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>Ongoing developments have been almost exclusively of the risk-on variety ever since we discussed that risk/reward favored buyers in late-October (10/24/23 and 10/31/23 Compass reports).</li>
<li>The latest risk-on developments include the Russell2000 (IWM) and DJI breaking above resistances of $180 and 35,650, to go along with bullish 9-month RS reversals for small-, mid-, and micro-caps.</li>
<li>Breadth improvement and broadening participation was a big reason why we recommended buying the IWM when it was testing $162-$163 support (10/31/23 Compass). We remain bullish</li>
</ul>


Ongoing developments have been almost exclusively of the risk-on variety ever since we discussed that risk/reward favored buyers in late-October (10/24/23 and 10/31/23 Compass reports).
The latest risk-on developments include the Russell2000 (IWM) and DJI breaking above resistances of $180 and 35,650, to go along with bullish 9-month RS reversals for small-, mid-, and micro-caps.
Breadth improvement and broadening participation was a big reason why we recommended buying the IWM when it was testing $162-$163 support (10/31/23 Compass). We remain bullish


Upgrading Real Estate, Transportation to Market Weight; Smid-Caps With Bullish RS Reversals

<ul>
<li>In last week's Compass (Sept. 27) we discussed our belief that market indexes could see a bounce or pause in selling, citing numerous oversold indexes/Sectors that were testing critical supports.</li>
<li>Supports included 3636 on the S&amp;P 500, $269 on the Nasdaq 100 (QQQ), and $162 on the Russell 2000 (IWM).</li>
<li>Supports held, and early indications suggest a bear market rally is brewing (at minimum), helped by short-term bearish engulfing patterns on the DXY and 10-year Treasury yield last Wednesday.</li>
</ul>


In last week's Compass (Sept. 27) we discussed our belief that market indexes could see a bounce or pause in selling, citing numerous oversold indexes/Sectors that were testing critical supports.
Supports included 3636 on the S&amp;P 500, $269 on the Nasdaq 100 (QQQ), and $162 on the Russell 2000 (IWM).
Supports held, and early indications suggest a bear market rally is brewing (at minimum), helped by short-term bearish engulfing patterns on the DXY and 10-year Treasury yield last Wednesday.


Another Bear Market Rally Brewing?; Stick With Biotech and Construction/Engineering Names

Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

A review of market leadership through macro cross-asset and conventional technical analysis viewpoints shows a possible bullish set-up for the reflation trade. However, the jury is still out on this bullish scenario. We need to see the cyclical and value sectors exhibit better and broader relative performance as confirmation of reflationary strength. Investors may gain better clarity on market direction once the jitters over the debt ceiling and Biden’s stimulus program are resolved.

A review of market leadership through macro cross-asset and conventional technical analysis viewpoints shows a possible bullish set-up for the reflation trade. However, the jury is still out on this bullish scenario. We need to see the cyclical and value sectors exhibit better and broader relative performance as confirmation of reflationary strength. Investors may gain better clarity on market direction once the jitters over the debt ceiling and Biden’s stimulus program are resolved.

Q4 Sector Review: Assessing the Yield Surge Fallout

It’s time for another periodic review of sector leadership. Our latest RRG chart shows growth sectors (technology, communication services) and selected defensive sectors (consumer staples, healthcare, REITs) in the top half of the chart, indicating leadership positions. Value and cyclical sectors are the laggards in the bottom half.We interpret these conditions as neither bullish nor bearish, but a story of balanced leadership. The high beta components of the S&amp;P 500, growth and value, have been undergoing an internal rotation. As the economy shifted from an early-cycle recovery to a mid-cycle expansion (see <a href="https://www.smartkarma.com/insights/how-to-navigate-the-mid-cycle-expansion" target="_blank" rel="noopener">How to Navigate the Mid-Cycle Expansion</a>), market jitters over stalling global growth have risen. As a consequence, investors have rotated from the cyclical and reflation trade back into growth as growth stocks become more valuable when economic growth is scarce. At the same time, the stock market has also been supported by defensive sectors such as healthcare and real estate. Currently, value is showing some signs of early strength, but a turn in the value/growth relationship hasn’t been confirmed.Our base-case scenario calls for a choppy range-bound market until the cyclical and reflation trade theme retakes market leadership. If the stock market were to definitively turn upward, leadership may have to come from high-beta small-cap stocks.

It’s time for another periodic review of sector leadership. Our latest RRG chart shows growth sectors (technology, communication services) and selected defensive sectors (consumer staples, healthcare, REITs) in the top half of the chart, indicating leadership positions. Value and cyclical sectors are the laggards in the bottom half.We interpret these conditions as neither bullish nor bearish, but a story of balanced leadership. The high beta components of the S&amp;P 500, growth and value, have been undergoing an internal rotation. As the economy shifted from an early-cycle recovery to a mid-cycle expansion (see How to Navigate the Mid-Cycle Expansion), market jitters over stalling global growth have risen. As a consequence, investors have rotated from the cyclical and reflation trade back into growth as growth stocks become more valuable when economic growth is scarce. At the same time, the stock market has also been supported by defensive sectors such as healthcare and real estate. Currently, value is showing some signs of early strength, but a turn in the value/growth relationship hasn’t been confirmed.Our base-case scenario calls for a choppy range-bound market until the cyclical and reflation trade theme retakes market leadership. If the stock market were to definitively turn upward, leadership may have to come from high-beta small-cap stocks.

Sector Review: Balanced Leadership and Rotation

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.

Macroeconomics

<ul>
<li>In <a href="https://www.clevelandfed.org/en/newsroom-and-events/publications/cfed-district-data-briefs/cfddb-20210205-did-the-covid-19-pandemic-cause-an-urban-exodus.aspx" target="_blank" rel="noopener">"Did the COVID-19 Pandemic Cause an Urban Exodus?"</a> Stephen Whitaker of the Cleveland Fed recently examined granular US urban migration data for 2020, concluding that the rate of decline in urban inward migration has been a much more significant driver of net urban population flow than active "urban flight"</li>
<li>Average monthly relocations into urban centers were down -18K/month on average or -7.6% from March-December 2020 relative to the previous 3 years, whereas average monthly relocations out of urban centers were up just +10K/month on average or +3.8%</li>
<li>The data potentially implies greater-than-expected pent-up demand for urban housing per "unit" of increased post-pandemic confidence</li>
<li>Our text-mining saw media coverage of the De-urbanization/Urban Flight theme reach peak momentum in Q3 2020; recently, an Urban Recovery/Return to Cities theme is starting to trend higher as normalized post-pandemic urban life finally appears within reach, along with an incipient "return to the office" theme</li>
<li>Early signs of recovery are showing in recent urban housing data from Redfin, RealPage, the National Multifamily Housing Council and Douglas Elliman</li>
<li>A perceived structural overhang on urban life is the notion of permanent WFH; but the outlook for office work appears less dire as post-pandemic confidence improves on the margin</li>
<li>The trajectory of urban migration post-pandemic will have far-reaching implications for a range of themes, from commercial property &amp; REIT recovery to multifamily construction, retail, dining, municipal finances and CPI</li>
</ul><div class="content-highlight">TMI Data Science utilizes Natural Language Processing to build leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macro, equity indexes/ETFs, commodities, currencies, fixed income &amp; equities. </div>


In "Did the COVID-19 Pandemic Cause an Urban Exodus?" Stephen Whitaker of the Cleveland Fed recently examined granular US urban migration data for 2020, concluding that the rate of decline in urban inward migration has been a much more significant driver of net urban population flow than active "urban flight"
Average monthly relocations into urban centers were down -18K/month on average or -7.6% from March-December 2020 relative to the previous 3 years, whereas average monthly relocations out of urban centers were up just +10K/month on average or +3.8%
The data potentially implies greater-than-expected pent-up demand for urban housing per "unit" of increased post-pandemic confidence
Our text-mining saw media coverage of the De-urbanization/Urban Flight theme reach peak momentum in Q3 2020; recently, an Urban Recovery/Return to Cities theme is starting to trend higher as normalized post-pandemic urban life finally appears within reach, along with an incipient "return to the office" theme
Early signs of recovery are showing in recent urban housing data from Redfin, RealPage, the National Multifamily Housing Council and Douglas Elliman
A perceived structural overhang on urban life is the notion of permanent WFH; but the outlook for office work appears less dire as post-pandemic confidence improves on the margin
The trajectory of urban migration post-pandemic will have far-reaching implications for a range of themes, from commercial property &amp; REIT recovery to multifamily construction, retail, dining, municipal finances and CPI
TMI Data Science utilizes Natural Language Processing to build leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macro, equity indexes/ETFs, commodities, currencies, fixed income &amp; equities. 

TMI Snapshot:  De-Urbanization or Urban Recovery?

United States

Real Estate Select Sector SPDR Fund is an exchange-traded fund incorporated in the USA. The Fund seeks to provide investment results that before fees and expenses, correspond generally to the price and yield performance of the Real Estate Select Sector Index.

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Real Estate Select Sect Spdr (XLRE US)

Upgrading Real Estate, Transportation to Market Weight; Smid-Caps With Bullish RS Reversals

Upgrading Real Estate $XLRE $VNQ and Transportation $IYT $XTN to Market Weight; Smid-Caps With Bullish RS Reversals as $SPX, $COMP Take a Pause;...

Vermilion Research

Another Bear Market Rally Brewing?; Stick With Biotech and Construction/Engineering Names

Early indications suggest another bear market rally in $SPX, and potentially that the lows are in, helped by short-term bearish engulfing patterns...

Vermilion Research

Q4 Sector Review: Assessing the Yield Surge Fallout

A review of market leadership through macro cross-asset and conventional technical analysis viewpoints shows a possible bullish set-up for the...

Cam Hui

Sector Review: Balanced Leadership and Rotation

Our base-case scenario calls for a choppy range-bound market until the cyclical and reflation trade theme retakes market leadership.

Cam Hui

TMI Snapshot: De-Urbanization or Urban Recovery?

Recent research from the Cleveland Fed suggests greater pent-up demand for urban housing post-COVID. A recovery is already underway, suggesting...

Elan Gore

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