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

Stocks Highlighted: WFC, COF, DFS, GS, JEF, RJF, LIN, ALB, AKZOY, OLN, CC, CDAY, RHI, MAN, TNET, ASGN, NSP, TBI, KELYA, BBSI, DHX, BGSF, AMN, and CCRN.Cyclical value areas are starting to play catch-up as interest rates show signs of bottoming -- all kickstarted by Friday's better-than-expected employment report. We see many actionable opportunities, particularly within the Financial and Materials Sectors, and also several retail stocks within Consumer Discretionary. As we noted last week, despite mixed signals from the market, there continues to be an absence of breakdowns at the index and Sector level which supports our overall constructive outlook.

Stocks Highlighted: WFC, COF, DFS, GS, JEF, RJF, LIN, ALB, AKZOY, OLN, CC, CDAY, RHI, MAN, TNET, ASGN, NSP, TBI, KELYA, BBSI, DHX, BGSF, AMN, and CCRN.Cyclical value areas are starting to play catch-up as interest rates show signs of bottoming -- all kickstarted by Friday's better-than-expected employment report. We see many actionable opportunities, particularly within the Financial and Materials Sectors, and also several retail stocks within Consumer Discretionary. As we noted last week, despite mixed signals from the market, there continues to be an absence of breakdowns at the index and Sector level which supports our overall constructive outlook.

Cyclical Value Areas Improving -- Add Exposure To Financials, Materials

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> wowed investors last week by beating market estimates with record revenue and it’s first ever legitimate profit generated mostly from its actual operations for the second quarter.Is this sustainable? Unclear. Tesla remained foggy about guidance and CEO Elon Musk warned that the critical chip shortage was a “serious problem” that could impair forward results. Musk also volunteered that Tesla’s pricey FSD option was not a “compelling value” until they “make it work” at some point, so he could justify its current $10,000 price or $199 monthly subscription.In the meantime, however, Tesla’s credit metrics are better than ever now that it’s operations prove they actually can make money.So Tesla may be planning a large bond deal to refinance its expensive 5.3% notes.

Tesla Motors (TSLA US) wowed investors last week by beating market estimates with record revenue and it’s first ever legitimate profit generated mostly from its actual operations for the second quarter.Is this sustainable? Unclear. Tesla remained foggy about guidance and CEO Elon Musk warned that the critical chip shortage was a “serious problem” that could impair forward results. Musk also volunteered that Tesla’s pricey FSD option was not a “compelling value” until they “make it work” at some point, so he could justify its current $10,000 price or $199 monthly subscription.In the meantime, however, Tesla’s credit metrics are better than ever now that it’s operations prove they actually can make money.So Tesla may be planning a large bond deal to refinance its expensive 5.3% notes.

Tesla's Car Business Finally Turned A Profit. Really. Time For A Big Bond Deal

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. 

Well defined flat range breakout points in the SPX and DJI call for an exhaustive push to register a minor new SPX high before the next pullback cycle. Trendline support at 4,370 is the risk inflection support.SPX daily RSI has room to push to the 70 sell zone that sets up a top. The intraday chart pattern shows breakout points at 4,370 and 4,420. Flat ranges typically break to the upside.SPX rise toward 4,430-50 at the top end of the range where risk to reward turns less favorable in August when seasonality bends to bearish.

Well defined flat range breakout points in the SPX and DJI call for an exhaustive push to register a minor new SPX high before the next pullback cycle. Trendline support at 4,370 is the risk inflection support.SPX daily RSI has room to push to the 70 sell zone that sets up a top. The intraday chart pattern shows breakout points at 4,370 and 4,420. Flat ranges typically break to the upside.SPX rise toward 4,430-50 at the top end of the range where risk to reward turns less favorable in August when seasonality bends to bearish.

SPX Flat Range Push and Risk Break Points

Advanced Micro Devices / Technical Analysis

The market continues to send mixed signals and we remain cautious and selective, preferring large-caps over small-caps, growth over value, and defensives (Utilities, Staples, REITs, Health Care) over cyclical value (Energy, Materials, Manufacturing, Transportation, Financials). While market dynamics suggest a 5-15% pullback is in the cards, there continues to be an absence of breakdowns at the index and Sector level; even the weaker Sectors such as Energy and Transportation are not yet breaking down. Until we start to see breakdowns at the Sector and index level, we remain constructive overall.

The market continues to send mixed signals and we remain cautious and selective, preferring large-caps over small-caps, growth over value, and defensives (Utilities, Staples, REITs, Health Care) over cyclical value (Energy, Materials, Manufacturing, Transportation, Financials). While market dynamics suggest a 5-15% pullback is in the cards, there continues to be an absence of breakdowns at the index and Sector level; even the weaker Sectors such as Energy and Transportation are not yet breaking down. Until we start to see breakdowns at the Sector and index level, we remain constructive overall.

U.S. Equity Strategy: Buying Semiconductors, Auto Dealers, and Asset Mgmt/Custody Banks

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

While the FOMC formally maintains an accommodative stance (including the promised purchase of US$120 billion worth of bonds monthly), the US monetary base has declined by US$15 billion between April and June 2021. Despite this stealth taper of the monetary base, M2 was still up 11.1% YoY in June 2021 -- faster than the fastest pace of M2 growth reached during QE1 and QE2 (10.4% YoY in January 2009 and January 2012) -- despite the high base of 20.6-27% YoY growth in M2 during April 2020-March 2021.  The excessively rapid pace of monetary growth inevitably is contributing to inflation: the broadest measure, the GDP deflator, was up 6%QoQsaar in 2Q 2021, core PCE inflation was 6.1% and PCE inflation was 6.4% annualized in 2Q 2021. The YoY pace of core-PCE inflation (3.5% in June) and core CPI inflation (4.5%) are at 29-year highs, but do not yet reflect the impact of soaring house prices on OERs and rental rates: the Case-Shiller 20-city house price index was up 17% YoY in May 2021 (the fastest in its 30 year history), which will inevitably seep into the consumer inflation gauges during the course of 2H 2021. To pretend housing inflation is transitory is fatuous.  In the second half of July, the US overtook Indonesia for the dubious distinction of the country with the highest number of new Covid cases globally (569K in the last week of July, 400K in the previous week). But the 7-day moving average (80K) is still less than a third the new daily cases the US was reporting at the peak (11 January 2021), and nearly half the US population has been fully vaccinated. ISM manufacturing for July (with the PMI at 59.5 and new orders at 64.9, both still suggesting spectacular growth but 1.1 points lower than June) suggests a very mild impact from this second Covid wave: real GDP will decelerate in 2H 2021, but (having already surpassed pre-Covid levels) will continue to grow faster than the US economy's potential growth, keeping the pressure on inflation. We note that taper has already begun, but will have to be formally acknowledged by the November FOMC meeting, as inflation continues to print well above the 3% YoY mark for the rest of 2021. A premature rise in the Fed Funds is inevitable before the end of 2021, completely against the market's expectations. We would stay underweight equities.

While the FOMC formally maintains an accommodative stance (including the promised purchase of US$120 billion worth of bonds monthly), the US monetary base has declined by US$15 billion between April and June 2021. Despite this stealth taper of the monetary base, M2 was still up 11.1% YoY in June 2021 -- faster than the fastest pace of M2 growth reached during QE1 and QE2 (10.4% YoY in January 2009 and January 2012) -- despite the high base of 20.6-27% YoY growth in M2 during April 2020-March 2021.  The excessively rapid pace of monetary growth inevitably is contributing to inflation: the broadest measure, the GDP deflator, was up 6%QoQsaar in 2Q 2021, core PCE inflation was 6.1% and PCE inflation was 6.4% annualized in 2Q 2021. The YoY pace of core-PCE inflation (3.5% in June) and core CPI inflation (4.5%) are at 29-year highs, but do not yet reflect the impact of soaring house prices on OERs and rental rates: the Case-Shiller 20-city house price index was up 17% YoY in May 2021 (the fastest in its 30 year history), which will inevitably seep into the consumer inflation gauges during the course of 2H 2021. To pretend housing inflation is transitory is fatuous.  In the second half of July, the US overtook Indonesia for the dubious distinction of the country with the highest number of new Covid cases globally (569K in the last week of July, 400K in the previous week). But the 7-day moving average (80K) is still less than a third the new daily cases the US was reporting at the peak (11 January 2021), and nearly half the US population has been fully vaccinated. ISM manufacturing for July (with the PMI at 59.5 and new orders at 64.9, both still suggesting spectacular growth but 1.1 points lower than June) suggests a very mild impact from this second Covid wave: real GDP will decelerate in 2H 2021, but (having already surpassed pre-Covid levels) will continue to grow faster than the US economy's potential growth, keeping the pressure on inflation. We note that taper has already begun, but will have to be formally acknowledged by the November FOMC meeting, as inflation continues to print well above the 3% YoY mark for the rest of 2021. A premature rise in the Fed Funds is inevitable before the end of 2021, completely against the market's expectations. We would stay underweight equities. 

2 Months of Stealth Taper and Mild Delta-Driven Slowdown; but Inflation Still Surging

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)

Cyclical Value Areas Improving -- Add Exposure To Financials, Materials

Cyclical value areas are starting to play catch-up as interest rates show signs of bottoming. We see many actionable opportunities, particularly...

Vermilion Research

Tesla's Car Business Finally Turned A Profit. Really. Time For A Big Bond Deal

What's next for Tesla bonds after it finally reports record revenue and (gasp) it's first ever legitimate profit could be big. Really big.

Vicki Bryan

SPX Flat Range Push and Risk Break Points

Well defined range breakout points in the SPX and DJI call for an exhaustive push to register a minor new SPX high before the next pullback cycle....

Thomas Schroeder

U.S. Equity Strategy: Buying Semiconductors, Auto Dealers, and Asset Mgmt/Custody Banks

Despite our overall cautious outlook, several areas are attractive and buyable, including: Semiconductors, Auto Dealers, and Asset Management...

Vermilion Research

2 Months of Stealth Taper and Mild Delta-Driven Slowdown; but Inflation Still Surging

US base money declined by $15bn between April and June 2021, a stealth taper. House prices up 17%YoY will push up PCE inflation via OERs, & growth...

Prasenjit K. Basu