Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Bullish Developments Continue; Downgrading CommunicationsBullish developments continue to flood the market, leading us to believe we may be in the early stages of a broad-based advance.
• Bullish Arguments Flooding the Market. Major global and US indexes (SPY, RSP, QQQ, EEM, EFA, EUFN, ACWI, Europe, Japan, etc.) are making bullish inflections. Serial laggards such as retail (XRT) and biotech (IBB, XBI) appear to be bottoming. Cyclical Sectors are breaking topside resistance (e.g., XLK, XLF, XLI). Broad commodities (DJP) appear to be bottoming. All of these developments are consistent with bull markets... see charts below and page 2.
• What would help give us more confidence? It would be considerably easier to label this a bull market if we get: (1) price breakouts in Transports (XTN) and small-caps (IWM), (2) bullish inflections in Banks (KBE) and Metals & Mining (XME), and (3) outperformance from small-caps (IWM vs. SPY)... see page 3.
• Communications (XLC). We are downgrading Communications to market weight as RS settles into a horizontal range... see Sector comments on page 7.
• Actionable Industry ETFs: IBB, XBI, XPH, and XSD... see page 9.
• EM and Int'l: Developed international (EFA) and EM (EEM) equities are bullishly inflecting, making now a great time to add exposure... 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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