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

MSCI Emerging Markets Index / Technical Analysis

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

Overweight EM Vs. EAFE; Dollar Weakness Continues

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Cross Asset Strategy

<ul>
<li>Our text-mined Hydrogen Economy Sentiment Indicator has trended down to negative territory recently, primarily driven by negative <a href="https://www.smartkarma.com/entities/nikola-corp" target="_blank" data-smartkarma-citation="entities:29029:1" rel="noopener">Nikola Corp (NKLA US)</a>  news flow since the September 10 short-seller report, subsequent CEO resignation and uncertainty on the GM partnership</li>
<li>As the hydrogen economy theme gathered momentum this year, platinum prices rallied along as the platinum story was reframed from "death of diesel" to "birth of hydrogen" despite uncertainties on timeframe and ultimate fuel cell platinum demand</li>
<li>Given the strong performance of pure-play hydrogen fuel cell names (such as <a href="https://www.smartkarma.com/entities/ballard-power-systems-inc" target="_blank" data-smartkarma-citation="entities:25813:1" rel="noopener">Ballard Power Systems (BLDP CN)</a> , <a href="https://www.smartkarma.com/entities/plug-power-inc" target="_blank" data-smartkarma-citation="entities:18244:1" rel="noopener">Plug Power Inc (PLUG US)</a> and Bloom Energy (BE US), we cannot argue that the theme has suffered overall from NKLA's crisis; but in the past 90 days, elevated correlations between platinum and NKLA (78%) are hard to ignore</li>
<li>We suspect closure on the GM/Nikola partnership may provide a jolt to the platinum price in either direction; as the platinum market is thin, key alternatives to the commodity include the Aberdeen Standard Platinum Shares ETF (PPLT US), Sibanye-Stillwater (SBSW US) and AngloPlats (AMS SJ)</li>
</ul><div class="content-highlight">TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </div>


Our text-mined Hydrogen Economy Sentiment Indicator has trended down to negative territory recently, primarily driven by negative Nikola Corp (NKLA US)  news flow since the September 10 short-seller report, subsequent CEO resignation and uncertainty on the GM partnership
As the hydrogen economy theme gathered momentum this year, platinum prices rallied along as the platinum story was reframed from "death of diesel" to "birth of hydrogen" despite uncertainties on timeframe and ultimate fuel cell platinum demand
Given the strong performance of pure-play hydrogen fuel cell names (such as Ballard Power Systems (BLDP CN) , Plug Power Inc (PLUG US) and Bloom Energy (BE US), we cannot argue that the theme has suffered overall from NKLA's crisis; but in the past 90 days, elevated correlations between platinum and NKLA (78%) are hard to ignore
We suspect closure on the GM/Nikola partnership may provide a jolt to the platinum price in either direction; as the platinum market is thin, key alternatives to the commodity include the Aberdeen Standard Platinum Shares ETF (PPLT US), Sibanye-Stillwater (SBSW US) and AngloPlats (AMS SJ)
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot:  Platinum Price Hostage to Nikola?

Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

<ul>
<li>Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth</li>
<li>Widespread adoption of Hydrogen considered unlikely</li>
<li>41% of Platinum &amp; 84% of Palladium reliant on autocatalyst demand</li>
<li>Hybrids in Europe up 107% in three years at 1:7 to diesel counterparts, without subsidies</li>
<li>Hybrid premium ~ 8% like-for-like over a combustion vehicle </li>
<li>Carpooling/ride-share platforms have hallmarks of being a macro-trend</li>
<li>W. Asian carpool CAGR of 77.6% over past 11 years</li>
<li>Est. by close 2019 &gt;62m people globally will utilise trans. platforms, forgoing car ownership
</li>
<li>Adverse impact on vehicle growth, models, drive-trains, R&amp;D, insurance &amp; finance </li>
<li>Logistics industry diesel transitioning will affect LT PGM demand, in particular platinum</li>
<li>Primary platinum-surplus to grow in time, downward pressure on price</li>
</ul>
Auto-catalysts make up the majority of platinums (41%) and in particular, palladium (84%) end use demand.  To determine the future demand profile for PGMs, therefore, we examined the types and likelihood of future drivetrains, as well as technologies affecting unit demand.
Hydrogen's key attraction is its potential green credentials, and if it was to ever became a reality, resultant PGM catalyst demand would outstrip all existing suppliers.  To achieve that noble aim, however, gargantuan energy resources would be needed to conduct electrolysis of water, thermodynamically, a very energy intensive process.  Our analysis concludes that hydrogen will remain a boutique industry, confined to economies with abundant hydrocarbon production, with conversion relying on steam reformation.  Overall impact of hydrogen on PGM demand, will be marginal at best.
Presently, EVs have substantial range and recharge hurdles to overcome before they could ever be a primary mode of transport for many; with global demand primarily driven by Chinese directives, not by the Western consumer.  In the short to medium-term, we do not expect EVs to impact PGM demand significantly.  However, we preface that statement by our belief that in the longer-term, the largest adopter of EVs will be within the commercial logistics sector, currently dominated by diesel power plants, which rely on a substantial amount of platinum within its auto-catalysts.  Widespread adoption of EVs and robotic drones and the replacement of traditional diesel drivetrains will only exacerbate current over-supply in platinum, in time, we forecast its price to fall substantially.
Hybrid sales are up 107% in Europe over the past three years without any state subsidies.  It is reasonable to assume that potential demand of PGMs have, and will continue to be, stymied by hybrid advances.  But we expect overall (even modest) growth in car volume sales should maintain current market dynamics, in the short to medium term.
Carpooling and a host of other transactional transport options are now a realistic, flexible and affordable life-style choice, that contradict the necessity of car ownership.  Especially among the inner-city urbanites, with Asia averaging a CAGR of 77.6% over the past decade.  Car manufacturers are already experiencing significant sales headwinds.  On average it has been found that members/fleet ratio (i.e. No. of cars divided by No. of members) range between 61 – 76, a fraction of unit demand when compared with an average Western family of three or four members, often owning two vehicles.  Using decade average regional CAGRs, projecting three years in advance, the potential number of decreased car sales globally could reach 62m by the close of 2019.  To put that into context, Volkswagen and Toyota produce between 10 to 11m  units each pa.  This raises the question of whether recent sluggish global car sales is somehow related to the almost exponential growth in carpooling/ride-share platforms?


Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth
Widespread adoption of Hydrogen considered unlikely
41% of Platinum &amp; 84% of Palladium reliant on autocatalyst demand
Hybrids in Europe up 107% in three years at 1:7 to diesel counterparts, without subsidies
Hybrid premium ~ 8% like-for-like over a combustion vehicle 
Carpooling/ride-share platforms have hallmarks of being a macro-trend
W. Asian carpool CAGR of 77.6% over past 11 years
Est. by close 2019 &gt;62m people globally will utilise trans. platforms, forgoing car ownership

Adverse impact on vehicle growth, models, drive-trains, R&amp;D, insurance &amp; finance 
Logistics industry diesel transitioning will affect LT PGM demand, in particular platinum
Primary platinum-surplus to grow in time, downward pressure on price

Auto-catalysts make up the majority of platinums (41%) and in particular, palladium (84%) end use demand.  To determine the future demand profile for PGMs, therefore, we examined the types and likelihood of future drivetrains, as well as technologies affecting unit demand.
Hydrogen's key attraction is its potential green credentials, and if it was to ever became a reality, resultant PGM catalyst demand would outstrip all existing suppliers.  To achieve that noble aim, however, gargantuan energy resources would be needed to conduct electrolysis of water, thermodynamically, a very energy intensive process.  Our analysis concludes that hydrogen will remain a boutique industry, confined to economies with abundant hydrocarbon production, with conversion relying on steam reformation.  Overall impact of hydrogen on PGM demand, will be marginal at best.
Presently, EVs have substantial range and recharge hurdles to overcome before they could ever be a primary mode of transport for many; with global demand primarily driven by Chinese directives, not by the Western consumer.  In the short to medium-term, we do not expect EVs to impact PGM demand significantly.  However, we preface that statement by our belief that in the longer-term, the largest adopter of EVs will be within the commercial logistics sector, currently dominated by diesel power plants, which rely on a substantial amount of platinum within its auto-catalysts.  Widespread adoption of EVs and robotic drones and the replacement of traditional diesel drivetrains will only exacerbate current over-supply in platinum, in time, we forecast its price to fall substantially.
Hybrid sales are up 107% in Europe over the past three years without any state subsidies.  It is reasonable to assume that potential demand of PGMs have, and will continue to be, stymied by hybrid advances.  But we expect overall (even modest) growth in car volume sales should maintain current market dynamics, in the short to medium term.
Carpooling and a host of other transactional transport options are now a realistic, flexible and affordable life-style choice, that contradict the necessity of car ownership.  Especially among the inner-city urbanites, with Asia averaging a CAGR of 77.6% over the past decade.  Car manufacturers are already experiencing significant sales headwinds.  On average it has been found that members/fleet ratio (i.e. No. of cars divided by No. of members) range between 61 – 76, a fraction of unit demand when compared with an average Western family of three or four members, often owning two vehicles.  Using decade average regional CAGRs, projecting three years in advance, the potential number of decreased car sales globally could reach 62m by the close of 2019.  To put that into context, Volkswagen and Toyota produce between 10 to 11m  units each pa.  This raises the question of whether recent sluggish global car sales is somehow related to the almost exponential growth in carpooling/ride-share platforms?

PGMs: Facing Technological Obsolescence? (P. 2)

South Africa

Impala Platinum Holdings Limited, or Implats, is the holding company for a group of companies which operate platinum mines.  In addition to platinum, Implats mines, produces, and markets other platinum group metals such as palladium, rhodium, and nickel.  Implats also provides refining services for base and precious metals producers.

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Impala Platinum Holdings (IMP SJ)

Overweight EM Vs. EAFE; Dollar Weakness Continues

Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS...

Vermilion Research

TMI Snapshot: Platinum Price Hostage to Nikola?

A key driver of the 2020 platinum rally has been increased optimism on hydrogen fuel cell technology. We observe outsized correlations between...

Elan Gore

PGMs: Facing Technological Obsolescence? (P. 2)

Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth Widespread adoption of Hydrogen considered unlikely 41% of...

Boost Research

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