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

NASDAQ Composite Index / Technical Analysis

<ul>
<li>Following last week's pullback, a consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports.</li>
<li>As long as these base supports continue to hold, it tells us this is likely just a normal pullback within the overall bullish trend.</li>
<li>Important supports that we need to see hold in order to remain bullish include 4600 on the S&amp;P 500 and 14,400 on the Nasdaq Composite.</li>
</ul>


Following last week's pullback, a consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports.
As long as these base supports continue to hold, it tells us this is likely just a normal pullback within the overall bullish trend.
Important supports that we need to see hold in order to remain bullish include 4600 on the S&amp;P 500 and 14,400 on the Nasdaq Composite.


Major Base Supports Holding; DXY Testing the 2-Month Downtrend; 4600 on SPX Remains Key Support

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market remains in "lockout rally" mode, where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings.</li>
<li>We have discussed this on a weekly basis since 11/21/23. Still no reason to fight this bullish trend, and we continue to expect more upside into year-end and early 2024.</li>
<li>We highlight buys in Steel: NUE, STLD, RS, WOR, TMST, ZEUS, LatAm Banks: ITUB, BSBR, BBD, BAP, BCH, Industrials: ITT, FSS, SPXC, ATS, KAI, CR, BRC, SXI, and HSC</li>
</ul>


The market remains in "lockout rally" mode, where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings.
We have discussed this on a weekly basis since 11/21/23. Still no reason to fight this bullish trend, and we continue to expect more upside into year-end and early 2024.
We highlight buys in Steel: NUE, STLD, RS, WOR, TMST, ZEUS, LatAm Banks: ITUB, BSBR, BBD, BAP, BCH, Industrials: ITT, FSS, SPXC, ATS, KAI, CR, BRC, SXI, and HSC


Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Cross Asset Strategy

<ul><li>Markets are pricing in heavy cuts for next year as inflation keeps coming in soft, making a soft landing the base case for the bulls, but everything comes at a price.</li><li>But how are assets likely to perform if the market narrative is correct and yields will indeed come down in a continued bull-steepening fashion, which in our view is the most likely scenario in H1 2024?</li><li>We have pulled out some of our cross-asset beta studies from our data-library to provide you with an overview of how assets perform during various yield curve regimes.</li></ul>

Markets are pricing in heavy cuts for next year as inflation keeps coming in soft, making a soft landing the base case for the bulls, but everything comes at a price.But how are assets likely to perform if the market narrative is correct and yields will indeed come down in a continued bull-steepening fashion, which in our view is the most likely scenario in H1 2024?We have pulled out some of our cross-asset beta studies from our data-library to provide you with an overview of how assets perform during various yield curve regimes.

Bull Steepening Watch – Is Lower Yields Really What Risk Assets Want?

Dow Jones Industrial Average / Technical Analysis

<ul>
<li>We still believe it's possible we've seen the lows for this pause/pullback on the SPX, and we see low probability of meaningful correction if SPX is above 4300-4325 (1.5-year support).</li>
<li>As initially discussed in our 8/29/23 Compass, we wouldn't be surprised to see another month+ (i.e., through the end of September, and possibly longer) of consolidation between 4325 and 4600.</li>
<li>Downgrading Industrials (XLI) to market weight due to 1.5+ year RS uptrend violation. Buys highlighted in Uranium and Energy (refiners and coal).</li>
</ul>


We still believe it's possible we've seen the lows for this pause/pullback on the SPX, and we see low probability of meaningful correction if SPX is above 4300-4325 (1.5-year support).
As initially discussed in our 8/29/23 Compass, we wouldn't be surprised to see another month+ (i.e., through the end of September, and possibly longer) of consolidation between 4325 and 4600.
Downgrading Industrials (XLI) to market weight due to 1.5+ year RS uptrend violation. Buys highlighted in Uranium and Energy (refiners and coal).


Downgrading Industrials to Market Weight; Major Supports Holding; Buys in Uranium and Refiners

First Trust Dj Internet Ind / Technical Analysis

<ul>
<li>Last week (8/22/23) we discussed our expectations for an oversold bounce due to an overwhelming number of indexes/Sectors/industries testing multi-month supports, combined with Treasury yields and the DXY testing resistance.</li>
<li>The bounce has begun with the SPP ending higher last week for the first time in a month, and it is possible we have seen the lows for this pause/pullback.</li>
<li>A meaningful correction cannot happen if the SPX is above 4300-4325, but we would not be surprised to see another month or more of consolidation between 4300 and 4600.</li>
</ul>


Last week (8/22/23) we discussed our expectations for an oversold bounce due to an overwhelming number of indexes/Sectors/industries testing multi-month supports, combined with Treasury yields and the DXY testing resistance.
The bounce has begun with the SPP ending higher last week for the first time in a month, and it is possible we have seen the lows for this pause/pullback.
A meaningful correction cannot happen if the SPX is above 4300-4325, but we would not be surprised to see another month or more of consolidation between 4300 and 4600.


Oversold Bounce Underway Amid Consolidation Phase; Buys in IT Consulting, Uranium, Technology

United States

Industrial Select Sector SPDR Fund is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of The Industrial Select Sector Index. The ETF holds large cap U.S. industrials stocks. Its investments are focused on industrial products, including electrical & construction equipment, waste management and machinery. The ETF weights the holdings by market capitalization.

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Industrial Select Sector SPDR (XLI US)

Major Base Supports Holding; DXY Testing the 2-Month Downtrend; 4600 on SPX Remains Key Support

A consistent theme we are seeing is that many broad market indexes and Sector ETFs are holding above (and bouncing at) major base supports...

Vermilion Research

Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS

Market remains in a "lockout rally" where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings -- as we...

Vermilion Research

Bull Steepening Watch – Is Lower Yields Really What Risk Assets Want?

Let’s run through each asset class to see where to put your eggs if a bull-steepening of the yield curve continues into 2024.

Steno Research

Downgrading Industrials to Market Weight; Major Supports Holding; Buys in Uranium and Refiners

Downgrading Industrials/Manufacturing $XLI to market weight. Still see low probability of a meaningful correction if the $SPX is above 4300-4325....

Vermilion Research

Oversold Bounce Underway Amid Consolidation Phase; Buys in IT Consulting, Uranium, Technology

Our 8/22 expectations for oversold bounce coming to fruition as major multi-month supports hold $SPX $DJI $XLK $ACWI, & Treasury yields $TNX $TYX...

Vermilion Research

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