Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Cyclicals at a critical junctureOur general outlook remains positive and unchanged on U.S. and foreign equities, however there are a number of concerns that still exist -- particularly as it relates to some key cyclical areas of the market. If the concerns highlighted below are eventually alleviated, we believe a more bullish outlook would be warranted.
• Concern #1: Several cyclical areas of the market remain below resistance, including Financials (both in the U.S. and Europe - XLF, EUFN), Consumer Discretionary/retail (RCD, XRT), Transportation (XTN, IYT), and small-caps (IWM). Breakouts would go a long way in supporting a more bullish outlook... see page 2.
• Concern #2: WTI crude oil prices may be running into resistance at $65. Considering the high correlation between crude oil and stock prices, an inability for WTI to get above $65 could be problematic for equities... see chart below.
• Concern #3: The U.S. dollar is forming an ascending triangle pattern which traditionally resolves to the upside more often than not. As we have noted previously, we believe a breakout in the USD could create a headwind for global equities - especially EM - and problems in EM ultimately are not a good sign for domestic markets... see page 3.
• Concern #4: Interest rates have stabilized, but if bond market volatility meaningfully picks up again - in either direction - it may upset the equity market... see page 3.
• Actionable Industry ETFs: ITB, IHI, IYZ, and XOP... see page 10.
• EM and Int'l: EM (EEM, VWO) and developed int'l (EFA, VEA) ETFs continue to show signs of bottoming, and the latter is breaking above key resistance... see page 11.
• Actionable int'l ETFs: MCHI, ICOL, EWI, EWH, ENZL, EWK, EWL, and HEDJ... see pages 12-13.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.