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

<ul>
<li>As discussed in last week's Compass (9/26/23), we continue to believe the odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased </li>
<li>Our reasoning continues to be due to the major breakouts in the U.S. dollar (DXY) and Treasury yields (10- and 30-year), coupled with a handful of Sectors/indexes breaking below supports.</li>
<li>We are also monitoring 1-year uptrends on the S&amp;P 500 and Russell 2000 (IWM), currently at 4240 and $173. Flirting with breakdowns below these levels today. Buys in retail/energy shippers</li>
</ul>


As discussed in last week's Compass (9/26/23), we continue to believe the odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased 
Our reasoning continues to be due to the major breakouts in the U.S. dollar (DXY) and Treasury yields (10- and 30-year), coupled with a handful of Sectors/indexes breaking below supports.
We are also monitoring 1-year uptrends on the S&amp;P 500 and Russell 2000 (IWM), currently at 4240 and $173. Flirting with breakdowns below these levels today. Buys in retail/energy shippers


S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

<ul>
<li>Over the past two weeks, we have been steadfast in our belief that this current rally/short squeeze is likely to fizzle in the 4100-4165 area on the S&amp;P 500.</li>
<li>There has yet to be any meaningful deterioration and we cannot rule out the SPX reaching higher, potentially for 4300-4325 (August 2022 highs).</li>
<li>We continue to preach caution and believe upside is limited on the market indexes. Any combination of a continued strong labor market or hotter-than-expected inflation could upset the market.</li>
</ul>


Over the past two weeks, we have been steadfast in our belief that this current rally/short squeeze is likely to fizzle in the 4100-4165 area on the S&amp;P 500.
There has yet to be any meaningful deterioration and we cannot rule out the SPX reaching higher, potentially for 4300-4325 (August 2022 highs).
We continue to preach caution and believe upside is limited on the market indexes. Any combination of a continued strong labor market or hotter-than-expected inflation could upset the market.


Downgrading Energy; SPX Final Reach Up to 4300-4325?; Buys in Restaurants, Retailers, Industrials

<ul>
<li>The SPX, $IWM, $QQQ continue to have trouble breaking above their 200-day MAs and YTD downtrends, while the DJIA has been unable to sustain a breakout above 34,280.</li>
<li>With that said, all four of these indexes are consolidating within tight ranges just below the aforementioned resistance levels, building energy for the eventual breakdown or breakout.</li>
<li>We still recommend shifting exposure to defensives (Staples,Utilities,Health Care) and/or taking profits following this rally, but we cannot rule out potential for major upside breakouts. We discuss specific levels below.</li>
</ul>


The SPX, $IWM, $QQQ continue to have trouble breaking above their 200-day MAs and YTD downtrends, while the DJIA has been unable to sustain a breakout above 34,280.
With that said, all four of these indexes are consolidating within tight ranges just below the aforementioned resistance levels, building energy for the eventual breakdown or breakout.
We still recommend shifting exposure to defensives (Staples,Utilities,Health Care) and/or taking profits following this rally, but we cannot rule out potential for major upside breakouts. We discuss specific levels below.


Today's Fed Day to Determine Next Big Market Move? SPX Key Levels: 4100 and 3910

US Treasury (10 Yr Generic) / Technical Analysis

We are beginning to see some mild deterioration in market dynamics, including a break below the key 1.45% support level on the 10-year Treasury yield which is coupled with underperformance from small-caps and value Sectors. Still, other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market.

We are beginning to see some mild deterioration in market dynamics, including a break below the key 1.45% support level on the 10-year Treasury yield which is coupled with underperformance from small-caps and value Sectors. Still, other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market.

U.S. Equity Strategy: Shifting To Growth As 10-Yr Yield Breaks Key Support

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

United States

American Eagle Outfitters, Inc. retails men's and women's casual apparel, footwear, outerwear, and accessories.  The Company's products include jeans, khakis, T-shirts, and other similar apparel.  American Eagle operates in the United States.

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American Eagle Outfitters (AEO US)

S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

As discussed last week, we continue to believe the odds of a deeper pullback to $SPX 4165-4200/the 200-day MA have increased following major...

Vermilion Research

Downgrading Energy; SPX Final Reach Up to 4300-4325?; Buys in Restaurants, Retailers, Industrials

We have expected this squeeze to fizzle in the 4100-4165 $SPX area, but with no meaningful deterioration, we could see the $SPX reach for 4300-4325...

Vermilion Research

Today's Fed Day to Determine Next Big Market Move? SPX Key Levels: 4100 and 3910

4100 is clear resistance to watch on the $SPX, while support continues to be at 3910; this has been the range for a month. We lean breakdown below...

Vermilion Research

U.S. Equity Strategy: Shifting To Growth As 10-Yr Yield Breaks Key Support

Upgrading Technology, Downgrading Financials, Materials, and Industrials. We discuss implications of the break below the key 1.45% support level on...

Vermilion Research

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an...

Vermilion Research

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