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 week's Compass we highlighted what we view as compelling signals that risk appetites are improving, which is bullish for the broad market. The trend of improving risk appetites has only continued over the past week and we are moving toward an outright bullish outlook.

In last week's Compass we highlighted what we view as compelling signals that risk appetites are improving, which is bullish for the broad market. The trend of improving risk appetites has only continued over the past week and we are moving toward an outright bullish outlook.

U.S. Equity Strategy: Small-Caps Re-Emerging As Leadership

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see <a href="https://www.smartkarma.com/insights/us-equities-time-to-get-defensive" target="_blank" data-smartkarma-citation="insights:51332" rel="noopener">US Equities: Time to Get Defensive</a>)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see US Equities: Time to Get Defensive)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

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. 

FTSE China A50 Index / Technical Analysis

SPX 4,180 is pivot support for the US cycle and risk inflections in Europe and Asia.  Backing off of 4,205 projection with risk of profit taking ahead of the long weekend is the game plan. RTY and DJI favored shorts with NDX the stronger horse to buy a pullback.A 50 long from 16,500 and add call above 17,700 is playing out nicely and we outlined dip support ahead of reaching for the 19,000 target.Asia short conviction in Japan, Taiwan and Korea.Europe is teetering at DAX and SX5E dual highs for a break or harder pullback sequence with the later favored. DAX is already showing signs of a top failure and typically leads the Eurostoxx 50. MIB is our focus short at 25k. European banks are the sleeper short for a crowded positioning shakeout.

SPX 4,180 is pivot support for the US cycle and risk inflections in Europe and Asia.  Backing off of 4,205 projection with risk of profit taking ahead of the long weekend is the game plan. RTY and DJI favored shorts with NDX the stronger horse to buy a pullback.A 50 long from 16,500 and add call above 17,700 is playing out nicely and we outlined dip support ahead of reaching for the 19,000 target.Asia short conviction in Japan, Taiwan and Korea.Europe is teetering at DAX and SX5E dual highs for a break or harder pullback sequence with the later favored. DAX is already showing signs of a top failure and typically leads the Eurostoxx 50. MIB is our focus short at 25k. European banks are the sleeper short for a crowded positioning shakeout.

Trade Levels in Asia and the Risk Pivot in SPX

Market dynamics remain largely positive and there continues to be an absence of breakdowns across all Sectors and the major averages. As a result, we continue to see a mixed market environment, but we remain constructive overall with the S&amp;P 500 holding above short-term support at the 50-day moving average and 4056.

Market dynamics remain largely positive and there continues to be an absence of breakdowns across all Sectors and the major averages. As a result, we continue to see a mixed market environment, but we remain constructive overall with the S&amp;P 500 holding above short-term support at the 50-day moving average and 4056.

U.S. Equity Strategy: Growth Improving, But Can It Last?

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Macroeconomics

Hitherto, the recovery in US economic activity since 2020 H1 should not have imparted sufficient strains on the labour market or capital stock to produce sustained inflationary pressures. Fiscal and monetary stimulus have spooked markets into expecting rising inflation, but the spike in April is firmly at odds with historic experiences during the early stage of an economic recovery.
Rising service sector activity has boosted prices for this important component within the consumer price index (CPI), as effective capacity struggles to keep pace with increased consumer spending. Goods inflation, notably for autos, has also risen due to supply constraints, but upward pressure on automotive prices could be sustained due to lingering production problems and low inventories.
Rising US import prices for industrial supplies reflect dislocations where production has failed to keep pace with strong US domestic demand. Tight shipping capacity has produced unprecedented freight rates from Asia to the US that are being passed onto customers via higher prices.
The Biden Administration has begun to impose higher wage costs on companies who act as federal government contractors by instructing them to pay workers a minimum of $15 per hour after February 2022. Higher costs will be inflicted on the corporate sector by more federal government regulations that could be detrimental to innovation and ultimately productivity, analogous to what occurred in the late-1960s and 1970s. Lower degrees of monetary accommodation will, however, pose challenges for financial markets.
In responding to any impending inflation threat, the risks of the Fed mis-communicating future policy have been enhanced by the democratisation of the Federal Open Market Committee (FOMC).  Fed Chair Powell will need to assert leadership, but he is not immune to communication gaffes, as testified by the events of October 2018. Talk of scaling back asset purchases could begin in Q4, but much will depend on the rate of labour market healing over the next 3 months.

Hitherto, the recovery in US economic activity since 2020 H1 should not have imparted sufficient strains on the labour market or capital stock to produce sustained inflationary pressures. Fiscal and monetary stimulus have spooked markets into expecting rising inflation, but the spike in April is firmly at odds with historic experiences during the early stage of an economic recovery.
Rising service sector activity has boosted prices for this important component within the consumer price index (CPI), as effective capacity struggles to keep pace with increased consumer spending. Goods inflation, notably for autos, has also risen due to supply constraints, but upward pressure on automotive prices could be sustained due to lingering production problems and low inventories.
Rising US import prices for industrial supplies reflect dislocations where production has failed to keep pace with strong US domestic demand. Tight shipping capacity has produced unprecedented freight rates from Asia to the US that are being passed onto customers via higher prices.
The Biden Administration has begun to impose higher wage costs on companies who act as federal government contractors by instructing them to pay workers a minimum of $15 per hour after February 2022. Higher costs will be inflicted on the corporate sector by more federal government regulations that could be detrimental to innovation and ultimately productivity, analogous to what occurred in the late-1960s and 1970s. Lower degrees of monetary accommodation will, however, pose challenges for financial markets.
In responding to any impending inflation threat, the risks of the Fed mis-communicating future policy have been enhanced by the democratisation of the Federal Open Market Committee (FOMC).  Fed Chair Powell will need to assert leadership, but he is not immune to communication gaffes, as testified by the events of October 2018. Talk of scaling back asset purchases could begin in Q4, but much will depend on the rate of labour market healing over the next 3 months.  

US Monetary Policy Outlook: Fed Faces Challenges from Regulatory-Induced Inflation

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

U.S. Equity Strategy: Small-Caps Re-Emerging As Leadership

We continue to see compelling signals that suggest risk appetites are improving, which is bullish for the broad market. As a result, we are moving...

Vermilion Research

Bonds: All Charts Lead to Me

As we look across financial markets, there is an increasing degree of conviction that higher [US] bond prices and lower yields are likely to be...

Shyam Devani

Trade Levels in Asia and the Risk Pivot in SPX

A 50 long from 16,500 and add call above 17,700 is playing out nicely and we outlined dip support ahead of reaching for the 19,000 target. SPX...

Thomas Schroeder

U.S. Equity Strategy: Growth Improving, But Can It Last?

We continue to see a mixed market environment, but we remain constructive overall with the S&P 500 holding above short-term support at the 50-day...

Vermilion Research

US Monetary Policy Outlook: Fed Faces Challenges from Regulatory-Induced Inflation

US inflation spiked in April due to factors the Fed believes are transitory. The Biden Administration has already started boosting wage costs, a...

DeSaque Macro Research