Report
Dave Nicoski ...
  • Ross LaDuke
EUR 41.72 For Business Accounts Only

Vermilion Compass: Weekly Equity Strategy

Chop Continues; Nasdaq 100 Testing Major Resistance

We maintain our near-term bullish outlook on the S&P 500 (SPX), Nasdaq 100 (QQQ), and Russell 2000 (IWM), which has remained in place since 4/22/25, aside from one week (11/19/25-11/25/25) when we went to neutral. We will stay near-term bullish as long as crucial support levels of 6824 on SPX, $610 on QQQ, and $245 on IWM continue to hold. We see mild deterioration in market dynamics, which may provide a near-term headwind; still, MAG7 earnings and Wednesday's Fed meeting are in the driver's seat, and we are watching for a breakout on QQQ. Our intermediate-term bullish outlook has been in place since our 5/14/25 Compass. We will maintain our bullish intermediate-term outlook, and recommend buying pullbacks, as long as market dynamics remain constructive and the SPX is above 6480-6520. SPX supports include 6824, 6720-6770, 6690, 6480-6520, 6450, 6400-6410, and 6340-6360.

Chop Continues; Nasdaq 100 Testing Major Resistance. As discussed in last week's Compass, the good certainly still outweighs the bad. Still, there are reasons to expect the current choppy consolidation period to continue. Just as weakness came into IWM and other leading themes in recent days, the MAG7 has picked up the slack, lifting the QQQ and SPX. MAG7 earnings this week will likely provide direction in the near-term. One positive development is that the SPX entirely filled that gap from last Tuesday at 6910-6940, suggesting more SPX consolidation at worst, and a potential breakout above 7000 at best. Other minor concerns remain in place, which suggests more choppy consolidation is likely, including: (1) The 10-year Treasury yield is above the 4.20% level (though testing now as support). (2) Consumer Staples (XLP) remain near 4-month RS highs. (3) The QQQ has been unable to break above $630, and ARKK has been unable to break above $84 (both crucial resistances, and breakouts would be very bullish buy signals for them). (4) Speculative leaders are starting to wobble at the highs (WGMI, ARKX, ARKQ, URA, NLR, XME) while pure quantum names (IONQ, RGTI, QUBT, QBTS, BTQ) are particularly weak. (5) Bitcoin remains long-term bearish. (6) Last Thursday's price action on IWM displays a bearish island reversal candlestick, good for a potential local top. (7) Financials (XLF) display a failed breakout at $54.50. (8) WTI crude oil is bottoming... see chart below and pages 2-3.
Market Dynamics Remain Risk-On. Pullbacks remain buying opportunities, and we still expect prices to ultimately resolve higher, considering: (1) High yield spreads are at 18+ year narrows. (2) The 10-year Treasury yield has not been able to break above 4.35%, 4.50%, or 4.70%-4.80%. (3) The small-cap Russell 2000 (IWM) remains extremely bullish above $245. (4) The U.S. dollar (DXY) remains below $100.25-$100.80. (5) U.S. interest rate volatility (MOVE index) is at fresh 4+ year lows. (6) Semiconductors (SMH, SOXX) remain leadership. (7) Gold and silver remain bullish despite local top potential... see pages 3-4.
Underlyings
BORR DRILLING LTD

Bristow Group Inc

Ero Copper

Ero Copper Corp is a Canada-based company focused on copper production from the Vale do Curaca Property that is located in Bahia, Brazil. The Company's primary asset is a Brazilian copper mining company, Mineracao Caraba S.A. (MCSA), owner of the Vale do Curaca Property. The Company mines copper ore from the Pilar underground mine, the Surubim open pit mine and its newly constructed Vermelhos underground mine. In addition to the Vale do Curaca Property, the Company owns the Boa Esperanca development project, an Iron oxide copper gold ore deposits (IOCG)-type copper project located in Para Brazil. Integrated operations of the Company's mining complex include underground and open pit mining activities, a conventional three-stage crush and flotation mill and supporting infrastructure required to produce a clean concentrate grading 35% copper.

Freeport-McMoRan Inc.

Freeport-McMoRan is a holding company. Through its subsidiaries, the company is a mining company. The company operates assets with proven and probable reserves of copper, gold and molybdenum, and the company is a publicly traded copper producer. The company's portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits; and mining operations in North America and South America, including the Morenci minerals district in Arizona and the Cerro Verde operation in Peru. The company has organized its mining operations into four primary divisions: North America copper mines, South America mining, Indonesia mining and Molybdenum mines.

Helix Energy Solutions Group Inc.

Helix Energy Solutions Group is an international offshore energy services company that provides specialty services to the offshore energy industry. The company has three business segments: well intervention, which includes vessels and equipment used to perform well intervention services primarily in the U.S. Gulf of Mexico, Brazil, the North Sea and West Africa; robotics, which includes remotely operated vehicles (ROVs), trenchers and ROVDrills designed to complement offshore construction and well intervention services; and production facilities, which includes the Helix Producer I, a floating production vessel, the Helix Fast Response System, and its ownership interest in Independence Hub, LLC.

INNOVEX INTERNATIONAL INC

Lundin Mining Corporation

Lundin Mining is a holding company. Through its subsidiaries, Co. is engaged in the exploration for minerals and the production of base metals, with a focus on zinc.

NOBLE CORP (NEW)

Oceaneering International Inc.

Oceaneering International is a provider of engineered services and products, primarily to the offshore oil and gas industry. The company's segments are: Energy Services and Products; and Advanced Technologies. The company's business segments within the Energy Services and Products business are remotely operated vehicles, subsea products, subsea projects and asset integrity. The company's Advanced Technologies segment consists of government; and commercial business units: Government services and products include engineering and related manufacturing in defense and space exploration activities. The company's commercial business unit provides a turnkey solution that includes program management, and engineering design.

Oil States International Inc.

Oil States International, through its subsidiaries, is an oilfield products and services company serving the drilling, completion, subsea, production and infrastructure sectors of the oil and gas industry. The company is also a provider of completion services to the industry. The company operates through three segments: well site services, whose operations primarily include completion-focused equipment and services as well as land drilling services; downhole technologies, which provides oil and gas perforation systems and downhole tools; and offshore/manufactured products, which designs, manufactures and markets capital equipment utilized on floating production systems, among others.

SEADRILL LTD

Southern Copper Corporation

Southern Copper is a copper producer. The company's mining, smelting and refining facilities are located in Peru and Mexico and the company conducts exploration activities in those countries and in Argentina, Chile and Ecuador. The company's Peruvian copper operations involve mining, milling and flotation of copper ore to produce copper concentrates and molybdenum concentrates, the smelting of copper concentrates to produce blister and anode copper, and the refining of anode copper to produce copper cathodes. The company's Mexican operations are conducted through its subsidiary, Minera Mexico, S.A. de C.V., which engages primarily in the mining and processing of copper, molybdenum, zinc, silver, gold and lead.

Subsea 7 S.A. ADS

TechnipFMC Plc

TechnipFMC is global leader in oil and gas projects, technologies, systems, and services. Co. offers subsea, surface, onshore, and offshore solutions for oil and gas projects. Co. serves customers worldwide. With Co.'s technologies and production systems, integrated expertise, and comprehensive solutions, Co. is transforming Co.'s clients' project economics. Co. is uniquely positioned to deliver greater efficiency across project lifecycles from concept to project delivery and beyond. Through innovative technologies and improved efficiencies, Co.'s offering unlocks new possibilities for Co.'s clients in developing their oil and gas resources.

Teck Resources Limited Class B

Teck Resources is engaged in mining and related activities including exploration, development, processing, smelting and refining. Co.'s major products are steelmaking coal, copper and zinc. Co. also produces precious metals, lead, molybdenum, electrical power, fertilizers and other metals. Co. also owns an interest in certain oil sands leases and have partnership interests in an oil sands development project and wind power project.

Thermo Fisher Scientific Inc.

Thermo Fisher Scientific is engaged in serving science. The company's segments include: Life Sciences Solutions, which provides reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of disease; Analytical Instruments, which provides instruments, consumables, software and services that are used for a range of applications in the laboratory, on the production line and in the field; and Specialty Diagnostics, which provides diagnostic test kits, reagents, culture media, instruments and associated products for customers in healthcare, clinical, pharmaceutical, industrial, and food safety laboratories.

Tidewater Inc

Tidewater provides offshore marine support and transportation services to the global offshore energy industry through the operation of a fleet of marine service vessels. The company's vessels and associated vessel services provide support of several phases of offshore oil and natural gas exploration, field development and production. These services include towing of, and anchor handling for, mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover and production activities; offshore construction and seismic and subsea support; and a variety of services such as pipe and cable laying.

Transocean Ltd.

VALARIS LTD

Provider
Vermilion Research
Vermilion Research

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.

Analysts
Dave Nicoski

Ross LaDuke

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