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Vermilion ETF Pathfinder: Actionable ETF research & Ideas

S&P 500 Testing Support Amid Uncertainties

Short-term support levels have been violated on the S&P 500, Nasdaq 100, and Russell 2000 due to uncertainties surrounding rising COVID-19 cases/potential stay-at-home orders, and ongoing uncertainty surrounding new stimulus and the election outcome. While we remain constructive over the intermediate-term, short-term breakdowns have shifted our near-term outlook to a more neutral stance.

· Key S&P 500 Levels. We believe caution is warranted following recent short-term breakdowns. Important support levels on the S&P 500 include 3200-3230 followed by 3130 which is also the 200-day MA. We are constructive as long as there is no decisive break below 3130. On the other hand, a break below 3130 would signal a bearish trend change... see chart below.

· Big Picture Trends. High yield spreads remain fairly benign. The 10-year Treasury yield shows signs of a potential bottom. The US dollar index (DXY) remains below 95 resistance. We view all of this as positive for equities. Additionally, the Russell 1000 value vs. growth ratio shows signs of bottoming... see page 2.

· Actionable Industry ETFs: XSD, KRE, IHI, and XHS... see page 9.

· EM and Int'l Markets: On one hand, EM (EEM) is hitting multi-month RS highs, a sign of strong risk appetites. On the other hand, developed int'l (EFA) is breaking below $61.50-$62 support -- a concerning development... see page 10.

· Actionable Int'l ETFs: EWT, MCHI, KWEB, EWY, EWJ, and ENZL..