Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Add Exposure to Emerging Markets, RetailSeveral recent positive developments are encouraging and incrementally improve our outlook, however there are several other items on our bull market wish list that have yet to be checked off. Our outlook remains neutral.
• EM, Retail Bottoming. Bullish price and RS reversals in EM (EEM) is a very positive signal for the broad market as it indicates improving risk appetites. After all, it is one of the riskiest asset classes. Bottoming price and RS in Retail (XRT) is also a very positive signal as it shows the consumer is alive and well... see charts below.
• Big Picture Trends. The US dollar is weakening, the cyclical vs. staple ratio is bullishly inflecting, the small vs large-cap ratio has held at support, and the growth vs. value ratio remains in favor of growth... see page 2.
• Cyclical Sectors are consolidating. A consistent theme we see as we analyze each Sector is that all cyclical Sectors (i.e., all except Utilities, Staples, and Real Estate) are consolidating and are below logical resistance. We will need to see breakouts from these cyclical Sectors in order for there to be a chance at a broad market advance... see Sector comments on pages 3-8.
• Actionable Industry ETFs: XRT, RTH, PJP, and EUFN... see page 9.
• EM and Int'l: Developed international (EFA) and EM (EEM) equities are making bullish price and RS inflections, a positive development for global equities... see page 10.
• Actionable Int'l ETFs: EWJ, EWN, EWG, EWGS, EWT, and ERUS... see page 11.
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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