Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We see the S&amp;P 500 as trading within a downtrend channel; as long as it remains within this channel, our intermediate to long-term outlook is bearish at the index level.</li>
<li>With that said, the S&amp;P 500 is currently testing support within the downtrend channel, and we are on watch for a potential bear market rally.</li>
<li>We will need to see a bullish reversal of the 1-month downtrend (currently at 4030-4050) to have confidence that a tradeable bounce is underway, with the potential for more.</li>
</ul>


We see the S&amp;P 500 as trading within a downtrend channel; as long as it remains within this channel, our intermediate to long-term outlook is bearish at the index level.
With that said, the S&amp;P 500 is currently testing support within the downtrend channel, and we are on watch for a potential bear market rally.
We will need to see a bullish reversal of the 1-month downtrend (currently at 4030-4050) to have confidence that a tradeable bounce is underway, with the potential for more.


S&P 500 Downtrend Channel Intact & Testing Support; Buy Ideas Within Energy & Biotech

<ul>
<li>Our outlook remains bearish at the index level as downtrends remain intact on the MSCI broad global indexes and also within Japan, Hong Kong, Europe, Germany, and China.</li>
<li>Our preferred Sector overweights continue to be defensives (Utilities, Staples, and Health Care) and commodity Sectors (Energy and Materials).</li>
<li>The secular bull market in commodities (Bloomberg Commodity index, WTI and Brent crude oil, etc.) remains intact, which continues to support our overweight recommendations on the Energy and Materials Sectors.</li>
</ul>


Our outlook remains bearish at the index level as downtrends remain intact on the MSCI broad global indexes and also within Japan, Hong Kong, Europe, Germany, and China.
Our preferred Sector overweights continue to be defensives (Utilities, Staples, and Health Care) and commodity Sectors (Energy and Materials).
The secular bull market in commodities (Bloomberg Commodity index, WTI and Brent crude oil, etc.) remains intact, which continues to support our overweight recommendations on the Energy and Materials Sectors.


Still Bearish at the Index Level; Remain Overweight Defensives & Commodity Sectors

iShares Russell 1000 Value ETF / Technical Analysis

<ul>
<li>We have warned over the past month that a test of the lows, and possibly a break to new lows, is increasingly likely on the SPX, NDX, and Russell 2000.</li>
<li>We recently hit marginal new lows; while the indexes and our outlook remains neutral to bearish, we believe there is potential for an oversold bounce</li>
<li>Still, we will need to see the NYSE have back-to-back 80%+ upside volume days or one 90%+ upside volume day to have confidence that a major bottom is in place.</li>
</ul>


We have warned over the past month that a test of the lows, and possibly a break to new lows, is increasingly likely on the SPX, NDX, and Russell 2000.
We recently hit marginal new lows; while the indexes and our outlook remains neutral to bearish, we believe there is potential for an oversold bounce
Still, we will need to see the NYSE have back-to-back 80%+ upside volume days or one 90%+ upside volume day to have confidence that a major bottom is in place.


Fed Set to Hike 50 Bps As Indexes Test Support; Energy Stocks to Buy on Pullbacks

US Treasury (10 Yr Generic) / Technical Analysis

<ul>
<li>We have discussed our expectations for rising rates for quite some time, but the 10-year yield is now testing 40-year downtrend resistance which comes in at 2.80-2.82%.</li>
<li>If there was ever a time for interest rates to move lower, this is where it needs to happen -- and it would be fitting, considering extremely bearish bond sentiment.</li>
<li>On the other hand, if the 10-year Treasury is above 2.82% we see a secular reversal where rising rates would be the new normal</li>
</ul>


We have discussed our expectations for rising rates for quite some time, but the 10-year yield is now testing 40-year downtrend resistance which comes in at 2.80-2.82%.
If there was ever a time for interest rates to move lower, this is where it needs to happen -- and it would be fitting, considering extremely bearish bond sentiment.
On the other hand, if the 10-year Treasury is above 2.82% we see a secular reversal where rising rates would be the new normal


10-Year Treasury Yield Testing 40-Year Resistance; Upgrading Health Care to Overweight

<ul>
<li>Global equity indexes have staged impressive rallies from oversold levels, and certain hard-hit areas in Europe (STOXX600 Technology, Industrial Goods &amp; Services, and Chemicals Sectors) display bullish short-term price reversals.</li>
<li>We view this as a <em>potential</em> signal that the lows may have been established for this correction, but we need to see more upside follow-through.</li>
<li>Regardless, we want to stick with Sectors and stocks that have remained technically attractive throughout this pullback, <em>not</em> on areas that are just now spiking from oversold levels within downtrends.</li>
</ul>


Global equity indexes have staged impressive rallies from oversold levels, and certain hard-hit areas in Europe (STOXX600 Technology, Industrial Goods &amp; Services, and Chemicals Sectors) display bullish short-term price reversals.
We view this as a potential signal that the lows may have been established for this correction, but we need to see more upside follow-through.
Regardless, we want to stick with Sectors and stocks that have remained technically attractive throughout this pullback, not on areas that are just now spiking from oversold levels within downtrends.


Value Remains Leadership; Actionable Ideas: Energy, Financials, Industrials, and Materials

Canada

Canadian Natural Resources Ltd. acquires, explores for, develops, and produces natural gas, crude oil, and related products.  The Company operates in the Canadian provinces of Alberta, northeastern British Columbia and Saskatchewan. Canadian Natural also operates in areas which have access for exploration activities and where pipeline systems already exist.

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Canadian Natural Resources (CNQ CN)

S&P 500 Downtrend Channel Intact & Testing Support; Buy Ideas Within Energy & Biotech

The $SPX is trading within a downtrend channel; as long as it remains within this channel, our intermediate to long-term outlook is bearish at the...

Vermilion Research

Still Bearish at the Index Level; Remain Overweight Defensives & Commodity Sectors

Our outlook remains bearish at the index level as downtrends remain intact on the MSCI broad global indexes and also within Japan, Hong Kong,...

Vermilion Research

Fed Set to Hike 50 Bps As Indexes Test Support; Energy Stocks to Buy on Pullbacks

We recently hit marginal new lows, something we have warned about over the past month; while the indexes and our outlook remains neutral to...

Vermilion Research

10-Year Treasury Yield Testing 40-Year Resistance; Upgrading Health Care to Overweight

10-year Treas yield $TNX is now testing 40-year downtrend resistance at 2.8-2.82%. If interest rates are to move lower, now would be the time,...

Vermilion Research

Value Remains Leadership; Actionable Ideas: Energy, Financials, Industrials, and Materials

We are sticking with Sectors and stocks that have remained technically sound throughout this correction, not on areas that are just now spiking...

Vermilion Research

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