Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Testing 1-month resistanceAll of the major averages (S&P 500, Nasdaq, and Dow) are testing key 1-month resistance levels. This test of short-term resistance comes despite new developments which continue to be of the negative variety, making it a logical area for the market to retreat. As a result, we remain cautious with an overall neutral outlook.
• Negative developments continue. Copper exhibits signs of breaking down below the key $2.54-2.55 level, the small- vs. large-cap ratio (IJR/SPY) is hitting fresh lows after an attempted bottom, and Utilities (XLU) notched a new YTD RS high last week. All of this is consistent with an unhealthy equity market landscape, and is consistent with a market that is likely to struggle for gains moving forward... see page 2.
• Commodities. Continue to favor precious metals (GLD, SLV, PPLT) within the commodity structure. WTI crude oil (DBO) remains a laggard and we are concerned that there may be a breakdown in light of its descending triangle pattern... see page 3.
• Actionable Industry ETFs: SIL, IHI, ITA, and ITB... see page 10.
• EM and Int'l: Developed (EFA) and EM (EEM, VWO) ETFs are making lower highs and lower lows, something we continue to see as concerning for foreign and U.S. equity markets alike. Remain underweight... see page 11.
• Actionable Int'l ETFs: EWN, EWC, ERUS, RSXJ, EWT, and EWZS... 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.
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