Vermilion Int'l Compass: Global Equity Strategy
Europe Next to Break Out?We 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 $119-$121. We discussed in our July 31, 2025 Int'l Compass how $128, $125-$126, and $123-$123.50 were short-term supports to watch on ACWI-US, and ACWI-US found support at $128 the next day. These all remain key levels to watch, and with ACWI-US breaking out to new highs we would add $132 as a new support to watch as well. All signs point to the ACWI-US uptrend continuing for the foreseeable future.
Remain Overweight South Korea, Greece, and the U.S.; Japan and China Remain Attractive; Europe Next to Break Out? Korea (KOSPI), Greece (ATHEX Composite), and the U.S. (S&P 500) remain our three official overweights. With that said, China (Shanghai Composite) has been a major focus since our July 3 Int'l Compass titled "China and Japan Breaking Out" and also in our July 22 Int'l Macro Vision. RS on the Shanghai Composite is bullishly inflecting, and we are monitoring for an upgrade to overweight. Japan's TOPIX and TOPIX Small indexes also remain bullish, and RS is currently testing multi-month resistances; we would upgrade Japan to overweight on RS breakouts. The EURO STOXX 50 has been building a base for six months and we believe Europe is likely the next country to break out... see chart below and page 2.
Emerging Markets Overview. We remain bullish on MSCI Emerging Markets (EEM-US) as long as it remains above $46 base support, though $48 is another important support level. Ever since our July 3 Int'l Compass, China has been our favorite country to be buying now, though Korea, Greece, and Taiwan (Technology) remain attractive as well.
Actionable Themes: Technology, Services, Communications, and Consumer Discretionary. We highlight attractive names within these Sectors, with the vast majority of names hailing from Japan, China/Hong Kong, and Taiwan... see pages 3-20.
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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