Vermilion Macro Vision: Sector Synopsis
STRATEGYWe continue to believe the market remains in bear market rally mode, and our price targets for this rally include the 200-day MAs on the S&P 500 and Russell 2000 (IWM). Longer-term, this is still a bear market until the S&P 500 and IWM can break above their respective YTD downtrends/200-day MAs, with the caveat being that markets could easily test their lows again. With that said, the signs that lead us to believe this bear market rally has more room to run could also be the same signs that lead to breakouts above YTD downtrends/200-day MAs and an end to the bear market. These positive signals or reasons to be near-term bullish include: (1) the U.S. dollar (DXY) broke its 2.5-month uptrend, is breaking below its 50-day MA, and has been making lower highs over the past month and a half – all signs it could be topping, (2) cyclical value Sectors including Industrials (XLI), Energy (XLE), equal-weighted Consumer Discretionary (RCD), and Financials (XLF) are all hitting 6+ mon
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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