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

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Many major indexes are still testing (and holding above) critical supports. This includes MSCI ACWI (ACWI-US), TOPIX/TOPIX Small/Nikkei 225, EURO STOXX 50, STOXX Europe 600, and the DAX</li>
<li>Our overall outlook remains neutral, and we continue to see many attractive buying opportunities, especially out of Japan, India, and a new one -- Brazil.</li>
<li>Buy ideas focus on the Consumer Discretionary and Financials Sectors, with the vast majority of stock recommendations from Japan, India, and Brazil</li>
</ul>


Many major indexes are still testing (and holding above) critical supports. This includes MSCI ACWI (ACWI-US), TOPIX/TOPIX Small/Nikkei 225, EURO STOXX 50, STOXX Europe 600, and the DAX
Our overall outlook remains neutral, and we continue to see many attractive buying opportunities, especially out of Japan, India, and a new one -- Brazil.
Buy ideas focus on the Consumer Discretionary and Financials Sectors, with the vast majority of stock recommendations from Japan, India, and Brazil


Europe, Japan, $ACWI Testing Critical Supports; Rising DXY, Global Sovereign Yields a Major Headwind

<ul>
<li>This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.</li>
<li>Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).</li>
<li>Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.</li>
</ul>


This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.
Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).
Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.


U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Cross Asset Strategy

<ul>
<li>Going into the new year, Brazil featured prominently as a key overweight EM on commodity &amp; China leverage, undervalued BRL and potential upside from reforms</li>
<li>In the past month, MSCI Brazil (EWZ) underperformed MSCI EM (EEM) by ~9% and the BRL underperformed on fiscal policy worries, an unwelcome upside inflation surprise, disappointing retail sales, delayed vaccine timelines, pandemic resurgence and concerns on potential breach of spending caps</li>
<li>Our text-mined indicators saw a melt-up in sentiment on Brazil &amp; EMs hitting record highs in late December with &gt;3x STDEV readings; after a slight pullback, overall EM sentiment is on the rise again but our Brazil macro indicator has yet to recover</li>
<li>Aside from the IPCA inflation and retail disappointment, our Brazil indicator has been impacted by news of Ford's announcement of 3 auto plant closures eliminating ~8% of total Brazilian auto production last week</li>
<li>Despite the barrage of bad news, not all indicators are negative:  Incoming December activity indicators and flows are new positives, while yesterday's approval of AstraZeneca &amp; Sinovac vaccines is another incremental positive after mismanagement &amp; anti-vax messaging from Bolsonaro</li>
<li>While idiosyncratic challenges in Brazil are significant, this is "business as usual"; stability in USD and treasury yields would likely help re-establish conviction in Brazilian equities and the BRL on the broader EM flows theme, for a much-anticipated catch-up trade</li>
</ul>


Going into the new year, Brazil featured prominently as a key overweight EM on commodity &amp; China leverage, undervalued BRL and potential upside from reforms
In the past month, MSCI Brazil (EWZ) underperformed MSCI EM (EEM) by ~9% and the BRL underperformed on fiscal policy worries, an unwelcome upside inflation surprise, disappointing retail sales, delayed vaccine timelines, pandemic resurgence and concerns on potential breach of spending caps
Our text-mined indicators saw a melt-up in sentiment on Brazil &amp; EMs hitting record highs in late December with &gt;3x STDEV readings; after a slight pullback, overall EM sentiment is on the rise again but our Brazil macro indicator has yet to recover
Aside from the IPCA inflation and retail disappointment, our Brazil indicator has been impacted by news of Ford's announcement of 3 auto plant closures eliminating ~8% of total Brazilian auto production last week
Despite the barrage of bad news, not all indicators are negative:  Incoming December activity indicators and flows are new positives, while yesterday's approval of AstraZeneca &amp; Sinovac vaccines is another incremental positive after mismanagement &amp; anti-vax messaging from Bolsonaro
While idiosyncratic challenges in Brazil are significant, this is "business as usual"; stability in USD and treasury yields would likely help re-establish conviction in Brazilian equities and the BRL on the broader EM flows theme, for a much-anticipated catch-up trade


TMI Snapshot: Our Brazil Sentiment Signal Diverges from Rest of EM - Opportunity or Warning?

While a more cautious outlook is appropriate, as long as $77 holds (the September lows) we are constructive and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75 and the 200-day MA as last-ditch support. Considering the recent pullback we want to be sticking with areas that have continued to outperform in spite of recent broad market weakness. For that we look to the following leadership Sectors: Technology, Consumer Discretionary, Manufacturing, Materials, and Transportation

While a more cautious outlook is appropriate, as long as $77 holds (the September lows) we are constructive and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75 and the 200-day MA as last-ditch support. Considering the recent pullback we want to be sticking with areas that have continued to outperform in spite of recent broad market weakness. For that we look to the following leadership Sectors: Technology, Consumer Discretionary, Manufacturing, Materials, and Transportation

MSCI Emerging Markets Index / Technical Analysis

China (MSCI China) continues to offer many attractive setups and accounts for the vast majority of today’s recommendations. Taiwan (TAIEX) continues to be worthy of an overweight within the EM universe, while Brazil (Bovespa) and India (SENSEX) display improving price and RS trends -

China (MSCI China) continues to offer many attractive setups and accounts for the vast majority of today’s recommendations. Taiwan (TAIEX) continues to be worthy of an overweight within the EM universe, while Brazil (Bovespa) and India (SENSEX) display improving price and RS trends -

US Dollar Weakness Remains A Tailwind For EM

Brazil

Localiza Rent a Car SA rents automobiles.  The Company owns and franchises locations in Brazil and elsewhere in Latin America.  Localiza primarily operates through airport locations.  The Company also sells used cars and offers fleet management services.

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Localiza Rent A Car Sa (RENT3 BZ)

Europe, Japan, $ACWI Testing Critical Supports; Rising DXY, Global Sovereign Yields a Major Headwind

Europe $STOXX 50, Japan $TOPIX $Nikkei 225, $ACWI Testing Critical Supports; Rising $DXY, Global Sovereign Yields Remain Major Headwinds for global...

Vermilion Research

U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

This is now the third week in a row where we are discussing an increasing number of country indexes with bullish 3.5-9-month downtrend reversals,...

Vermilion Research

TMI Snapshot: Our Brazil Sentiment Signal Diverges from Rest of EM - Opportunity or Warning?

Our Brazil macro sentiment indicator has diverged from broader EM to the downside on a series of negative surprises and fiscal policy concerns, but...

Elan Gore

Cautiously Optimistic on Global Equities

We are constructive on global equities and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75...

Vermilion Research

US Dollar Weakness Remains A Tailwind For EM

China accounts for the vast majority of today’s recommendations. Taiwan (TAIEX) continues to be worthy of an overweight within EM, while Brazil...

Vermilion Research

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