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>Expectations since late-September remain unchanged; if $SPX is above 4165-4200/200-day MA, we're bullish, as most signs point to this being a normal pullback within the ongoing bullish trend in SPX.</li>
<li>As discussed last week (10/11/23), we have growing confidence that lows are likely in on the SPX, which made a low at 4216 (with 4200 hit exactly overnight 10/4/23).</li>
<li>We also discussed Russell 2000 breadth bottoming last week, and this has continued with bullish breadth divergences on Russell 2000 % of stocks above their 50- and 200-day MAs</li>
</ul>


Expectations since late-September remain unchanged; if $SPX is above 4165-4200/200-day MA, we're bullish, as most signs point to this being a normal pullback within the ongoing bullish trend in SPX.
As discussed last week (10/11/23), we have growing confidence that lows are likely in on the SPX, which made a low at 4216 (with 4200 hit exactly overnight 10/4/23).
We also discussed Russell 2000 breadth bottoming last week, and this has continued with bullish breadth divergences on Russell 2000 % of stocks above their 50- and 200-day MAs


Russell 2000 With Bullish Breadth Divergences; Buys in Insurance and Health Care Distributors

<ul>
<li>We've discussed since late Sept increasing odds of a pullback to confluence of support at 4165-4200/the 200-day MA on SPX, and that if this support holds, it's a normal pullback</li>
<li>Ongoing market dynamics allow us to be even more confident in our unchanged outlook; 4216 was the low for this pullback, with 4200 getting hit overnight (early Wednesday last week).</li>
<li>The broad equity market is not yet out of the woods, but as long as the SPX is above 4165-4200 and the 200-day MA, we are bullish.</li>
</ul>


We've discussed since late Sept increasing odds of a pullback to confluence of support at 4165-4200/the 200-day MA on SPX, and that if this support holds, it's a normal pullback
Ongoing market dynamics allow us to be even more confident in our unchanged outlook; 4216 was the low for this pullback, with 4200 getting hit overnight (early Wednesday last week).
The broad equity market is not yet out of the woods, but as long as the SPX is above 4165-4200 and the 200-day MA, we are bullish.


Growing Confidence That the Lows Are In; 4165-4200/200-Day MA on SPX Remains Key; Buys in Financials

<ul>
<li>As discussed in last week's Compass (9/26/23), we continue to believe the odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased </li>
<li>Our reasoning continues to be due to the major breakouts in the U.S. dollar (DXY) and Treasury yields (10- and 30-year), coupled with a handful of Sectors/indexes breaking below supports.</li>
<li>We are also monitoring 1-year uptrends on the S&amp;P 500 and Russell 2000 (IWM), currently at 4240 and $173. Flirting with breakdowns below these levels today. Buys in retail/energy shippers</li>
</ul>


As discussed in last week's Compass (9/26/23), we continue to believe the odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased 
Our reasoning continues to be due to the major breakouts in the U.S. dollar (DXY) and Treasury yields (10- and 30-year), coupled with a handful of Sectors/indexes breaking below supports.
We are also monitoring 1-year uptrends on the S&amp;P 500 and Russell 2000 (IWM), currently at 4240 and $173. Flirting with breakdowns below these levels today. Buys in retail/energy shippers


S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

<ul>
<li>We've expected to see 4300-4325 act as major support on SPX, while also expecting consolidation between 4300-4325 support and 4600 resistance until the end of September, and possibly longer.</li>
<li>Still possible this 4300-4325 support holds, but odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased following major breakouts in the U.S. dollar (DXY) and Treasury yields </li>
<li>Also adding to concerns: 1+ year uptrend violations on $IWO/$IWP, and breakdowns below 34,280 on the Dow, $180 on IWM, $472 on SOXX, $81 on ITB, and $104-$105 on XLI</li>
</ul>


We've expected to see 4300-4325 act as major support on SPX, while also expecting consolidation between 4300-4325 support and 4600 resistance until the end of September, and possibly longer.
Still possible this 4300-4325 support holds, but odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased following major breakouts in the U.S. dollar (DXY) and Treasury yields 
Also adding to concerns: 1+ year uptrend violations on $IWO/$IWP, and breakdowns below 34,280 on the Dow, $180 on IWM, $472 on SOXX, $81 on ITB, and $104-$105 on XLI


U.S. Dollar (DXY) And Treasury Yields Breaking Out; Growing Number of Index/Sector Breakdowns

<ul>
<li>Over the last two weeks we discussed expectations for an oversold bounce; the bounce has continued. We believe it is possible we've seen the lows for this pause/pullback on SPX.</li>
<li>We see low probability of a meaningful correction if SPX is above 4300-4325 (1.5-year support), but would not be surprised to see another month+ of consolidation between 4325 and 4600.</li>
<li>Shorter-Term, as long as 4460 short-term support holds, we expect a test of 4600. Today we highlight several buys within Energy.</li>
</ul>


Over the last two weeks we discussed expectations for an oversold bounce; the bounce has continued. We believe it is possible we've seen the lows for this pause/pullback on SPX.
We see low probability of a meaningful correction if SPX is above 4300-4325 (1.5-year support), but would not be surprised to see another month+ of consolidation between 4325 and 4600.
Shorter-Term, as long as 4460 short-term support holds, we expect a test of 4600. Today we highlight several buys within Energy.


Bounce Continues; Small-Caps Test 3.5-Year RS Lows; Nasdaq/NYSE Breadth Improving; Buys in Energy

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)

Russell 2000 With Bullish Breadth Divergences; Buys in Insurance and Health Care Distributors

Our view since late Sept remains unchanged: if $SPX is above 4165-4200 and the 200-day MA, we are bullish, as most signs point to this being a...

Vermilion Research

Growing Confidence That the Lows Are In; 4165-4200/200-Day MA on SPX Remains Key; Buys in Financials

Our confidence in our outlook is growing: as long as the $SPX is above 4165-4200 and the 200-day MA, most signs point to this being a normal...

Vermilion Research

S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

As discussed last week, we continue to believe the odds of a deeper pullback to $SPX 4165-4200/the 200-day MA have increased following major...

Vermilion Research

U.S. Dollar (DXY) And Treasury Yields Breaking Out; Growing Number of Index/Sector Breakdowns

Odds of a deeper pullback to $SPX 4165-4200/the 200-day MA have increased following major breakouts in the U.S. dollar $DXY and Treasury yields...

Vermilion Research

Bounce Continues; Small-Caps Test 3.5-Year RS Lows; Nasdaq/NYSE Breadth Improving; Buys in Energy

Expectations over the past two weeks for an oversold bounce in $SPX have played out. 4300-4325 (1.5-year support) remains solid floor, but could...

Vermilion Research

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