Vermilion ETF Pathfinder: Actionable ETF research & Ideas
Bullish Outlook Warranted; Offensive Sector ShiftIn our 5/18/20 ETF Pathfinder we saw the S&P 500 as consolidating and, until there was a resolution below support or above resistance, our outlook was neutral. By the end of that week, the S&P 500 had sustained a break above 2,935-2,955 resistance which set the stage for a new leg higher. Despite being short-term extended, the combination of rotations into cyclical Sectors, bottoming interest rates, narrowing high yield spreads, small- and mid-caps outperforming, commodities bottoming, and US dollar weakness leads us to believe a bullish outlook is warranted and that pullbacks should be bought.
· Nasdaq 100, Value vs. Growth, Commodities, US Dollar. The Nasdaq 100 (QQQ) is breaking out to new highs and as long as it is above the 20-day MA a bullish stance is appropriate. The value vs. growth ratio (IWD vs. IWF) shows a major reversal in favor of value. Broad commodities (DJP) are breaking out as the US dollar breaks down... see chart below and page 2.
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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