EUR 217.56 For Business Accounts Only

Vermilion ETF Pathfinder: Actionable ETF research & Ideas

Global equities consolidating

• Long-term bullish, near-term consolidation. While we retain our long-term bullish outlook, we expect to see a continued period of heightened volatility marked by backing and filling. This includes the possibility of retesting the previous low, which we would view as a healthy action within the context of the market's longer-term bullish advance. We believe this would be the healthiest and most likely move for the market, as opposed to more indiscriminate selling that could lead to new lows, or blind-eyed bullishness that could lead to new highs. With global equity markets taking cues from the U.S., we look to the S&P 500 for guidance, viewing the recent high of ~2,873 as the top-end of the range, and the recent low of ~2,532 as the bottom-end. For the SPY this equates to ~287 on the top-end, and ~253 on the bottom-end. We believe a decisive move above or below these respective levels will signal the market's next move... see chart below

• Monitor 3.00% on the 10-year Treasury. A potential catalyst that could cause equity markets to retest (or move below) the recent lows is a sustained advance above 3.00% on the 10-Year yield. This is an important level to monitor.

• Big picture trends: Overweight recommendations: large over small-caps; growth over value; U.S. over international; commodities; metals and mining stocks... see pages 2-3

• Sector overweights: Financials (XLF): Super-regional and investment banking stocks are leading... see page 4. Technology (XLK): Network security stocks appear poised for continued outperformance... see page 4. Materials (XLB): Metals and mining stocks are outperforming... see page 5. Industrials (XLI): Railroad and trucking stocks are attractive... see page 5

• Actionable Industry ETFs: IAI, BJK, KOL, and CIBR... see page 9

• Actionable Int'l ETFs: EWQ, EWN, EWY, ECH, MCHI, EWZ, EZA, and THD... see pages 11-12