Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Upgrading Real Estate and Utilities to overweightThe S&P 500 peaked near 2,817 resistance following the Trump-Xi meeting at the G20 summit, and is now hovering near the critical 2,600 support level. Our baseline expectation is for continued consolidation between these support and resistance levels. The ultimate breakout or breakdown will be key in determining where the market goes longer term. Meanwhile, barring meaningful clarity on the U.S.-China trade front or Fed policy, the market remains vulnerable to a breakdown.
• Overweight large-caps. We are shifting from market cap neutral to overweight large-caps with the large- vs. small-cap ratio breaking out to new highs. This also paints a picture of a risk-off environment, supporting our cautious outlook... see chart below (bottom clip).
• Big picture trends: Despite continued USD (UUP) strength, gold (GLD, IAU) is bottoming from both a price and RS perspective (relative to the S&P 500). Banks (KBE, KRE) are breaking down to new price and RS lows, helping support our cautious market outlook... see page 2.
• Sector rating changes: We are upgrading Real Estate (XLRE) and Utilities (XLU) to overweight. Continued RS improvements from these defensive Sectors - Health Care (XLV) and Staples (XLP) included - adds to our overall cautious outlook... see pages 3 and 4 for more on our Sector overweights.
• Actionable Industry ETFs: XHS, IHF, PPH, and REZ... see page 9.
• EM and Int'l. We are shifting to overweight EM relative to ACWI due to bottoming RS for broad EM ETFs (EEM, VWO). On the other hand, stay underweight developed int'l ETFs (EFA, VEA) which remain in price and RS downtrends... see page 10.
• Actionable Int'l ETFs. MCHI, EIDO, QAT, and TUR... 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.
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.