Vermilion Macro Vision: Sector Synopsis
STRATEGYSince September 2023 we have consistently made the case that so-called “bad breadth” is a flimsy argument, and that it alone is not a reason to be bearish on the S&P 500 and Nasdaq 100. Our reasoning has been that weak breadth is not uncommon at major market bottoms as buyers favor quality names and avoid speculative ones – there were five major bottoms that had these characteristics from 1933 to 1984. Case in point today: suddenly, breadth is expanding significantly – much like it did in late-October/early-November 2023 – and anyone that has used “bad breadth” as a reason to not be fully invested now has to look at the S&P 500, Nasdaq 100, and Russell 2000 indexes that are up 37%, 46%, and 35%, respectively, from the October 2023 lows. Now, we are beginning to see some signs of Sector rotation as areas that have lagged are starting to play catch-up. To that end, we see several major bullish developments, including the Russell 2000 (IWM) and large-cap biotech (IBB) breaking a
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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