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>The bifurcation between large-cap growth and small-caps that we discussed last week has continued, where small-caps have generally not been participating in the rally.</li>
<li>As we said last week, this bifurcation can continue, but it is not the type of breadth that supports a sustainable new bull market.</li>
<li>We need to see the Russell 2000 (IWM) stay above $209 in order to have confidence that the bottom is in. Meanwhile, stick with the commodity and defensive Sectors.</li>
</ul>


The bifurcation between large-cap growth and small-caps that we discussed last week has continued, where small-caps have generally not been participating in the rally.
As we said last week, this bifurcation can continue, but it is not the type of breadth that supports a sustainable new bull market.
We need to see the Russell 2000 (IWM) stay above $209 in order to have confidence that the bottom is in. Meanwhile, stick with the commodity and defensive Sectors.


Bifurcation Continues; Banks, Semiconductors, Small-Caps, Homebuilders Remain Concerns

<ul>
<li>As we noted last week, $209 on the Russell 2000 (IWM) is arguably the most significant resistance level of all right now.</li>
<li>We would like the see a break above $209 on the IWM in order to have a sustainable new bull market.</li>
<li>4590-4600 is a significant resistance level on the S&amp;P 500 we are watching; if bears fail to show up there, next up would likely be a test of all-time highs.</li>
</ul>


As we noted last week, $209 on the Russell 2000 (IWM) is arguably the most significant resistance level of all right now.
We would like the see a break above $209 on the IWM in order to have a sustainable new bull market.
4590-4600 is a significant resistance level on the S&amp;P 500 we are watching; if bears fail to show up there, next up would likely be a test of all-time highs.


Russell 2000 (IWM) Still Testing $209 Resistance: Actionable Groups: Insurance, Shipping, Utilities

Key support levels we have been monitoring (the 200-day MAs on the S&amp;P 500 and equal-weighted S&amp;P 500) have failed to hold, something we noted as increasingly likely in last week’s Compass. Despite the break below support, the move lower has been orderly but technical indications remain mixed. The weight of the evidence leads us to remain cautious. In today’s report we highlight attractive Groups and stocks within Materials and Financials: Large-Cap and Small-Cap Gold, and Large-Cap and Small-Cap Property &amp; Casualty Insurance.

Key support levels we have been monitoring (the 200-day MAs on the S&amp;P 500 and equal-weighted S&amp;P 500) have failed to hold, something we noted as increasingly likely in last week’s Compass. Despite the break below support, the move lower has been orderly but technical indications remain mixed. The weight of the evidence leads us to remain cautious. In today’s report we highlight attractive Groups and stocks within Materials and Financials: Large-Cap and Small-Cap Gold, and Large-Cap and Small-Cap Property &amp; Casualty Insurance.

U.S. Equity Strategy: Technical Indications Mixed; Outlook Remains Cautious

Cross-Asset Thematic Strategy, Edelscourt

Albert Maass

Cross-Asset Thematic Strategy

Thematic (Sector/Industry)

As the era when all financial assets move up in tandem with the growing tide of central bank liquidity comes finally to an end -- starting with the selloff in Emerging Markets, Bitcoin, and all the riskiest assets -- what should we be looking for to keep returns and mitigate risks?
Cat bonds are a good candidate: they open up your portfolio to a new asset class, natural catastrophe insurance, that is uncorrelated with financial assets and their risks.
Acknowledging growing demand from investors, <a href="https://www.smartkarma.com/entities/12341" target="_blank" data-smartkarma-citation="entities:12341:1">Markel Corp (MKL US)</a> , a US based insurance and reinsurance holding company , is buying Nephila, the worlds's largest cat bond manager (with $12 billion in AUM) for an undisclosed amount.

As the era when all financial assets move up in tandem with the growing tide of central bank liquidity comes finally to an end -- starting with the selloff in Emerging Markets, Bitcoin, and all the riskiest assets -- what should we be looking for to keep returns and mitigate risks?
Cat bonds are a good candidate: they open up your portfolio to a new asset class, natural catastrophe insurance, that is uncorrelated with financial assets and their risks.
Acknowledging growing demand from investors, Markel Corp (MKL US) , a US based insurance and reinsurance holding company , is buying Nephila, the worlds's largest cat bond manager (with $12 billion in AUM) for an undisclosed amount.

Avoiding the Next Financial Storm? Cat Bonds Provide Diversification

Technicals continue to endorse a bullish outlook. And with the S&amp;P 500 breaking out to new highs yesterday, and insurance stocks recovering from last week, we are benefitting from renewed clarity following the muddled, past two months.In today’s report we highlight actionable ideas in the following Groups:<ul><li>Semis... see page 14-20</li><li>Insurers... see page 8-13</li></ul>

Technicals continue to endorse a bullish outlook. And with the S&amp;P 500 breaking out to new highs yesterday, and insurance stocks recovering from last week, we are benefitting from renewed clarity following the muddled, past two months.In today’s report we highlight actionable ideas in the following Groups:Semis... see page 14-20Insurers... see page 8-13

U.S. Equity Uptrend Resumes; Outlook Remains Bullish

United States

Erie Indemnity Company is the management company for the Erie Insurance Exchange. The Company is also involved in the property and casualty insurance business through its wholly-owned subsidiaries and through its management of Flagship City Insurance Company. Erie Indemnity sells auto, home, life and business insurance in the United States.

Everest Re Group, Ltd. provides reinsurance to property and casualty insurers in the United States and international markets.  The Company also provides property and casualty insurance to policyholders in the United States and Canada.  In addition, Everest Re offers excess and surplus lines insurance in the United States.

Cincinnati Financial Corporation, through its subsidiaries, offers property and casualty and life insurance.  The Company markets a variety of insurance products and provides leasing and financing services.

Loews Corporation is a diversified holding company.  The Company, through its subsidiaries, is involved in a variety of businesses including commercial property-casualty insurance, offshore drilling, natural gas exploration and production, operation of natural gas pipeline systems, and the operation of hotels and resorts.

W. R. Berkley Corporation, an insurance holding company, conducts operations in various segments of the property casualty insurance business.  Segments include specialty lines of insurance, alternative markets, reinsurance, regional property casualty insurance, and international.

Principal Financial Group, Inc. offers businesses, individuals and institutional clients a range of financial products and services.  The Company offers retirement solutions, life and health insurance, wellness programs, and investment and banking products.

Brown & Brown, Inc. and its subsidiaries provide a range of insurance and reinsurance products and services.  The Company also provides risk management, employee benefit administration, and managed health care services.  Brown & Brown operates offices across the United States.

FNF Group was created as a tracking stock proposal for the Fidelity National Financial, Inc. common stock. FNF provides title insurance, technology and transaction services to the real estate and mortgage industries.

Unum Group provides group disability and special risk insurance.  The Company provides disability insurance, group life insurance, and payroll-deducted voluntary benefits offered to employees at their worksites.

CNA Financial Corporation operates as an insurance holding company. The Company, through its subsidiaries, provides commercial property and casualty coverages such as risk management, information services, warranty, and claims administration. CNA Financial serves clients throughout the United States.

The People's Insurance Company (Group) of China Limited, through its subsidiaries, offers a range of property and casualty insurance products. The Company also offers asset management services for a variety of customers throughout China.

Sompo Holdings, Inc, is a holding company established through the integration of Sompo Japan Insurance Inc. and NIPPONKOA Insurance Company Limited. Through subsidiaries, the Company provides non-life insurance including marine, fire, and automobile, as well as life insurance.

QBE Insurance Group Limited is an insurance company which underwrites most forms of commercial and industrial insurance policies, as well as individual policies. QBE also manages Lloyds syndicates and provides investment management services. The Company provides its services both domestically and internationally.

Suncorp Group Ltd. offers retail and business banking, life and general insurance, superannuation and funds management services.  The Company's services include personal banking and loans, personal insurance products, credit cards, pension savings accounts, term deposits, property development finance, commercial lending, investments and lease financing.

China Pacific Insurance (Group) Company, Ltd. is an integrated insurance services provider. The Company offers life and property insurance products through its subsidiaries.

Poste Italiane SpA is mainly involved in the Insurance business. The Company also provides financial and postal services. The Company delivers letters, telegrams, and packages and also offers passbook savings accounts, checking accounts, international money orders, and foreign exchange services. Poste Italiane serves customers throughout Italy.

Talanx AG operates as a holding company. The Company, through its subsidiaries, provides insurance and financial services. Talanx offers retail, commercial, private, and industrial insurance, reinsurance, and other related services. Talanx operates worldwide.

Aviva PLC operates as an international insurance company that provides all classes of general and life assurance, including fire, motor, marine, aviation, and transport insurance. The Company also offers a variety of financial services, including unit trusts, stockbroking, long-term savings, and fund management.

Legal & General Group plc is a holding company. The Company, through its subsidiaries, provides savings, risk and investment management services such as annuities, long-term savings, life assurance and financial protection products. Legal & General Group's products are sold through bank, building society relationships, Independent Financial Advisers and directly to customers.

Swiss Life Holding is a financial services company.  The Company provides life and property insurance, institutional investment management, and private banking services.

Markel Corporation markets and underwrites specialty insurance products and programs to a variety of niche markets.  The Company also underwrites a diverse property, casualty, marine, and aviation insurance and reinsurance business on a worldwide basis.

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Markel Corp (MKL US)

Bifurcation Continues; Banks, Semiconductors, Small-Caps, Homebuilders Remain Concerns

Several indexes remain below key resistance, including 4600 on $SPX, $110 on $QQEW, $209 on $IWM, $111 on $IJR, $507 on the $SOX index $SOXX, $73...

Vermilion Research

Russell 2000 (IWM) Still Testing $209 Resistance: Actionable Groups: Insurance, Shipping, Utilities

$209 on the Russell 2000 ($IWM) is arguably the most significant resistance level of all right now, and we would like the see a break above $209 in...

Vermilion Research

U.S. Equity Strategy: Technical Indications Mixed; Outlook Remains Cautious

Key support levels we have been monitoring (the 200-day MAs on the S&P 500 and equal-weighted S&P 500) have failed to hold, something we...

Vermilion Research

Avoiding the Next Financial Storm? Cat Bonds Provide Diversification

As the era when all financial assets move up in tandem with the growing tide of central bank liquidity comes finally to an end -- starting with the...

Albert Maass

U.S. Equity Uptrend Resumes; Outlook Remains Bullish

Technicals continue to endorse a bullish outlook. And with the S&P 500 breaking out to new highs yesterday, and insurance stocks recovering...

Vermilion Research

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