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>The latest recessionary signal we see: WTI and Brent crude oil prices violating 1.5-year supports, only adding to our prior concerns about a weakening labor market (Sahm rule, SRI triggered)</li>
<li>We also discussed last week (August 29) how we were expecting the S&amp;P 500, Japan's TOPIX, and Europe's EURO STOXX 50 to "roll over near current or marginally higher levels."</li>
<li>Ongoing belief (since July 25) is that $ACWI is going through a 1- to 4-month pullback/consolidation that could end up being a topping pattern. All have since reacted lower.</li>
</ul>


The latest recessionary signal we see: WTI and Brent crude oil prices violating 1.5-year supports, only adding to our prior concerns about a weakening labor market (Sahm rule, SRI triggered)
We also discussed last week (August 29) how we were expecting the S&amp;P 500, Japan's TOPIX, and Europe's EURO STOXX 50 to "roll over near current or marginally higher levels."
Ongoing belief (since July 25) is that $ACWI is going through a 1- to 4-month pullback/consolidation that could end up being a topping pattern. All have since reacted lower.


Crude Oil Breaking 1.5-Year Support, Failed Breakouts on $EFA $ACWX; Still Expecting More Downside

Taiwan Stock Exchange Weighted Index / Technical Analysis

<ul>
<li>Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan's TOPIX, and 4884 on Europe's EURO STOXX 50.</li>
<li>We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.</li>
<li>Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.</li>
</ul>


Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan's TOPIX, and 4884 on Europe's EURO STOXX 50.
We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.
Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.


Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

<ul>
<li>Snap-Back rallies have continued in the largest global equity markets (U.S., Japan, and Europe).</li>
<li>Japan's TOPIX is still below 2690-2700 and the EURO STOXX 50 is below 4884, and whether they roll over here or from marginally higher levels, lower highs remain likely.</li>
<li>It all fits with our ongoing belief (since our July 25, 2024 Int'l Compass) that MSCI ACWI is going through a 1- to 4-month pullback/consolidation (we are one month in).</li>
</ul>


Snap-Back rallies have continued in the largest global equity markets (U.S., Japan, and Europe).
Japan's TOPIX is still below 2690-2700 and the EURO STOXX 50 is below 4884, and whether they roll over here or from marginally higher levels, lower highs remain likely.
It all fits with our ongoing belief (since our July 25, 2024 Int'l Compass) that MSCI ACWI is going through a 1- to 4-month pullback/consolidation (we are one month in).


Shift Now to Defensives; Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral Outlook Intact

iShares MSCI ACWI ex US ETF / Technical Analysis

<ul>
<li>Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.</li>
<li>Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).</li>
<li>There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they <em>are</em> in downtrends, a major problem longer-term.</li>
</ul>


Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.
Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they are in downtrends, a major problem longer-term.


MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports -- Bounce Potential

iShares MSCI Emerging Markets / Technical Analysis

<ul>
<li>Indexes have plunged since violating our "lines-in-the-sand" of 3875 on EURO STOXX 50, 14,815 on the DAX, $54 on ACWI ex-US (ACWX-US), $75.25 on EAFE (EFA-US), and $99 on ACWI(ACWI-US).</li>
<li>More recently, Japan’s TOPIX broke below the key 1840 level, as the number of countries breaking down increases.</li>
<li>We remain bearish at the index level as long as these indexes continue to make lower highs, and we expect that any bottoming process would take weeks/months to develop.</li>
</ul>


Indexes have plunged since violating our "lines-in-the-sand" of 3875 on EURO STOXX 50, 14,815 on the DAX, $54 on ACWI ex-US (ACWX-US), $75.25 on EAFE (EFA-US), and $99 on ACWI(ACWI-US).
More recently, Japan’s TOPIX broke below the key 1840 level, as the number of countries breaking down increases.
We remain bearish at the index level as long as these indexes continue to make lower highs, and we expect that any bottoming process would take weeks/months to develop.


Monitoring For A Bottom; Focus On Defensives

Canada

Metro Inc. distributes food and pharmaceutical products. The Company operates a network of food stores and drug stores in the provinces of Quebec and Ontario.

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Metro Inc (MRU CN)

Crude Oil Breaking 1.5-Year Support, Failed Breakouts on $EFA $ACWX; Still Expecting More Downside

Crude Oil Breaking Below 1.5-Year Support, Yet Another Recessionary Signal; Bearish Failed Breakouts on $EFA $ACWX; Still Expecting More Downside;...

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Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

Expecting Downside Ahead $ACWI $SPX; Stick With Defensive Sectors; Downgrading Taiwan $EWT $TSM to Market Weight; Global Discretionary vs. Staples...

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Shift Now to Defensives; Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral Outlook Intact

Shift Now to Defensives (Health Care, Telecommunications, Utilities, and Consumer Staples); Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral...

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MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports -- Bounce Potential

Bounce potential given $ACWX $EFA testing downtrend channel supports, but it would likely be a short-term trading opportunity due to the fact that...

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Monitoring For A Bottom; Focus On Defensives

Defensive Sectors including Consumer Staples, Health Care, and Utilities are emerging as leadership -- add exposure. Today we are focusing on...

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