Vermilion ETF Pathfinder: Actionable ETF research & Ideas
S&P 500 Testing Short-Term SupportMarket dynamics remain positive and there continues to be an absence of breakdowns across the major indexes and all Sectors. As a result we remain bullish and recommend adding exposure on pullbacks.
· S&P 500 Levels. We see short-term support on the S&P 500 at 3630-3645. If this area fails to hold, the next important support levels to watch would be 3588 followed by 3550. As long as 3550 holds, we believe a bullish intermediate-term outlook is appropriate... see chart below.
· US Dollar, Commodities, 10-Year Treasury Yield, High Yield Spreads. The US dollar (DXY) broke below 92 support and remains weak. Broad commodities (DJP), crude oil (DBO), and base metals (DBB) remain in uptrends. The 10-year yield remains in a 4-month uptrend. High yield spreads have been narrowing since March. As long as there are no reversals in these trends we see them as risk-on signals for the broad equity market... see page 2.
· Cyclicals Over Defensives, Small-Caps Over Large-Caps. Cyclicals remain leadership while defensives continue to lag. Small-caps remain leadership relative to large-caps. These are two important risk-on signals from the equity market and are exactly what we would expect to see in a broad-based bull market
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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