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

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>We remain bearish as long as the YTD downtrends remain intact on the SPX and NDX (QQQ), and as long as the 7.5-month downtrend remains intact on the Russell 2000(IWM).</li>
<li>There is potential for a bounce given the SPX, QQQ, and IWM are all at downtrend channel supports.</li>
<li>The continued rise of the U.S. dollar (DXY), 10-yr Treasury yield, and WTI crude oil is what we believe is fueling the bear market in equities.</li>
</ul>


We remain bearish as long as the YTD downtrends remain intact on the SPX and NDX (QQQ), and as long as the 7.5-month downtrend remains intact on the Russell 2000(IWM).
There is potential for a bounce given the SPX, QQQ, and IWM are all at downtrend channel supports.
The continued rise of the U.S. dollar (DXY), 10-yr Treasury yield, and WTI crude oil is what we believe is fueling the bear market in equities.


Downgrading Materials; SPX, NDX, Russell 2000 Testing Downtrend Channel Support; Biotech Buys

<ul>
<li>The latest bear market rally came to a close last week after the S&amp;P 500 and Nasdaq 100 (QQQ) broke below their respective flag supports at 4070 and $304. </li>
<li>Last week we noted a break of these levels would likely mean a trip back to YTD lows and downtrend channel support, which is precisely where we are now.</li>
<li>We remain bearish as long as the downtrends remain intact on the S&amp;P 500, Nasdaq 100 (QQQ), Russell 2000 (IWM), S&amp;P 600 (IJR), and Russell Micro-Caps (IWC)</li>
</ul>


The latest bear market rally came to a close last week after the S&amp;P 500 and Nasdaq 100 (QQQ) broke below their respective flag supports at 4070 and $304. 
Last week we noted a break of these levels would likely mean a trip back to YTD lows and downtrend channel support, which is precisely where we are now.
We remain bearish as long as the downtrends remain intact on the S&amp;P 500, Nasdaq 100 (QQQ), Russell 2000 (IWM), S&amp;P 600 (IJR), and Russell Micro-Caps (IWC)


US Dollar & 10-Year Treasury Yield Breaking Out; Stick With Energy, Also Buying China Education Svcs

<ul>
<li>We continue to see the current environment as a bear market rally with the potential for it turn into something more following bullish breadth thrust signals.</li>
<li>The SPX and NDX have been treading water for a week (bull flags?), but the Russell 2000, DAX, Hang Seng, MSCI China (MCHI), and KWEB have continued to move higher.</li>
<li>We are also seeing major bullish reversals on Europe's STOXX 50 and Japan's Nikkei 225, topside 6- and 9-month downtrends, respectively. These are far from bearish signs.</li>
</ul>


We continue to see the current environment as a bear market rally with the potential for it turn into something more following bullish breadth thrust signals.
The SPX and NDX have been treading water for a week (bull flags?), but the Russell 2000, DAX, Hang Seng, MSCI China (MCHI), and KWEB have continued to move higher.
We are also seeing major bullish reversals on Europe's STOXX 50 and Japan's Nikkei 225, topside 6- and 9-month downtrends, respectively. These are far from bearish signs.


Small-Caps Starting to Lead; Short-Term Flag Patterns on Major Indexes; Ideas in Energy & Materials

Macroeconomic and Investing, The Macro Compass

Alfonso Peccatiello (Alf)

Macroeconomic and Investing

The Macro Compass

Actionable investment ideas and unique global macro insights. From the desk of a former Head of $20 bn Investment Portfolio straight to your inbox.

Actionable Investment Ideas

Macroeconomics

<ul><li>Investing is all about probabilities: all you need to do is assess the chances markets are assigning to different scenarios today and anticipate how this probability distribution will move over time.</li><li>In other words, you don’t need to be necessarily right on what happens next but just be able to grasp how market consensus will move from here.</li><li>Ignoring this simple principle has been a very expensive exercise for European fixed income investors over the last few weeks: the-ECB-will-never-really-hike mantra is melting under the eyes of bond investors married to a dovish narrative which has been successful for a decade but offers a very bad risk-reward today.</li></ul>

Investing is all about probabilities: all you need to do is assess the chances markets are assigning to different scenarios today and anticipate how this probability distribution will move over time.In other words, you don’t need to be necessarily right on what happens next but just be able to grasp how market consensus will move from here.Ignoring this simple principle has been a very expensive exercise for European fixed income investors over the last few weeks: the-ECB-will-never-really-hike mantra is melting under the eyes of bond investors married to a dovish narrative which has been successful for a decade but offers a very bad risk-reward today.

The Biggest Macro Risk You Might Be Ignoring

<ul>
<li>Last week we noted the S&amp;P 500 was testing support at 3800-3860 within its downtrend channel and that we were on watch for a potential bear market rally/oversold bounce.</li>
<li>This has officially begun following the break above 4030 on the S&amp;P 500, which was confirmed by bullish reversals on the Russell 2000, Nasdaq 100, DAX, Hang Seng, MCHI, KWEB.</li>
<li>As long as 3858 holds, it is possible the S&amp;P 500 breaks above the longer-term downtrend near the 200-day MA, which would mean the start of a new bull market.</li>
</ul>


Last week we noted the S&amp;P 500 was testing support at 3800-3860 within its downtrend channel and that we were on watch for a potential bear market rally/oversold bounce.
This has officially begun following the break above 4030 on the S&amp;P 500, which was confirmed by bullish reversals on the Russell 2000, Nasdaq 100, DAX, Hang Seng, MCHI, KWEB.
As long as 3858 holds, it is possible the S&amp;P 500 breaks above the longer-term downtrend near the 200-day MA, which would mean the start of a new bull market.


Bear Market Rally With Potential for More; Buy Ideas in Shipping, Land Drilling, Refining, Chemicals

United States

iShares Russell 2000 ETF is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of the Russell 2000 Index. The ETF holds mid and small-cap U.S. stocks. Its investments are in the smallest 2000 companies from the Russell 3000 Index. The ETF weights the holdings by market capitalization and rebalances annually.

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iShares Russell 2000 ETF (IWM US)

Downgrading Materials; SPX, NDX, Russell 2000 Testing Downtrend Channel Support; Biotech Buys

We remain bearish as long as the 6-8 month downtrends remain intact on the SPX, NDX (QQQ), and RUT (IWM). Bounce potential given SPX, QQQ, and IWM...

Vermilion Research

US Dollar & 10-Year Treasury Yield Breaking Out; Stick With Energy, Also Buying China Education Svcs

US Dollar $DXY & 10-Year Treasury Yield $TNX Breaking Out; Broad Equity Market Not Likely to Bottom Until the USD and Treasury Yields Start Moving...

Vermilion Research

Small-Caps Starting to Lead; Short-Term Flag Patterns on Major Indexes; Ideas in Energy & Materials

We still see this as a bear market rally with the potential for it turn into something more following bullish breadth thrust signals in recent...

Vermilion Research

The Biggest Macro Risk You Might Be Ignoring

Investing is all about probabilities: all you need to do is assess the chances markets are assigning to different scenarios today and anticipate...

Alfonso Peccatiello (Alf)

Bear Market Rally With Potential for More; Buy Ideas in Shipping, Land Drilling, Refining, Chemicals

With the $SPX reversing topside the 1-month downtrend (at 4030), the bear market rally is underway with the potential for more. Resistance levels:...

Vermilion Research

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