Vermilion Int'l Compass: Global Equity Strategy
Europe Breaking Out From 7-Month Base -- BuyWe remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int'l Compass reports all echoing this sentiment. We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $125-$126 (up from $123-$123.50). Our bullish near-term outlook will remain in place as long as the 4+ month uptrend continues on ACWI-US. Short-term supports to watch on ACWI-US include the 4+ month uptrend (currently at $135-$136), $134-$134.50, $131.50-$132, $130, $128, and $125-$126. Market dynamics remain overwhelmingly risk-on; remain aggressively long as we continue to expect more upside into year-end and the early part of 2026.
Remain Overweight Taiwan, China, Korea, and the U.S. We officially downgraded Greece (ATHEX Composite) to market weight in our 9/29/25 EM Strategy due to RS deterioration. Our remaining four country overweights include Taiwan (TAIEX), China (Shanghai Composite), Korea (KOSPI), and the U.S. (S&P 500). Most of our top ideas are within these countries. Europe's EURO STOXX 50 is breaking out from its 7-month base, above the crucial 5500 level, and RS is attempting to reverse its 5-month downtrend -- buy. On the other hand, Japan's TOPIX and TOPIX Small indexes are violating their 20-day MAs for the first time since late-April, signaling a consolidation period is underway in Japan... see chart below and page 2.
Emerging Markets Overview. We remain bullish on EM with the 5-month uptrend intact on MSCI Emerging Markets (EEM-US). We expect support at the uptrend and 50-day MA, and also $50.65 horizontal support. Taiwan, China, and Korea remain our favorite EM countries to be buying/overweight. In terms of Sectors, MSCI EM Technology, Communications, Materials, and Consumer Discretionary are our four favorites to be buying/overweight.
Actionable Themes: Consumer Discretionary, Materials, and Technology. Cyclical growth Sectors remain global leadership, while mining/metals/minerals names also remain leadership within Materials. China remains a major focus... see pages 3-31.
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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