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

Last week we noted that in order for us to turn bullish on the broad market, we need to see breakouts to YTD highs in small-caps (IWM), Financials (XLF), Energy (XOP), and equal-weighted Discretionary (RCD). We now have the breakout we needed in Energy (RYE, XOP), but the other areas are still consolidating. Therefore, we still see a mixed market and we remain neutral yet constructive overall.Stocks highlighted: XOP, WTI Crude Oil, IWD, IWM, S&amp;P 500, Equal-weighted Nasdaq 100 (QQEW), HLT, SEAS, DRI, PLAY, COP, EOG, PXD, OXY, DVN, CLR, CTRA, FANG, MRO, XEC, APA, AR, MUR, RRC, SWN, MTDR, PDCE, SM, BSM, CPE, VNOM, LPI, DMLP, CHX, WHD, NOA, TTI, NR, EXTN, NGS, FET, and CCLP

Last week we noted that in order for us to turn bullish on the broad market, we need to see breakouts to YTD highs in small-caps (IWM), Financials (XLF), Energy (XOP), and equal-weighted Discretionary (RCD). We now have the breakout we needed in Energy (RYE, XOP), but the other areas are still consolidating. Therefore, we still see a mixed market and we remain neutral yet constructive overall.Stocks highlighted: XOP, WTI Crude Oil, IWD, IWM, S&amp;P 500, Equal-weighted Nasdaq 100 (QQEW), HLT, SEAS, DRI, PLAY, COP, EOG, PXD, OXY, DVN, CLR, CTRA, FANG, MRO, XEC, APA, AR, MUR, RRC, SWN, MTDR, PDCE, SM, BSM, CPE, VNOM, LPI, DMLP, CHX, WHD, NOA, TTI, NR, EXTN, NGS, FET, and CCLP

Upgrading Energy To Overweight; WTI Crude Oil and XOP With Major Long-Term Breakouts

Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

Coal, gas and electricity prices are surging to eye-watering levels.Buyers in North Asia last week paid a staggering oil equivalent of $200/barrel for imported LNG in the spot market. Thermal coal futures in China hit an all-time high of Yuan 1,376.8 ($212.92)/mt on Wednesday. Gas prices at the Dutch TTF hub, a European benchmark, have rocketed almost 400% since the start of the year. Even US benchmark Henry Hub gas futures hit seven-year highs this week.Severe gas, coal and electricity shortages are impacting industries and households alike across large swathes of Europe and China.But how does the festering energy crisis impact oil? Brent briefly traded above $80/barrel last Wednesday but remained below that psychological mark. Once again, we are not with crude’s raging bulls, who have been calling for $90 and higher levels for this winter. We think they might be missing key ingredients of the big picture in the unfolding energy crunch

Coal, gas and electricity prices are surging to eye-watering levels.Buyers in North Asia last week paid a staggering oil equivalent of $200/barrel for imported LNG in the spot market. Thermal coal futures in China hit an all-time high of Yuan 1,376.8 ($212.92)/mt on Wednesday. Gas prices at the Dutch TTF hub, a European benchmark, have rocketed almost 400% since the start of the year. Even US benchmark Henry Hub gas futures hit seven-year highs this week.Severe gas, coal and electricity shortages are impacting industries and households alike across large swathes of Europe and China.But how does the festering energy crisis impact oil? Brent briefly traded above $80/barrel last Wednesday but remained below that psychological mark. Once again, we are not with crude’s raging bulls, who have been calling for $90 and higher levels for this winter. We think they might be missing key ingredients of the big picture in the unfolding energy crunch

Weekly Oil Views: Crude's Raging Bulls May Be Missing the Downside of Energy Crisis

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

As earlier notes outlined, US yields are on the rise again, potentially in a similar fashion to 2013 before the Fed announced its tapering of asset purchases. Back then we had what was called a “taper tantrum” where many EM currencies suffered. One of the worst hit was India. Rising yields in the US would invariably create some concern for positions in EM currencies as risk-reward parameters are re-drawn. In India’s case the picture is somewhat different to 2013 but still mixed as we look at it today. We have three areas to focus:<ul>
<li>
The Good: Foreign Exchange reserves and currency stability – Reserves today are more than twice what they were in 2013
</li>
<li>
The Bad: A stretched stock market that is in danger of seeing a short term pullback
</li>
<li>
The Ugly: The major rise taking place in energy prices. Not only is Oil about to surpass the 2018 high in Rupee terms but we must also notice the sharp rise in coal prices (and natural gas) which is going to cause a difficult period ahead for many people and dent India’s recovery path, even if only temporarily.
</li>
</ul>The judgement call here is that this is not going to be a repeat of 2013 for India. The short term is concerning while the longer-term outlook may not be as bad. Watch for a pullback in in the Nifty, probably by 1,000 points, and a further slip in INR and then for signs of stabilisation and possible opportunities to re-engage.

As earlier notes outlined, US yields are on the rise again, potentially in a similar fashion to 2013 before the Fed announced its tapering of asset purchases. Back then we had what was called a “taper tantrum” where many EM currencies suffered. One of the worst hit was India. Rising yields in the US would invariably create some concern for positions in EM currencies as risk-reward parameters are re-drawn. In India’s case the picture is somewhat different to 2013 but still mixed as we look at it today. We have three areas to focus:

The Good: Foreign Exchange reserves and currency stability – Reserves today are more than twice what they were in 2013


The Bad: A stretched stock market that is in danger of seeing a short term pullback


The Ugly: The major rise taking place in energy prices. Not only is Oil about to surpass the 2018 high in Rupee terms but we must also notice the sharp rise in coal prices (and natural gas) which is going to cause a difficult period ahead for many people and dent India’s recovery path, even if only temporarily.

The judgement call here is that this is not going to be a repeat of 2013 for India. The short term is concerning while the longer-term outlook may not be as bad. Watch for a pullback in in the Nifty, probably by 1,000 points, and a further slip in INR and then for signs of stabilisation and possible opportunities to re-engage.

Emerging out of the August doldrums, crude rallied through September, with benchmark Brent futures vaulting above $78/barrel, levels not seen in almost three years.NYMEX WTI lagged, ending at two-and-half month highs.We believe Brent futures at their current levels have baked in the immediate bullish influences and will soon meet resistance. At the same time, we see only a modest pullback.For the next three months, we feel the current optimism over global economic and oil demand recovery regaining strong momentum discounts the downside risks.

Emerging out of the August doldrums, crude rallied through September, with benchmark Brent futures vaulting above $78/barrel, levels not seen in almost three years.NYMEX WTI lagged, ending at two-and-half month highs.We believe Brent futures at their current levels have baked in the immediate bullish influences and will soon meet resistance. At the same time, we see only a modest pullback.For the next three months, we feel the current optimism over global economic and oil demand recovery regaining strong momentum discounts the downside risks.

Bulls & Bears: Near- And Short-Term View on Oil Prices

<a target="_blank">Markets across the board appear to be returning to a reflationary stance, especially now that we have finally seen some decent activity in US Treasuries.</a>Considering Oil is making new trend highs and the worse-than-expected data in the US already likely to be behind us, it does appear that the catalysts for a turn in Bonds are in place. US 10Y yield looks likely to make it to 1.70% while 30Y yield to at least 2.26% if not 2.40%+ again.Longer-term charts that look at the US yield curve and estimate how steep it can go. These charts suggest that we could be on verge of a very significant uptrend in yields that takes us far beyond the highs posted earlier this year.

Markets across the board appear to be returning to a reflationary stance, especially now that we have finally seen some decent activity in US Treasuries.Considering Oil is making new trend highs and the worse-than-expected data in the US already likely to be behind us, it does appear that the catalysts for a turn in Bonds are in place. US 10Y yield looks likely to make it to 1.70% while 30Y yield to at least 2.26% if not 2.40%+ again.Longer-term charts that look at the US yield curve and estimate how steep it can go. These charts suggest that we could be on verge of a very significant uptrend in yields that takes us far beyond the highs posted earlier this year. 

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

Upgrading Energy To Overweight; WTI Crude Oil and XOP With Major Long-Term Breakouts

Recent developments lead us to believe that Energy is likely to outperform moving forward: WTI crude oil is breaking above $77, and the RYE and XOP...

Vermilion Research

Weekly Oil Views: Crude's Raging Bulls May Be Missing the Downside of Energy Crisis

We are not with crude’s raging bulls, who have been calling for $90 and higher levels for this winter. We think they might be missing key...

Vandana Hari

India: The Good, The Bad, and the Ugly

India shows three distinct yet inter-related markets: FX Reserves, the Stock market, and Energy. Together they seem to present short term risks as...

Shyam Devani

Bulls & Bears: Near- And Short-Term View on Oil Prices

Brent futures at a near 3-year-high settle of $78.09 on Sep 24 are overbought. Meanwhile, beware the echo chamber of $80+ prices for Q4 2021/Q1...

Vandana Hari

The Major Turn in Bonds

US Yields are on the rise again and this time we see indications that a significant trend is on the horizon that could take us beyond the highs in...

Shyam Devani

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