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

US Treasury (10 Yr Generic) / Technical Analysis

<p>Charts Highlighted: XLE, RYE, WTI Crude Oil, XLF, XLB, XLI, RCD, EEM, XLU, XLP, AWK, AEE, WMT, PEP, NUE, STLD, X, CMC, SMSMY, SCHN, RYI, TMST, MT, TX, MTL, ETR, FTS, CMS, CNP, LNT, NI, OGE, BKH, NEE, DUK, SO, and AEP</p><p>Cyclical value areas including Financials, Materials, Manufacturing, Transportation, and equal-weighted Discretionary display short-term improvement as interest rates show signs of a <em>potential</em> bottom at 1.13%. This is encouraging, however we are still neutral yet constructive overall. As we noted last week, we need to see the 10-year Treasury yield breach, and hold above, 1.45%, as well as sustained price improvement by small-caps (i.e., IWM above $234.50) before we can declare a new broad-based bull market.</p>

Charts Highlighted: XLE, RYE, WTI Crude Oil, XLF, XLB, XLI, RCD, EEM, XLU, XLP, AWK, AEE, WMT, PEP, NUE, STLD, X, CMC, SMSMY, SCHN, RYI, TMST, MT, TX, MTL, ETR, FTS, CMS, CNP, LNT, NI, OGE, BKH, NEE, DUK, SO, and AEPCyclical value areas including Financials, Materials, Manufacturing, Transportation, and equal-weighted Discretionary display short-term improvement as interest rates show signs of a potential bottom at 1.13%. This is encouraging, however we are still neutral yet constructive overall. As we noted last week, we need to see the 10-year Treasury yield breach, and hold above, 1.45%, as well as sustained price improvement by small-caps (i.e., IWM above $234.50) before we can declare a new broad-based bull market.

10-Year Treasury Yield Below Key Resistance; Buying Utilities, Consumer Staples, and Steel Stocks

Emerging Market Economist, Emerginomics

Tatiana Orlova

Emerging Market Economist

Emerginomics

Cross Asset Strategy

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<p>An unexpected “hawkish” comment by Fed Chair Powell following the July Fed policy meeting jolted global markets out of complacency. President Trump’s tweets about new trade tariffs on Chinese goods, posted a day later, destroyed the remnants of the risk-on mood. We think that these two developments, rather than the recently announced US sanctions targeting Russian sovereign debt, served as the primary triggers behind the recent rouble rout. The latest export dynamics are also worrying and show that demand for Russian exports (mostly commodities) is suffering from flagging global growth. The balance-of-payments 2Q data have revealed a sharp contraction in the current account surplus, owing mainly to the poor export performance. Given the bleak near-term outlook for the oil prices and a high likelihood of further outflows from risky assets, we expect USDRUB to move into the 66-68 range in the coming weeks. </p>
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An unexpected “hawkish” comment by Fed Chair Powell following the July Fed policy meeting jolted global markets out of complacency. President Trump’s tweets about new trade tariffs on Chinese goods, posted a day later, destroyed the remnants of the risk-on mood. We think that these two developments, rather than the recently announced US sanctions targeting Russian sovereign debt, served as the primary triggers behind the recent rouble rout. The latest export dynamics are also worrying and show that demand for Russian exports (mostly commodities) is suffering from flagging global growth. The balance-of-payments 2Q data have revealed a sharp contraction in the current account surplus, owing mainly to the poor export performance. Given the bleak near-term outlook for the oil prices and a high likelihood of further outflows from risky assets, we expect USDRUB to move into the 66-68 range in the coming weeks. 


Russia: US Sanctions Are Not The Main Reason for Rouble Rout

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<p><strong>The recent softening of the Fed’s monetary stance and hopes that the US and China should reach a new trade agreement in March have boosted demand for EM currencies. We think that the Central Bank of Russia is one of those EM banks that may switch into an easing mode before the year is out. Besides, the oil market is in an upbeat mood again. Although the US is determined to impose further “biting” sanctions against Russia, a few months delay is likely due to the busy domestic agenda of the US Congress, and the current focus on more pressing issues. Given these conditions, we are bullish on the rouble in the short term. We are also expecting further gains by Russia’s OFZs and sovereign Eurobonds, especially if the oil rally continues.</strong></p>
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The recent softening of the Fed’s monetary stance and hopes that the US and China should reach a new trade agreement in March have boosted demand for EM currencies. We think that the Central Bank of Russia is one of those EM banks that may switch into an easing mode before the year is out. Besides, the oil market is in an upbeat mood again. Although the US is determined to impose further “biting” sanctions against Russia, a few months delay is likely due to the busy domestic agenda of the US Congress, and the current focus on more pressing issues. Given these conditions, we are bullish on the rouble in the short term. We are also expecting further gains by Russia’s OFZs and sovereign Eurobonds, especially if the oil rally continues.


Russian Assets to Benefit from Higher Oil Prices and Busy US Congressional Agenda

Russia

Mechel PAO, together with its subsidiaries, engages in mining, steel, and power businesses in Russia, Asia, Europe, the Commonwealth of Independent States, the Middle East, the United States, and internationally. Its Mining segment produces and sells coking, metallurgical, and steam coal; coke; chemical products, including coal tar, naphthalene, and other compounds; and iron ore concentrates. The company’s Steel segment produces and sells semi-finished steel products, carbon and specialty long products, and carbon and stainless flat products, as well as value-added downstream metal products, including forgings, stampings, hardware, rails, balks, and ferrosilicon. Its Power segment generates, distributes, and sells electricity and heat energy to third parties. The company was formerly known as Mechel OAO and changed its name to Mechel PAO in March 2016. Mechel PAO was founded in 2003 and is based in Moscow, Russia.

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Mechel PAO (MTL US)

10-Year Treasury Yield Below Key Resistance; Buying Utilities, Consumer Staples, and Steel Stocks

Cyclical value areas are improving, but so are defensives. In order to get more bullish, we need to see the 10-year Treasury yield break above...

Vermilion Research

Russia: US Sanctions Are Not The Main Reason for Rouble Rout

An unexpected “hawkish” comment by Fed Chair Powell following the July Fed policy meeting jolted global markets out of complacency. President...

Tatiana Orlova

Russian Assets to Benefit from Higher Oil Prices and Busy US Congressional Agenda

The recent softening of the Fed’s monetary stance and hopes that the US and China should reach a new trade agreement in March have boosted demand...

Tatiana Orlova

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52-week Range

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