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>In last week's Compass (Aug. 23) we discussed the increasing odds for a deeper pullback in the broad market indexes.</li>
<li>This was due to 5-week uptrend breaks on the SPX, NDX, and Russell 2000, the Fed tightening, and with Treasury yields, the U.S. dollar (DXY), and commodities (DJP) inflecting higher.</li>
<li>The market remains in pullback mode; the SPX, NDX, and Russell 2000 are all approaching 50-day MA support, the first big area of interest on this pullback.</li>
</ul>


In last week's Compass (Aug. 23) we discussed the increasing odds for a deeper pullback in the broad market indexes.
This was due to 5-week uptrend breaks on the SPX, NDX, and Russell 2000, the Fed tightening, and with Treasury yields, the U.S. dollar (DXY), and commodities (DJP) inflecting higher.
The market remains in pullback mode; the SPX, NDX, and Russell 2000 are all approaching 50-day MA support, the first big area of interest on this pullback.


Headwinds Persist, Including Rising DXY, 10-Yr Treasury Yield, & Commodities; Buying Staples, Solar

<ul>
<li>After a substantial rally, the S&amp;P500 was unable to break above its 200-day MA and market indexes have violated steep 5-week uptrends; we view this pullback as a critical test.</li>
<li>This is where we see if prior breakout levels/important moving averages hold and market indexes make a higher low, or if this was nothing more than a bear market rally.</li>
<li>Barring a Fed pivot, and with Treasury yields and the DXY inflecting higher (and potentially commodities, too), it increases the odds for a deeper pullback in the broad market indexes.</li>
</ul>


After a substantial rally, the S&amp;P500 was unable to break above its 200-day MA and market indexes have violated steep 5-week uptrends; we view this pullback as a critical test.
This is where we see if prior breakout levels/important moving averages hold and market indexes make a higher low, or if this was nothing more than a bear market rally.
Barring a Fed pivot, and with Treasury yields and the DXY inflecting higher (and potentially commodities, too), it increases the odds for a deeper pullback in the broad market indexes.


Don't Fight the Fed; Pullback Underway as Rising DXY and 10-Yr Treasury Yield Back to Being Headwind

Consumer Discretionary Select / Technical Analysis

<ul>
<li>We continue to believe that the bear market lows have already been established.</li>
<li>It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.</li>
<li>Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.</li>
</ul>


We continue to believe that the bear market lows have already been established.
It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.
Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.


Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

<ul>
<li>The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.</li>
<li>The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.</li>
<li>Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.</li>
</ul>


The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.
The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.
Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.


S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech

<ul>
<li>Last week we noted that the bullish reversals had begun, with the MSCI ACWI (ACWI-US), STOXX Europe 50, and SPX the first few to reverse topside their 4-month downtrends.</li>
<li>As we discuss below, bullish reversals are proliferating globally, something that continues to support our belief that global equities are bottoming.</li>
<li>Global growth Sectors continue to gain momentum and have emerged as leadership -- overweight growth. Sectors covered today include Technology, Consumer Discretionary, and Industrials -- add exposure</li>
</ul>


Last week we noted that the bullish reversals had begun, with the MSCI ACWI (ACWI-US), STOXX Europe 50, and SPX the first few to reverse topside their 4-month downtrends.
As we discuss below, bullish reversals are proliferating globally, something that continues to support our belief that global equities are bottoming.
Global growth Sectors continue to gain momentum and have emerged as leadership -- overweight growth. Sectors covered today include Technology, Consumer Discretionary, and Industrials -- add exposure


Bullish Reversals Proliferate; Stick With Growth; Buy Ideas in Tech, Discretionary, & Industrials

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)

Headwinds Persist, Including Rising DXY, 10-Yr Treasury Yield, & Commodities; Buying Staples, Solar

We still see the market as being in pullback mode; the $SPX, $QQQ $NDX, and $IWM $RUT are all testing 50-day MA support, the first big area of...

Vermilion Research

Don't Fight the Fed; Pullback Underway as Rising DXY and 10-Yr Treasury Yield Back to Being Headwind

$SPX $QQQ $IWM Pullback Underway as Rising $DXY and 10-Yr Treasury Yield Back to Being Headwind; Commodities $DJP $BCOM Attempting to Break Out....

Vermilion Research

Upgrading Discretionary to Overweight, Downgrading Energy & Health Care to Market Weight

Upgrading Discretionary $XLY to Overweight, Downgrading Energy $XLE & Health Care $XLV to Market Weight; Many indexes with major bullish...

Vermilion Research

S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech

$SPX is testing important resistance in the 4165-4180 area, the same resistance level we were monitoring in early June before the market tumbled 13...

Vermilion Research

Bullish Reversals Proliferate; Stick With Growth; Buy Ideas in Tech, Discretionary, & Industrials

Bullish reversals begun last week in $ACWI, $SPX, and $STOXX Europe 50, with each reversing topside their 4-month downtrends. Now, bullish...

Vermilion Research

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