Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Market Indexes, U.S. Dollar (DXY), 10-Yr Treasury Yield at Key Inflection PointsOur expectation for 2023 has been for 4100-4165 to cap upside on the S&P 500, and we are extending that ever-so-slightly to 4165-4200. We have been preaching caution with the indexes testing resistance, and we are starting to see early signs that suggest they could be turning lower, with the S&P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM) breaking their YTD uptrends alongside bullish inflections in Treasury yields and the U.S. dollar. To confirm a meaningful pullback has begun, we would need to see QQQ break below $297 and IWM break below $190. Potential supports we are watching for on the S&P 500 include 4060, 3900-4000, 3765, and 3490.
Big Picture Trends. Downtrend reversals in Treasury yields and the U.S. dollar (DXY), bullish short-term RS reversals for defensive Sectors (Staples and Utilities), and short-term uptrend violations on the market indexes at major resistance all lead us to believe to equity market indexes are headed lower near-term. 10-Yr Treasury yield is testing 3.9%. Broad commodities (DJP) are testing key support at $32 while WTI crude oil consolidates below $82 resistance... see page 2.
Downgrading Energy to Market Weight. We are downgrading Energy to market weight due to 1+ year RS uptrend breaks on the cap- and equal-weighted Sector ETFs (XLE, RYE) -- reduce exposure... see page 6.
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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