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

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few days, we believe the markets could suffer a more severe pullback. Many of these names are suffering uptrend violations in price and RS, as well as bearish descending triangle patterns. The Sector is showing signs deteriorating breadth as well. In today’s report we highlight concerning charts within Financial Sector.

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few days, we believe the markets could suffer a more severe pullback. Many of these names are suffering uptrend violations in price and RS, as well as bearish descending triangle patterns. The Sector is showing signs deteriorating breadth as well. In today’s report we highlight concerning charts within Financial Sector.

U.S. Equity Strategy: Financials Struggling, Tech and Energy Leading

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

In this report, we look at financials positioning among global equity funds which, in line with global EM funds, are sitting at their highest levels in over 7 years.  Despite this record exposure, there has been a clear rotation out of US financial stocks and into EMEA and Asian stocks.  The latest positioning data shows India as the largest financial overweight among our group of 149 global equity funds, with the US moving from an overweight holding to underweight in the space of the last 12 months.

In this report, we look at financials positioning among global equity funds which, in line with global EM funds, are sitting at their highest levels in over 7 years.  Despite this record exposure, there has been a clear rotation out of US financial stocks and into EMEA and Asian stocks.  The latest positioning data shows India as the largest financial overweight among our group of 149 global equity funds, with the US moving from an overweight holding to underweight in the space of the last 12 months.

Global Financials Positioning:  Funds Hit Maximum Overweight - Rotate Out of USA, into EMEA/Asia

In our March Strategy we provide a top down analysis of U.S. equity market drivers, and highlight opportunities within the following Sectors:• Technology: Overweight.  Technology remains a leadership Sector as uptrends and significant bases remain intact. The recent pullback has resulted in a number of groups breaking to new highs especially in the Software related groups. Historically investors will move to software related names to reduce risk as these companies often have a source of reoccurring revenue. Large- and Mid-cap semiconductors have also been quite resilient, whereas small- and micro-cap semis are seeing breakdowns in price and RS.• Financials: Overweight. Financials continue to plod up and to the right. Banks and thrifts, exchanges, investing banking and brokerage, pawn shops and Latin/South American banks look attractive.

In our March Strategy we provide a top down analysis of U.S. equity market drivers, and highlight opportunities within the following Sectors:• Technology: Overweight.  Technology remains a leadership Sector as uptrends and significant bases remain intact. The recent pullback has resulted in a number of groups breaking to new highs especially in the Software related groups. Historically investors will move to software related names to reduce risk as these companies often have a source of reoccurring revenue. Large- and Mid-cap semiconductors have also been quite resilient, whereas small- and micro-cap semis are seeing breakdowns in price and RS.• Financials: Overweight. Financials continue to plod up and to the right. Banks and thrifts, exchanges, investing banking and brokerage, pawn shops and Latin/South American banks look attractive.

U.S. Equity Strategy: Cyclicals Are Leadership, Small-Caps Are Closing the Gap.

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

* Despite bottom-line improvement on a go-forward basis, deferred tax asset (DTA) write-downs are likely at major global financial companies  - beckoning for major 2018 EPS revisions.* Domestic institutions such as, Bank of America (BAC.US), Goldman Sachs (GS.US), and Morgan Stanley (MS.US) stand out with large DTAs in the US.  * Of the international companies with US subsidiaries, the Swiss financials would post shocking results, while HSBC Holdings could have a 25% EPS adjustment, by our…

* Despite bottom-line improvement on a go-forward basis, deferred tax asset (DTA) write-downs are likely at major global financial companies  - beckoning for major 2018 EPS revisions.* Domestic institutions such as, Bank of America (BAC.US), Goldman Sachs (GS.US), and Morgan Stanley (MS.US) stand out with large DTAs in the US.  * Of the international companies with US subsidiaries, the Swiss financials would post shocking results, while HSBC Holdings could have a 25% EPS adjustment, by our…

HSBC Holdings Plc – Likely Getting a Big Hickey From President Trump

* Margin finance not only remains a concern for the US share market, but the US housing market as well. * Charles Schwab is the latest example of pushing the envelope too far with their clients.As a follow-on to our note "Shanghai-ed by Western Brokers" dated September 2, 2017 where we called out US brokers/investment banks for aggressively lending on margin to high net worth (HNW)/retail investors, we decided to do a little mystery shopping of our own. This afternoon we visited a retail outlet…

* Margin finance not only remains a concern for the US share market, but the US housing market as well. * Charles Schwab is the latest example of pushing the envelope too far with their clients.As a follow-on to our note "Shanghai-ed by Western Brokers" dated September 2, 2017 where we called out US brokers/investment banks for aggressively lending on margin to high net worth (HNW)/retail investors, we decided to do a little mystery shopping of our own. This afternoon we visited a retail outlet…

United States

Morgan Stanley, a bank holding company, provides diversified financial services on a worldwide basis.  The Company operates a global securities business which serves individual and institutional investors and investment banking clients. Morgan Stanley also operates a global asset management business.

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Morgan Stanley (MS US)

U.S. Equity Strategy: Financials Struggling, Tech and Energy Leading

Financials, especially the large-cap brokers have suffered severe pullbacks recently. If these stocks cannot sustain a reversal in the next few...

Vermilion Research

Global Financials Positioning: Funds Hit Maximum Overweight - Rotate Out of USA, into EMEA/Asia

In this report, we look at financials positioning among global equity funds which, in line with global EM funds, are sitting at their highest...

Steven Holden

U.S. Equity Strategy: Cyclicals Are Leadership, Small-Caps Are Closing the Gap.

In our March Strategy we provide a top down analysis of U.S. equity market drivers, and highlight opportunities within the following Sectors:•...

Vermilion Research

HSBC Holdings Plc – Likely Getting a Big Hickey From President Trump

* Despite bottom-line improvement on a go-forward basis, deferred tax asset (DTA) write-downs are likely at major global financial companies -...

Thomas J. Monaco

US Brokers - Chuck Bucks Fueling Housing

* Margin finance not only remains a concern for the US share market, but the US housing market as well. * Charles Schwab is the latest example of...

Thomas J. Monaco

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