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

In last week's Int'l Compass (Sept. 2), we highlighted emerging markets (EEM-US, Shanghai Comp) and Japan (TOPIX, TOPIX Small) as areas of bullish interest, with short-term bullish inflections suggesting the tide was turning in favor of these markets. This remains the focus in today's report, and especially on Japan; bullish price inflections and breakouts have started to proliferate, which suggests this could be the start of a broad-based rally for Japan in the weeks and months ahead.

In last week's Int'l Compass (Sept. 2), we highlighted emerging markets (EEM-US, Shanghai Comp) and Japan (TOPIX, TOPIX Small) as areas of bullish interest, with short-term bullish inflections suggesting the tide was turning in favor of these markets. This remains the focus in today's report, and especially on Japan; bullish price inflections and breakouts have started to proliferate, which suggests this could be the start of a broad-based rally for Japan in the weeks and months ahead.

Buy Japan On This Breakout ; TOPIX Breaking Out To 21-Year Highs; Actionable Theme: Growth Sectors

Shanghai Stock Exchange Composite Index / Technical Analysis

While there are always exceptions at the individual stock level, MSCI Emerging Markets (EEM-US) and Japan (TOPIX, TOPIX Small) have been some of the weaker areas to invest throughout 2021. We now see early signs of positive change and we recommend adding exposure to emerging markets and Japan.

While there are always exceptions at the individual stock level, MSCI Emerging Markets (EEM-US) and Japan (TOPIX, TOPIX Small) have been some of the weaker areas to invest throughout 2021. We now see early signs of positive change and we recommend adding exposure to emerging markets and Japan.

Buying Opportunities Within Emerging Markets and Japan; US Dollar Failing At 93.50

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

The semiconductor market reached record revenues in June.  Much of this has been driven by a mild shortage in semiconductor memories, DRAM and NAND flash, but the larger shortage of older technologies has also had a hand in this.

The semiconductor market reached record revenues in June.  Much of this has been driven by a mild shortage in semiconductor memories, DRAM and NAND flash, but the larger shortage of older technologies has also had a hand in this.

June Semiconductor Revenues Reach New Record

Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Equity Bottom-Up

Mizuho Financial Group / Equity Bottom-Up

On Monday 23 August, Mizuho Bank suffered its 6th systems failure so far this year.  This time, some 130 of its around 5,300 ATMs stopped working for about an hour just after noon.  This comes in the wake of last Friday’s débâcle, when the bank opened its doors for business at 09:00am but none of the computer terminals at its counters nationwide would function properly.  Are these repeated systems failures simply a hardware problem, a software problem, or is the fundamental problem a more human one?
While management searches for solutions, and the inevitable finger-pointing continues, the bank’s reputation erodes.  The damage to the share price of parent company Mizuho Financial Group (8411 JP) has so far been comparatively light, but for how much longer?  MHFG has markedly underperformed its two megabank rivals <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a> and <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-group-inc" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial Group (8316 JP)</a> so far this year in a rising market, with its stock price up just +6.5% YoY against MUFG’s +34.6% and SMFG’s +21.3%, respectively.  Foreign investors still own in aggregate over 22% of MHFG’s stock, but their patience is being sorely tested.  Further revelations of systems mishaps, or punitive actions by the FSA against MHFG, may well lead to a swift exit by some shareholders; a sell-off cannot be ruled out.
Caveat Emptor! (May the Buyer Beware!) remains our advice to would-be investors in this enormous but highly volatile banking group.

On Monday 23 August, Mizuho Bank suffered its 6th systems failure so far this year.  This time, some 130 of its around 5,300 ATMs stopped working for about an hour just after noon.  This comes in the wake of last Friday’s débâcle, when the bank opened its doors for business at 09:00am but none of the computer terminals at its counters nationwide would function properly.  Are these repeated systems failures simply a hardware problem, a software problem, or is the fundamental problem a more human one?
While management searches for solutions, and the inevitable finger-pointing continues, the bank’s reputation erodes.  The damage to the share price of parent company Mizuho Financial Group (8411 JP) has so far been comparatively light, but for how much longer?  MHFG has markedly underperformed its two megabank rivals Mitsubishi UFJ Financial (MUFG) (8306 JP) and Sumitomo Mitsui Financial Group (8316 JP) so far this year in a rising market, with its stock price up just +6.5% YoY against MUFG’s +34.6% and SMFG’s +21.3%, respectively.  Foreign investors still own in aggregate over 22% of MHFG’s stock, but their patience is being sorely tested.  Further revelations of systems mishaps, or punitive actions by the FSA against MHFG, may well lead to a swift exit by some shareholders; a sell-off cannot be ruled out.
Caveat Emptor! (May the Buyer Beware!) remains our advice to would-be investors in this enormous but highly volatile banking group.

Mizuho Financial Group (8411 JP):  Systemic Failures - A Human Factor?

Gotōbi (or 五十日 in Japanese) is any date with a ‘5’ or a ‘0’ in it.  In Japan, traditionally, it is a day when money owed is collected and accounts due are settled.  Fridays are always busy days commercially, but when Friday is also a gotōbi things get particularly hectic.  It is a busy day for the banks, too, with a noticeable rise in customer visits to branches and a surge in across-counter transactions, especially in cash and securities.Last Friday, 20th August 2021, was a gotōbi. Imagine, then, the horror that seized bank staff at all 450+ branches of Mizuho Bank (not to mention at its sister organisation Mizuho Trust Bank, where the same thing happened), as 09:00am bank opening time approached, customers were queuing up, and they realised that none of the computer terminals at their counters were working.  None of them; nationwide.Curiously, all the ATMs (source of two previous systems failures) were working normally, as was Mizuho Bank’s Internet banking platform, ‘Mizuho Direct’.  By 10:00am on Friday, most operations were back up and running (except for some foreign currency remittances) and by midday all systems appear to have returned to normal operation.  Management is still trying to establish the cause of the glitch.This now makes the 5th time in 2021 that Mizuho Bank, the principal commercial banking subsidiary of megabank holding company <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a> (MHFG), has had a systems failure.  That it happened on a gotōbi was embarrassing enough in view of the inconvenience to the many customers visiting the bank’s branches at the time.  Doubly embarrassing for management, inspectors from the Financial Services Agency (FSA) were in the process of winding-up their detailed and long inspection of the bank over the four previous systems malfunctions, with a view to deciding whether the bank should be disciplined for the successive failures through the issuance of a Business Correction Order.  That issuance would now seem to be an inevitability.  A formal demand for a detailed report into the incident (報告微求命令 or hōkoku bikyū meirei in Japanese) has already been issued by the FSA to Mizuho Trust Bank as well as to the parent MHFG.Senior management clearly has much to do in the wake of this latest incident to restore Mizuho’s reputation among customers as a brand that is synonymous with reliability.As we have said in past Smartkarma Insights, MHFG’s lack of consistency, either in profit generation or management execution, makes this a difficult stock to recommend on fundamentals.  This latest systems débâcle will not improve its already battered reputation.  MHFG has time and again promised much but then has either failed to deliver or has surprised the market with sudden sweeping changes in strategy, requiring long time-horizons for implementation and where ultimately delivering value remains frustratingly elusive.Caveat Emptor! (May the Buyer Beware!) remains our advice to would-be investors in this enormous but highly volatile banking group.

Gotōbi (or 五十日 in Japanese) is any date with a ‘5’ or a ‘0’ in it.  In Japan, traditionally, it is a day when money owed is collected and accounts due are settled.  Fridays are always busy days commercially, but when Friday is also a gotōbi things get particularly hectic.  It is a busy day for the banks, too, with a noticeable rise in customer visits to branches and a surge in across-counter transactions, especially in cash and securities.Last Friday, 20th August 2021, was a gotōbi. Imagine, then, the horror that seized bank staff at all 450+ branches of Mizuho Bank (not to mention at its sister organisation Mizuho Trust Bank, where the same thing happened), as 09:00am bank opening time approached, customers were queuing up, and they realised that none of the computer terminals at their counters were working.  None of them; nationwide.Curiously, all the ATMs (source of two previous systems failures) were working normally, as was Mizuho Bank’s Internet banking platform, ‘Mizuho Direct’.  By 10:00am on Friday, most operations were back up and running (except for some foreign currency remittances) and by midday all systems appear to have returned to normal operation.  Management is still trying to establish the cause of the glitch.This now makes the 5th time in 2021 that Mizuho Bank, the principal commercial banking subsidiary of megabank holding company Mizuho Financial Group (8411 JP) (MHFG), has had a systems failure.  That it happened on a gotōbi was embarrassing enough in view of the inconvenience to the many customers visiting the bank’s branches at the time.  Doubly embarrassing for management, inspectors from the Financial Services Agency (FSA) were in the process of winding-up their detailed and long inspection of the bank over the four previous systems malfunctions, with a view to deciding whether the bank should be disciplined for the successive failures through the issuance of a Business Correction Order.  That issuance would now seem to be an inevitability.  A formal demand for a detailed report into the incident (報告微求命令 or hōkoku bikyū meirei in Japanese) has already been issued by the FSA to Mizuho Trust Bank as well as to the parent MHFG.Senior management clearly has much to do in the wake of this latest incident to restore Mizuho’s reputation among customers as a brand that is synonymous with reliability.As we have said in past Smartkarma Insights, MHFG’s lack of consistency, either in profit generation or management execution, makes this a difficult stock to recommend on fundamentals.  This latest systems débâcle will not improve its already battered reputation.  MHFG has time and again promised much but then has either failed to deliver or has surprised the market with sudden sweeping changes in strategy, requiring long time-horizons for implementation and where ultimately delivering value remains frustratingly elusive.Caveat Emptor! (May the Buyer Beware!) remains our advice to would-be investors in this enormous but highly volatile banking group.

Mizuho Financial Group (8411 JP):  Gotohbi Gremlins

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Buy Japan On This Breakout ; TOPIX Breaking Out To 21-Year Highs; Actionable Theme: Growth Sectors

Japan (TOPIX, TOPIX Small) was a big focus for us last week, and it remains the focus in today's report; this could be the start of a broad-based...

Vermilion Research

Buying Opportunities Within Emerging Markets and Japan; US Dollar Failing At 93.50

MSCI Emerging Markets (EEM-US) and Japan (TOPIX, TOPIX Small) have been some of the weaker areas to invest throughout 2021. We now see early signs...

Vermilion Research

June Semiconductor Revenues Reach New Record

Semiconductor revenues are breaking historic records. Can this trend continue? Trend analysis indicates that it should end. We will be watching...

Jim Handy

Mizuho Financial Group (8411 JP): Systemic Failures - A Human Factor?

Mizuho Bank has now had 6 systems failures so far this year. Are these repeated systems failures simply a hardware problem, a software problem, or...

J. Brian Waterhouse

Mizuho Financial Group (8411 JP): Gotohbi Gremlins

Mizuho Bank has suffered its 5th systems failure so far this year, and the FSA is not amused. Neither should shareholders be. Caveat Emptor! (May...

J. Brian Waterhouse

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