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>The S&amp;P 500 (SPX) is back to test YTD highs and important resistance in the 5670-5783 range. This is an important target/resistance area we have discussed for weeks.</li>
<li>Using the 2007 SPX topping analog suggests a 2% or less move above the prior all-time high set in July at 5670 before topping, which gives the 5783 number.</li>
<li>As long as SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives,and this is the ideal time to do so.</li>
</ul>


The S&amp;P 500 (SPX) is back to test YTD highs and important resistance in the 5670-5783 range. This is an important target/resistance area we have discussed for weeks.
Using the 2007 SPX topping analog suggests a 2% or less move above the prior all-time high set in July at 5670 before topping, which gives the 5783 number.
As long as SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives,and this is the ideal time to do so.


SPX Testing Resistance as Rate Cut Cycle Begins; SPX 5670-5783 Is Resistance, 2007 Analog on Track

<ul>
<li>We downgraded our long-term outlook to neutral last week (8/6/24 Compass) after being bullish since early-November 2023. We still believe the SPX is going through a 1-to 4-month consolidation phase.</li>
<li>It is possible the low for this consolidation has been established within our expected pullback zone of 5100-5191 that we discussed two weeks ago (7/30/24 Compass)</li>
<li>In terms of upside, the SPX could test its YTD highs or make a marginal new high, or could also see it roll over at the 5400 or 5585 resistances.</li>
</ul>


We downgraded our long-term outlook to neutral last week (8/6/24 Compass) after being bullish since early-November 2023. We still believe the SPX is going through a 1-to 4-month consolidation phase.
It is possible the low for this consolidation has been established within our expected pullback zone of 5100-5191 that we discussed two weeks ago (7/30/24 Compass)
In terms of upside, the SPX could test its YTD highs or make a marginal new high, or could also see it roll over at the 5400 or 5585 resistances.


Downgrading Discretionary to UW; 2000, 2007, 2022 SPX Top Similarities Suggest Test of YTD Highs

<ul>
<li>Breadth continues to improve and Russell 2000 (IWM) small-caps and the Dow remain bullish, all while the S&amp;P 500 and Nasdaq 100 (QQQ) are going through a pullback/consolidation phase.</li>
<li>Considering the Russell 2000 vs. S&amp;P 500 ratio is reversing a 3.5-year downtrend, we expect this trend of small-cap outperformance to continue for months or longer.</li>
<li>With new risk-off signals emerging, potential pullback zones we would look for include 5100-5191 on the S&amp;P 500 and $443-$449 on the QQQ, expecting a low near the election.</li>
</ul>


Breadth continues to improve and Russell 2000 (IWM) small-caps and the Dow remain bullish, all while the S&amp;P 500 and Nasdaq 100 (QQQ) are going through a pullback/consolidation phase.
Considering the Russell 2000 vs. S&amp;P 500 ratio is reversing a 3.5-year downtrend, we expect this trend of small-cap outperformance to continue for months or longer.
With new risk-off signals emerging, potential pullback zones we would look for include 5100-5191 on the S&amp;P 500 and $443-$449 on the QQQ, expecting a low near the election.


Upgrading Health Care to Market Weight; Risk-Off Signals Suggest SPX and QQQ Pullback to Continue

<ul>
<li>Mega-Cap growth names such as AMZN, TSLA, MSFT, GOOGL, and META have picked up the slack as semiconductors (SMH, SOXX, NVDA, AVGO, etc.) are simply consolidating after getting extended.</li>
<li>This was a possibility we discussed in last week's Compass (6/25/24), which means we are not seeing any lasting rotation away from large-cap growth.</li>
<li>We remain bullish on all names listed (including the semiconductors), and we continue to recommend an overweight to large-cap growth (relative to value) as initially discussed in our 5/29/24 Compass</li>
</ul>


Mega-Cap growth names such as AMZN, TSLA, MSFT, GOOGL, and META have picked up the slack as semiconductors (SMH, SOXX, NVDA, AVGO, etc.) are simply consolidating after getting extended.
This was a possibility we discussed in last week's Compass (6/25/24), which means we are not seeing any lasting rotation away from large-cap growth.
We remain bullish on all names listed (including the semiconductors), and we continue to recommend an overweight to large-cap growth (relative to value) as initially discussed in our 5/29/24 Compass


Remain Overweight Large-Cap Growth; Downgrading Materials to Underweight; Software Buys $MSTR $CRWD

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Thematic (Sector/Industry)

<ul>
<li>Micron's earnings were… acceptable.</li>
<li>
The market didn’t like the guide, but I think it is more of a function of expectations management.
</li>
<li>
Micron is clearly on the upswing, and the stock needs healthy revenue and profit beats.

</li>
</ul>


Micron's earnings were… acceptable.

The market didn’t like the guide, but I think it is more of a function of expectations management.


Micron is clearly on the upswing, and the stock needs healthy revenue and profit beats.




Micron Earnings, SiTime, Consumer, and Applied Materials Insider Sale

United States

iShares PHLX Semiconductor ETF is an exchange-traded fund incorporated in the USA. The ETF's objective seeks investment results that correspond to the performance of the PHLX Semiconductor Sector Index.

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iShares PHLX Semiconductor ETF (SOXX US)

SPX Testing Resistance as Rate Cut Cycle Begins; SPX 5670-5783 Is Resistance, 2007 Analog on Track

$SPX Testing Resistance as Rate Cut Cycle Begins; SPX 5670-5783 is Resistance, 2007 Analog on Track if Below 5783. Still Neutral, prefer to sell...

Vermilion Research

Downgrading Discretionary to UW; 2000, 2007, 2022 SPX Top Similarities Suggest Test of YTD Highs

Downgrading Discretionary $XLY to Underweight; 2000, 2007, 2022 SPX Top Similarities Suggests Possible Test of YTD Highs; Expect Semiconductors...

Vermilion Research

Upgrading Health Care to Market Weight; Risk-Off Signals Suggest SPX and QQQ Pullback to Continue

Upgrading Health Care $XLV to Market Weight; New Risk-Off Signals Suggest Pullback in $SPX and $QQQ to Continue, looking for pullbacks to 5100-5191...

Vermilion Research

Remain Overweight Large-Cap Growth; Downgrading Materials to Underweight; Software Buys $MSTR $CRWD

Remain Overweight Large-Cap Growth $IWF as discussed 5/29/24; Downgrading Materials $XLB to Underweight; Buy/Stay Long Software Stocks $IGV $MSFT...

Vermilion Research

Micron Earnings, SiTime, Consumer, and Applied Materials Insider Sale

High expectations for Micron, SiTime Spectrum-X (s/o Ian Cutress) and Consumer Bottoming, and thoughts on Semiconductors (Bearish!)

Fabricated Knowledge

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