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

<ul>
<li>Our bottom line is that we could not be bearish as long as the IWM is above $208, the IWC is above $134-$135, and the S&amp;P 500 is above 4495.</li>
<li>These support levels have held strong, and we are now seeing the aforementioned risk-off signals starting to abate.</li>
<li>This is an encouraging sign and we remain constructive as long as the above support levels hold.</li>
</ul>


Our bottom line is that we could not be bearish as long as the IWM is above $208, the IWC is above $134-$135, and the S&amp;P 500 is above 4495.
These support levels have held strong, and we are now seeing the aforementioned risk-off signals starting to abate.
This is an encouraging sign and we remain constructive as long as the above support levels hold.


Risk-Off Signals Abating; Cyclicals Reassert as Rates Rise; Buying Fertilizer and Copper Stocks

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.</li>
<li>As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.</li>
<li>Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.</li>
</ul>


The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.
As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.
Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.


Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

<ul>
<li>Market dynamics continue to deteriorate and there are plenty of reasons to be concerned, which we outline below.</li>
<li>With that said, the bottom line is that the Russell 2000 index (IWM) is above $208 support and the Russell Micro Caps index (IWC) is above $135 support.</li>
<li>As long as these supports hold we expect more consolidation and mixed markets ahead, but we would turn bearish on breakdowns.</li>
</ul>


Market dynamics continue to deteriorate and there are plenty of reasons to be concerned, which we outline below.
With that said, the bottom line is that the Russell 2000 index (IWM) is above $208 support and the Russell Micro Caps index (IWC) is above $135 support.
As long as these supports hold we expect more consolidation and mixed markets ahead, but we would turn bearish on breakdowns.


Supports Holding Despite Concerning Developments; Semis & Home Improvement Retailers Attractive

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<ul>
<li>This year started with curves steepening across EM following the US. However, as the year progressed, central banks in many countries embarked on aggressive rate hikes, leading to curve flattening.</li>
<li>The flattening may have gone too far in some countries as growth and inflationary pressures should start easing from the lagged effect of monetary tightening, leading to bullish steepening.</li>
<li>The short end should start pricing in eventual rate cuts in a few countries, while the risk premium in the long end should persist because of the pandemic-driven fiscal deterioration.</li>
</ul>


This year started with curves steepening across EM following the US. However, as the year progressed, central banks in many countries embarked on aggressive rate hikes, leading to curve flattening.
The flattening may have gone too far in some countries as growth and inflationary pressures should start easing from the lagged effect of monetary tightening, leading to bullish steepening.
The short end should start pricing in eventual rate cuts in a few countries, while the risk premium in the long end should persist because of the pandemic-driven fiscal deterioration.


2022 High Conviction: Thematic Rate Curve Steepening Trades in EM

<ul>
<li>With the market struggling to price in the Fed’s likely monetary tightening path, US rates have become quite volatile and likely to stay that way in the near term.</li>
<li>With US rates volatility rising, it has spilled over to other markets, particularly EM rates whose correlation with the US has increased considerably even on an individual country basis.</li>
<li>Typically, increased volatility in EM rates results in more trading opportunities because it leads to greater differentiation within EM. This time around, that has generally not been the case.</li>
</ul>


With the market struggling to price in the Fed’s likely monetary tightening path, US rates have become quite volatile and likely to stay that way in the near term.
With US rates volatility rising, it has spilled over to other markets, particularly EM rates whose correlation with the US has increased considerably even on an individual country basis.
Typically, increased volatility in EM rates results in more trading opportunities because it leads to greater differentiation within EM. This time around, that has generally not been the case.


Higher Correlation with US Yields but Less Differentiation Within EM Rates

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US Treasury (10 Yr Generic) (GT10 GOVT)

Risk-Off Signals Abating; Cyclicals Reassert as Rates Rise; Buying Fertilizer and Copper Stocks

Risk-off signals are abating which is an encouraging sign. Charts Highlighted: IWM, IWC, JETS, BAM, CBRE, INVH, JLL, HHC, JOE, MMI, APTS, CTO, AMT,...

Vermilion Research

Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

As long as the Russell 2000 index (IWM) is above $208, the Russell Micro Caps index (IWC) is above $134-$135, and the S&P 500 is above 4495, we...

Vermilion Research

Supports Holding Despite Concerning Developments; Semis & Home Improvement Retailers Attractive

Market dynamics continue to deteriorate and there are plenty of reasons to be concerned. However, the bottom line is that Russell 2000 (IWM) is...

Vermilion Research

2022 High Conviction: Thematic Rate Curve Steepening Trades in EM

As a broad theme for 2022, I expect rate curves across EM to steepen. The curve flattening may have gone too far as growth and inflation should...

Gautam Jain, PhD, CFA

Higher Correlation with US Yields but Less Differentiation Within EM Rates

Higher US volatility has spilled over to EM. Typically, increased volatility results in more trading opportunities because of greater...

Gautam Jain, PhD, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)