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

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

U.S. Equity Strategy: Markets Bouncing off Key Support

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

SPX turned bearish below 3,410 and we used the DJI to short at 27,700 (break below 28k pivot support) given the Dow is underperforming the SPX. NDX below 11,600 is the core risk driver. Lack of stimulus clarity and Covid on the rise weighing on pivot support breaks. Big tech earnings today expected to give NDX a lift (bounce trade up).SPX 3,410 and NDX 11,600 represent key pivot resistance points for a fresh short phase and the bull/bear line.Asia long levels outlined on weakness.

SPX turned bearish below 3,410 and we used the DJI to short at 27,700 (break below 28k pivot support) given the Dow is underperforming the SPX. NDX below 11,600 is the core risk driver. Lack of stimulus clarity and Covid on the rise weighing on pivot support breaks. Big tech earnings today expected to give NDX a lift (bounce trade up).SPX 3,410 and NDX 11,600 represent key pivot resistance points for a fresh short phase and the bull/bear line.Asia long levels outlined on weakness.

FTSE China A50 Index / Technical Analysis

Base case calls for buying US equities at sub DJI 28k, SPX 3,410 and NDX 11,600-500 while allowing for some noise to base and stage a fresh up cycle. Do not want to trade for any length of time below SPX 3,400 to hold longs. Asia long levels on a dip given odds the US ranges into the election barring a stimulus package announcement.Europe remains weak with a bias to short rally attempts as the short pair/long US.In Asia we have liked being long A shares, Australia, H shares and now see potential to work into a long in the Philippines. Top shorts are HSI, STI, KLSE. Taiwan and Korea are transitioning into the bull camp on a pullback to position for a break above key highs with new high projections noted.

Base case calls for buying US equities at sub DJI 28k, SPX 3,410 and NDX 11,600-500 while allowing for some noise to base and stage a fresh up cycle. Do not want to trade for any length of time below SPX 3,400 to hold longs. Asia long levels on a dip given odds the US ranges into the election barring a stimulus package announcement.Europe remains weak with a bias to short rally attempts as the short pair/long US.In Asia we have liked being long A shares, Australia, H shares and now see potential to work into a long in the Philippines. Top shorts are HSI, STI, KLSE. Taiwan and Korea are transitioning into the bull camp on a pullback to position for a break above key highs with new high projections noted.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a> (short for 'The Science and Technology Innovation Board 50 Index') was first published on 23 July this year. The index is free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market. The STAR50 Index has outperformed its peers and has narrowly underperformed the Chinext Index on a year to date basis.
Four asset managers were approved by the CSRC to launch ETFs on the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a> and they raised CNY 20bn (CNY 5bn each), the maximum allowed, in one day. Total subscriptions were around CNY 100bn.
With a relatively large AUM benchmarked to a volatile index with volatile stocks, plus a lot of large listings coming through, there will be some interesting moves in stocks at the upcoming December rebalance. The index methodology specifies that there cannot be more than 5 inclusions and exclusions in a single review, and we will hit that number very easily. In the absence of the 5 name change limit, we would have had close to 12 inclusions and exclusions. With the 5 name changes, the one-way turnover will be in excess of 22%.
<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a> could be included in the index at the December review. If it is not included in December, then its a sure inclusion in the March 2021 review.

The SSE STAR 50 (STAR50 INDEX) (short for 'The Science and Technology Innovation Board 50 Index') was first published on 23 July this year. The index is free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market. The STAR50 Index has outperformed its peers and has narrowly underperformed the Chinext Index on a year to date basis.
Four asset managers were approved by the CSRC to launch ETFs on the SSE STAR 50 (STAR50 INDEX) and they raised CNY 20bn (CNY 5bn each), the maximum allowed, in one day. Total subscriptions were around CNY 100bn.
With a relatively large AUM benchmarked to a volatile index with volatile stocks, plus a lot of large listings coming through, there will be some interesting moves in stocks at the upcoming December rebalance. The index methodology specifies that there cannot be more than 5 inclusions and exclusions in a single review, and we will hit that number very easily. In the absence of the 5 name change limit, we would have had close to 12 inclusions and exclusions. With the 5 name changes, the one-way turnover will be in excess of 22%.
Ant Financial (1051260D CH) could be included in the index at the December review. If it is not included in December, then its a sure inclusion in the March 2021 review.

STAR Board: STAR50 Index - The December Rebalance Is Going to Be BIG

The S&amp;P 500, Nasdaq 100, and Russell 2000 are all holding above their respective short-term support levels and market dynamics remain positive. As a result, our outlook remains bullish and we continue to believe a “buy the dip” mentality is warranted. In today’s report we highlight attractive Groups and stocks within Services, Transportation, &amp; Utilities: Construction &amp; Engineering, Large-Cap, Auctions, Vehicle Rentals/Leasing, Electric, Southwest

The S&amp;P 500, Nasdaq 100, and Russell 2000 are all holding above their respective short-term support levels and market dynamics remain positive. As a result, our outlook remains bullish and we continue to believe a “buy the dip” mentality is warranted. In today’s report we highlight attractive Groups and stocks within Services, Transportation, &amp; Utilities: Construction &amp; Engineering, Large-Cap, Auctions, Vehicle Rentals/Leasing, Electric, Southwest

U. S. Equity Strategy: Upgrading Utilities; Downgrading Communications

United States

The NASDAQ-100 Index is a modified capitalization-weighted index of the 100 largest and most active non-financial domestic and international issues listed on the NASDAQ. No security can have more than a 24% weighting. The index was developed with a base value of 125 as of February 1, 1985. Prior to December 21,1998 the Nasdaq 100 was a cap-weighted index.

Nasdaq-100 Stock Index (NDX INDEX)

U.S. Equity Strategy: Markets Bouncing off Key Support

In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican banks, Banks, Southwest, and Investment...

Vermilion Research

SPX 3,410 and NDX 11,600 Breaks

SPX 3,410 and NDX 11,600 breakdown points will act as resistance on a rally attempt and the bull bear lines for global risk. Tech earnings today...

Thomas Schroeder

US, China and Asian Bullish Bets

Base case calls for buying US equities at sub DJI 28k, SPX 3,410 and NDX 11,600-500 while allowing for some noise to base and working into larger...

Thomas Schroeder

STAR Board: STAR50 Index - The December Rebalance Is Going to Be BIG

The STAR50 index has seen a lot of interest following its launch in July with over CNY 20bn raised by 4 ETFs. We look at the index methodology, the...

Brian Freitas

U. S. Equity Strategy: Upgrading Utilities; Downgrading Communications

We are upgrading Utilities and downgrading Communications. We recap important technical levels across major indexes and share actionable ideas...

Vermilion Research