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>Our long-term outlook remains bullish as long as the S&amp;P 500 remains above 5770-5850 and 5600-5670 (worst case), and we are buyers at these levels.</li>
<li>With that said, we see potential for near-term downside based on several developments discussed below.  It likely means at least another 2-4 weeks of consolidation</li>
<li>If SPX remains below 6100 and 6150 resistances, do not be surprised if there is a test of the bottom of the range at either 5770-5850 or 5600-5670</li>
</ul>


Our long-term outlook remains bullish as long as the S&amp;P 500 remains above 5770-5850 and 5600-5670 (worst case), and we are buyers at these levels.
With that said, we see potential for near-term downside based on several developments discussed below.  It likely means at least another 2-4 weeks of consolidation
If SPX remains below 6100 and 6150 resistances, do not be surprised if there is a test of the bottom of the range at either 5770-5850 or 5600-5670


Near-Term Downside Likely Following False Breakouts; Targeting 5770-5850; Long-Term Still Bullish

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

Korea Stock Exchange KOSPI 200 / Equity Derivatives

<ul>
<li>The United States' tariff against Mexico and Canada, effective March 4, 2025, could disrupt global markets, with potential volatility spikes similar to early February's events.</li>
<li>
<a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200</a> and <a href="https://www.smartkarma.com/entities/ftse-100-index-ukx" target="_blank" data-smartkarma-citation="entities:22904:1" rel="noopener">FTSE 100</a>: low implied volatility offers opportunities for protective puts, </li>
<li>
<a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>: an volatility premium suggests a relative value volatility arbitrage play. </li>
</ul>


The United States' tariff against Mexico and Canada, effective March 4, 2025, could disrupt global markets, with potential volatility spikes similar to early February's events.

S&amp;P/ASX 200 and FTSE 100: low implied volatility offers opportunities for protective puts, 

KOSPI 200 and Nikkei 225: an volatility premium suggests a relative value volatility arbitrage play. 


Global Option Implied Volatility - Opportunities in S&P/ASX 200, KOSPI 200, Nikkei 225, FTSE 100.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mixue-group" target="_blank" data-smartkarma-citation="entities:40623:1" rel="noopener">Mixue Group (MIX HK)</a> has priced its IPO at HK$202.5/share and will raise up to HK$3.97bn (US$511m) if the oversubscription option is exercised, valuing the company at HK$76.35bn (US$9.8bn).</li>
<li>Despite a US$10bn market cap, the stock will find it difficult to be added to global and local indices since 60% of the shares are unlisted.</li>
<li>The stock is likely to remain in the shadows for one global index and could be added to the other in December. HSCI inclusion could take place in September.</li>
</ul>



Mixue Group (MIX HK) has priced its IPO at HK$202.5/share and will raise up to HK$3.97bn (US$511m) if the oversubscription option is exercised, valuing the company at HK$76.35bn (US$9.8bn).
Despite a US$10bn market cap, the stock will find it difficult to be added to global and local indices since 60% of the shares are unlisted.
The stock is likely to remain in the shadows for one global index and could be added to the other in December. HSCI inclusion could take place in September.


MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices

ZhongAn Online P&C Insurance C / Index Rebalance

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> replaces <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> in March.</li>
<li>In a surprise, <a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> will be added and <a href="https://www.smartkarma.com/entities/zhongan-online-p-c-insurance-c" target="_blank" data-smartkarma-citation="entities:23681:1" rel="noopener">ZhongAn Online P&amp;C Insurance C (6060 HK)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> is also an inclusion to the HSIII Index and HSCI Index and will be added to Southbound Stock Connect in May.</li>
</ul>


As expected, Horizon Robotics (9660 HK) replaces East Buy Holding (1797 HK) in the Hang Seng TECH Index (HSTECH INDEX) in March.
In a surprise, Tencent Music Entertainment Group (1698 HK) will be added and ZhongAn Online P&amp;C Insurance C (6060 HK) will be deleted.

Horizon Robotics (9660 HK) is also an inclusion to the HSIII Index and HSCI Index and will be added to Southbound Stock Connect in May.


HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene (6160 HK)</a> and <a href="https://www.smartkarma.com/entities/zto-express-cayman-inc" target="_blank" data-smartkarma-citation="entities:33488:1" rel="noopener">ZTO Express Cayman (2057 HK)</a> will replace <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK)</a> and <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> at the close on 7 March.</li>
<li>Estimated one-way turnover at the rebalance is 5% resulting in a round-trip trade of HK$6.4bn (US$825m). The final capping will use the close of trading on 4 March.</li>
<li>
<a href="https://www.smartkarma.com/entities/zto-express-cayman-inc" target="_blank" data-smartkarma-citation="entities:33488:1" rel="noopener">ZTO Express Cayman (2057 HK)</a> is also an inclusion to a global index with implementation scheduled for the close on 21 March.</li>
</ul>



BeiGene (6160 HK) and ZTO Express Cayman (2057 HK) will replace Sino Biopharmaceutical (1177 HK) and Li Ning (2331 HK) in the HSCEI INDEX at the close on 7 March.
Estimated one-way turnover at the rebalance is 5% resulting in a round-trip trade of HK$6.4bn (US$825m). The final capping will use the close of trading on 4 March.

ZTO Express Cayman (2057 HK) is also an inclusion to a global index with implementation scheduled for the close on 21 March.


HSCEI Index Rebalance: Beigene, ZTO Replace Sino Biopharma, Li Ning; Surprise for Some

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

Near-Term Downside Likely Following False Breakouts; Targeting 5770-5850; Long-Term Still Bullish

Near-Term Downside Likely After False Breakouts $SPX $QQQ; Long-Term Still Bullish; Major Tops on $DXY, 10-Year Treasury Yield. If < 6100 and 6150...

Vermilion Research

Global Option Implied Volatility - Opportunities in S&P/ASX 200, KOSPI 200, Nikkei 225, FTSE 100.

US tariffs on Mexico and Canada effective 4 March as a potentially adverse market event. S&P/ASX 200 and FTSE 100 offer protective put opportunities.

Gaudenz Schneider

MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices

MIXUE is looking to raise up to US$511m in its IPO. Large allocation to cornerstone investors and more than half the market cap in unlisted shares...

Brian Freitas

HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Horizon Robotics and TME replace East Buy and Za Online. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of...

Brian Freitas

HSCEI Index Rebalance: Beigene, ZTO Replace Sino Biopharma, Li Ning; Surprise for Some

Beigene and ZTO Express replace Li Ning and Sino Biopharma in the index. Yum China misses out, so Sunny Optical stays in the index. ZTO Express is...

Brian Freitas

Near-Term Downside Likely Following False Breakouts; Targeting 5770-5850; Long-Term Still Bullish

Near-Term Downside Likely After False Breakouts $SPX $QQQ; Long-Term Still Bullish; Major Tops on $DXY, 10-Year Treasury Yield. If < 6100 and 6150...

Vermilion Research

Global Option Implied Volatility - Opportunities in S&P/ASX 200, KOSPI 200, Nikkei 225, FTSE 100.

​US tariffs on Mexico and Canada effective 4 March as a potentially adverse market event. S&P/ASX 200 and FTSE 100 offer protective put opportunities.

Gaudenz Schneider

MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices

MIXUE is looking to raise up to US$511m in its IPO. Large allocation to cornerstone investors and more than half the market cap in unlisted shares...

Brian Freitas

HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Horizon Robotics and TME replace East Buy and Za Online. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of...

Brian Freitas

HSCEI Index Rebalance: Beigene, ZTO Replace Sino Biopharma, Li Ning; Surprise for Some

Beigene and ZTO Express replace Li Ning and Sino Biopharma in the index. Yum China misses out, so Sunny Optical stays in the index. ZTO Express is...

Brian Freitas

US tariffs on Mexico and Canada effective 4 March as a potentially adverse market event. S&P/ASX 200 and FTSE 100 offer protective put opportunities.