages 6-9
Buy recommendations: Oil services (XES), junior gold miners (GDXJ), medical devices (IHI), and Social Media (SOCL).
INTERNATIONAL EQUITIES... see pages 10-12
Where are the bearish charts? Overseas technicals continue to improve. Both developed (EFA) and EM (VWO) are breaking out from bullish base patterns. Commodity countries are leading. In today's report we highlight breakouts in Brazil (EWZ) and Chinese H-shares (FXI)--both are buys.
BONDS, COMMODITIES, & CURRENCIES... see page 13
Commodity currencies are bottoming. Led by the Brazilian real (BZF), which is advancing to two-year highs, commodity currencies are working through cyclical bottoms, including the Australian and Canadian dollars (FXA, FXC).
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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.
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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