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

<p>Last week's FOMC announcement was more hawkish than expected, and the market took the news in stride. Market dynamics have improved significantly since the announcement, which has us inching toward an outright bullish outlook; we are just waiting for price breakouts from cyclical areas including small-caps (IWM), Financials (XLF), and Energy (XOP).</p><p>Charts highlighted: <strong>COP, EOG, DVN, </strong><span><strong>CLR, FANG, MRO, XEC, COG, AR, MUR, USB, PNC, FITB, KEY, RF, CMA, SIVB, WAL, EWBC, ZION, PACW, UMPQ, FHB, </strong>and <strong>CATY.</strong></span></p>

Last week's FOMC announcement was more hawkish than expected, and the market took the news in stride. Market dynamics have improved significantly since the announcement, which has us inching toward an outright bullish outlook; we are just waiting for price breakouts from cyclical areas including small-caps (IWM), Financials (XLF), and Energy (XOP).Charts highlighted: COP, EOG, DVN, CLR, FANG, MRO, XEC, COG, AR, MUR, USB, PNC, FITB, KEY, RF, CMA, SIVB, WAL, EWBC, ZION, PACW, UMPQ, FHB, and CATY.

10-Yr Treasury Yield Breaking Out; Downgrading U.S. Consumer Staples and Utilities To Underweight

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. 

Korea Stock Exchange KOSPI 200 / Technical Analysis

<p>Monday's turn call to sell down longs and put on additional shorts panned out. Now we are positioning for a mild bounce into the month/quarter end to lean on shorts. October still expected to see another leg down. Bigger cycle date comes in near October 7-8th.</p><p>Top shorts in Asia are Korea (due to undershoot on the back of SEC) and HSI (nearing a low) and Taiwan as the recent addition to our short conviction group.</p><p>A50 flirting with big breakout resistance at 15,500 and will drive H share direction. A shares show potential to buck the region negative trend if the A50 clears 15,500 pivot.</p>

Monday's turn call to sell down longs and put on additional shorts panned out. Now we are positioning for a mild bounce into the month/quarter end to lean on shorts. October still expected to see another leg down. Bigger cycle date comes in near October 7-8th.Top shorts in Asia are Korea (due to undershoot on the back of SEC) and HSI (nearing a low) and Taiwan as the recent addition to our short conviction group.A50 flirting with big breakout resistance at 15,500 and will drive H share direction. A shares show potential to buck the region negative trend if the A50 clears 15,500 pivot.

SPX Trendline Rejection/Asia Short Targets

US Treasury (10 Yr Generic) / Technical Analysis

<div>We have been bullish yield from early August with the US 10yr meeting our 1.50/55%  tactical target where a stall is due before resuming the yield rise. US 5yr yield exhibits a more aggressive bull wedge. </div><div></div><div>This yield spike is a key input into a DXY drive to and top near the 94 zone. A yield breakout above 1.55% would be more dollar supportive.</div><div></div><div>Headwinds: Equity weakness in October would induce a yield pullback from noted resistance points. Tamer inflation data would also be a driving force. </div><div></div><div>Yields will find it harder to rise in late Q4 given odds of a rate hike delay (shift to 2022) on slower growth and growing concern of a policy mistake.</div>

We have been bullish yield from early August with the US 10yr meeting our 1.50/55%  tactical target where a stall is due before resuming the yield rise. US 5yr yield exhibits a more aggressive bull wedge. This yield spike is a key input into a DXY drive to and top near the 94 zone. A yield breakout above 1.55% would be more dollar supportive.Headwinds: Equity weakness in October would induce a yield pullback from noted resistance points. Tamer inflation data would also be a driving force. Yields will find it harder to rise in late Q4 given odds of a rate hike delay (shift to 2022) on slower growth and growing concern of a policy mistake.

US Yield Spike Meeting Targets but More in Store After October Lull

<p>Our SPX pullback view from 4,500+ (reduced long exposure) is meeting our 4,400 pullback objective where we expected a tactical rally if this level holds. We are seeing more ominous pressure points build after a bounce attempt.</p><p>DJI and RTY have been our short plays from early September highs. Plan to hold these shorts as we try the long side at SPX 4,400 +/-. USD add call on September 3 (we called to buy the USD on dips) reaching for the DXY 94 PT.</p><p>Trendline and price pivot support critical to hold early this week. A break would call to press on our short group in Europe and Asia.</p><p>Bear divergence and MACD break of support stands out as a key risk- off concern.</p><p>AAII bear sentiment and sell volumes spiked on Friday (futures expiry is a likely culprit of noise).</p><p>US 10yr yield breakout above 1.37% targets 1.50%.</p><p>Not only is market breadth and divergence a problem spot but the US faces government debt ceiling jitters, workforce vaccine backlash and a bond yield push above 1.37% (inflation concerns resurface) that could add to or be a catalyst to the weak technical posture.</p><p>A key inflection point is at hand.</p>

Our SPX pullback view from 4,500+ (reduced long exposure) is meeting our 4,400 pullback objective where we expected a tactical rally if this level holds. We are seeing more ominous pressure points build after a bounce attempt.DJI and RTY have been our short plays from early September highs. Plan to hold these shorts as we try the long side at SPX 4,400 +/-. USD add call on September 3 (we called to buy the USD on dips) reaching for the DXY 94 PT.Trendline and price pivot support critical to hold early this week. A break would call to press on our short group in Europe and Asia.Bear divergence and MACD break of support stands out as a key risk- off concern.AAII bear sentiment and sell volumes spiked on Friday (futures expiry is a likely culprit of noise).US 10yr yield breakout above 1.37% targets 1.50%.Not only is market breadth and divergence a problem spot but the US faces government debt ceiling jitters, workforce vaccine backlash and a bond yield push above 1.37% (inflation concerns resurface) that could add to or be a catalyst to the weak technical posture.A key inflection point is at hand.

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<p>Yesterday's downside inflation surprise in the US yesterday led to a rally in US Treasuries. EM rates lagged the move, leading to the EM-US 10y spread rising close to its widest in a decade when adjusted for the beta. The spread has been wider twice before, both of which were during risk-off episodes. This time around, the divergence is unusual as it has not coincided with a period marked by risk aversion, rather the US rates volatility has been falling. We thus continue to find a diversified basket of EM local debt to be a better asset to own than DM rates.</p><p>Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.</p>

Yesterday's downside inflation surprise in the US yesterday led to a rally in US Treasuries. EM rates lagged the move, leading to the EM-US 10y spread rising close to its widest in a decade when adjusted for the beta. The spread has been wider twice before, both of which were during risk-off episodes. This time around, the divergence is unusual as it has not coincided with a period marked by risk aversion, rather the US rates volatility has been falling. We thus continue to find a diversified basket of EM local debt to be a better asset to own than DM rates.Separately, the attached file is a snapshot of the EM 10y rates market in which we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Rates 10y Dashboard: EM-US 10y Spread Close to the Widest in a Decade

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US Treasury (10 Yr Generic) (GT10 GOVT)

10-Yr Treasury Yield Breaking Out; Downgrading U.S. Consumer Staples and Utilities To Underweight

The 10-year Treasury yield broke above the key 1.38% resistance level last week, a bullish signal for the broad equity market and also a bullish...

Vermilion Research

SPX Trendline Rejection/Asia Short Targets

Monday's turn call to sell down longs and put on additional shorts panned out. Use a month/quarter end bounce to lean on shorts. October to see...

Thomas Schroeder

US Yield Spike Meeting Targets but More in Store After October Lull

US 10yr break above 1.37% is meeting our 1.50/55% target where a stall is due before resuming the yield rise. US 5yr yield exhibits a more...

Thomas Schroeder

SPX 4,400 Big Pivot for Global Risk

SPX pullback view from 4,500+ (reduced long exposure) is meeting our 4,400 target where we see a tactical rally if this level holds. More ominous...

Thomas Schroeder

Rates 10y Dashboard: EM-US 10y Spread Close to the Widest in a Decade

With US yields rallying following the CPI data, the spread of EM rates to the US widened further. We continue to find a diversified basket of EM...

Gautam Jain, PhD, CFA

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52-week Range

Market Cap (USDm)

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