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

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The S&amp;P 500 broke above 4200 and the 2-month megaphone pattern on Friday, and is already approaching the 4300-4325 area which we have anticipated would cap upside for 2023.</li>
<li>While we would be cautious at these levels given our expectation for inflation to remain elevated, we cannot get too bearish if the S&amp;P 500 is above 4165-4200.</li>
<li>Breadth remains weak within the S&amp;P 500, but we are starting to see breadth improvement within small-cap Russell 2000 (IWM). More on that below, IWM targets include $190 and $200-202.</li>
</ul>


The S&amp;P 500 broke above 4200 and the 2-month megaphone pattern on Friday, and is already approaching the 4300-4325 area which we have anticipated would cap upside for 2023.
While we would be cautious at these levels given our expectation for inflation to remain elevated, we cannot get too bearish if the S&amp;P 500 is above 4165-4200.
Breadth remains weak within the S&amp;P 500, but we are starting to see breadth improvement within small-cap Russell 2000 (IWM). More on that below, IWM targets include $190 and $200-202.


Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels

<ul>
<li>Large-Cap indexes (S&amp;P 500, Nasdaq 100, and DJI) remain bullish, all hitting new all-time highs last week while continuing to find short-term support at their respective 20-day MAs.</li>
<li>Mid-Caps (S&amp;P 400, Russell Mid-Cap) starting another leg higher following breakouts from 2-month consolidations. Small-caps (S&amp;P 600, Russell 2000) are likely to follow in the footsteps of large- and mid-caps.</li>
<li>Small-Cap indexes have been consolidating for 2.5 months following the historic rally from late-October to late-December 2023, a healthy sign. We expect they are gearing-up for another similar move higher.</li>
</ul>


Large-Cap indexes (S&amp;P 500, Nasdaq 100, and DJI) remain bullish, all hitting new all-time highs last week while continuing to find short-term support at their respective 20-day MAs.
Mid-Caps (S&amp;P 400, Russell Mid-Cap) starting another leg higher following breakouts from 2-month consolidations. Small-caps (S&amp;P 600, Russell 2000) are likely to follow in the footsteps of large- and mid-caps.
Small-Cap indexes have been consolidating for 2.5 months following the historic rally from late-October to late-December 2023, a healthy sign. We expect they are gearing-up for another similar move higher.


U.S. Dollar Rolling Over; Small-Caps to Follow Mid- And Large-Caps to New Highs; Buys in Cons. Disc.

<ul>
<li>The SPX gapped-up to reverse its 1-month downtrend on 5/3/24, followed by another upside gap on 5/6/24, and yet another on 5/15/24 on the breakout to all-time highs</li>
<li>All of these gaps remain unfilled which signals upside power, a very bullish sign. These gaps at 5250-5263, 5127-5142, and 5073-5101 are now areas to expect short-term support, if tested.</li>
<li>Market dynamics remain healthy and the S&amp;P 500, Nasdaq 100, and DJI are all breaking out to new all-time highs, helping validate our bullish outlook.</li>
</ul>


The SPX gapped-up to reverse its 1-month downtrend on 5/3/24, followed by another upside gap on 5/6/24, and yet another on 5/15/24 on the breakout to all-time highs
All of these gaps remain unfilled which signals upside power, a very bullish sign. These gaps at 5250-5263, 5127-5142, and 5073-5101 are now areas to expect short-term support, if tested.
Market dynamics remain healthy and the S&amp;P 500, Nasdaq 100, and DJI are all breaking out to new all-time highs, helping validate our bullish outlook.


New All-Time Highs Validates Our Bullish Outlook; Risk-On Signals Abound. Buys in Aluminum, Shippers

<ul>
<li>Over the past two weeks we've discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).</li>
<li>Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.</li>
<li>We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&amp;P 500 as healthy/normal within the ongoing bull market.</li>
</ul>


Over the past two weeks we've discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).
Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.
We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&amp;P 500 as healthy/normal within the ongoing bull market.


Major Risk-On Developments; Bullish Outlook Intact; Downgrading Health Care $XLV to Underweight

<ul>
<li>While we are not yet out of the woods, we continue to see evidence that suggests the lows may be "in" for this pullback.</li>
<li>Last week (4/23/24 Compass) we discussed the possibility that further downside was limited on the S&amp;P 500 due to a multitude of reasons</li>
<li>We view the latest pullback to 100-day MA on SPX as healthy/normal within the ongoing bull market. Pullbacks to the 100-day provided ideal entry points throughout the 2021 bull market</li>
</ul>


While we are not yet out of the woods, we continue to see evidence that suggests the lows may be "in" for this pullback.
Last week (4/23/24 Compass) we discussed the possibility that further downside was limited on the S&amp;P 500 due to a multitude of reasons
We view the latest pullback to 100-day MA on SPX as healthy/normal within the ongoing bull market. Pullbacks to the 100-day provided ideal entry points throughout the 2021 bull market


Are the Lows "In" For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding

United States

iShares Russell 2000 ETF is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of the Russell 2000 Index. The ETF holds mid and small-cap U.S. stocks. Its investments are in the smallest 2000 companies from the Russell 3000 Index. The ETF weights the holdings by market capitalization and rebalances annually.

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iShares Russell 2000 ETF (IWM US)

Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels

Breadth remains weak within the $SPX, but we're seeing breadth improve within the small-cap Russell 2000 $IWM. All this points to a breakout above...

Vermilion Research

U.S. Dollar Rolling Over; Small-Caps to Follow Mid- And Large-Caps to New Highs; Buys in Cons. Disc.

U.S. Dollar $DXY Rolling Over; 10- and 30-Yr Treasury Yields Hit Major Resistance; Small-Caps to Follow Mid- and Large-Caps to New Highs $IWM $RTY...

Vermilion Research

New All-Time Highs Validates Our Bullish Outlook; Risk-On Signals Abound. Buys in Aluminum, Shippers

New All-Time Highs Validates Our Bullish Outlook $SPX $QQQ $DJI; Risk-On Signals Abound. Three SPX upside gaps in May signals bulls firmly in...

Vermilion Research

Major Risk-On Developments; Bullish Outlook Intact; Downgrading Health Care $XLV to Underweight

Major Risk-On Developments; Bullish Outlook Intact $SPX $QQQ $IWM; Downgrading Health Care $XLV to Underweight Despite Still Being Bullish on $XBI....

Vermilion Research

Are the Lows "In" For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding

Are the Lows "In" for this Pullback?; Market Dynamics Remain Bullish (RS for defensives $XLP, $XLU, $XLV below October 2023 lows among many other...

Vermilion Research

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