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

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

In last Tuesday’s Compass (10/27/20) we noted the S&amp;P 500’s break below 3425 short-term support opened the door for potential visits to 3325 and 3200. Support at 3325 was violated by Wednesday, however the 3200-3230 level has held and remains important support moving forward.  In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican Banks, Banks, Southwest, and Investment Banking &amp; Brokerage, Mid-Cap

U.S. Equity Strategy: Markets Bouncing off Key Support

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

The pollsters have egg on their faces again, with President Trump performing far better than the polls had suggested all year. The Electoral College is close to a dead heat, with the "path to the presidency" for Biden hanging by slender margins in 4 states. President Trump disingenuously suggested that votes "cast after election day" are still being counted -- and that he would mount legal challenges to stop the counting. This was the nightmare scenario: an extremely close election, with Trump leading in several states on Election Day, only to have that vote count overturned in favour of Biden once the mail-in/absentee ballots were (legitimately) counted. Our estimate suggests that former Vice President Biden will still win the presidency, but do so after a messy counting process, with wild swings in many states -- particularly the battleground states of Pennsylvania, Michigan, Wisconsin, Nevada, Georgia and North Carolina. Trump won Ohio (as polls had suggested) and Florida (against the polls, which had suggested a narrow Biden win there). As was widely expected, Michigan and Pennsylvania were able to start counting mail-in ballots only on Election Day, and these have delayed the process. But with likely victories in Michigan, Wisconsin, Nevada and Georgia, Joe Biden will get past the magic mark of 270 in the Electoral College, and be elected President. However, the Democrats are likely to see their majority in the House of Representatives whittled down severely, and the Senate will likely stay in Republican hands, which will oblige President-elect Biden to hew to the centrist line he prefers.  Biden is still likely to be able to raise the corporate tax rate to 28% (30.8% for corporates that have offshored goods and services), and undertake some of his plans for boosting infrastructure and green investment. But the more radical parts of the Democratic platform will be much tougher to enact -- including expanding the Supreme Court, widening Obamacare, and extending green regulation. Instead, Biden is likely to include a couple of Republicans in his Cabinet, and rule from the centre. While the next few days will be taken up with Trumpian legal challenges to the counting process -- which will prolong the uncertainty over the election outcome -- a Biden win will soon come to be accepted by most, including many Republicans. We were expecting a big sell-off in the market in November if there was a "blue wave". But this form of divided government is a better outcome: after a sell-off of 4-5% as the market digests the uncertainty and the impact of the Biden tax hikes on corporates, we expect the equity market to rebound. On a 3-6 month view, we are positive on the outlook for equities.

The pollsters have egg on their faces again, with President Trump performing far better than the polls had suggested all year. The Electoral College is close to a dead heat, with the "path to the presidency" for Biden hanging by slender margins in 4 states. President Trump disingenuously suggested that votes "cast after election day" are still being counted -- and that he would mount legal challenges to stop the counting. This was the nightmare scenario: an extremely close election, with Trump leading in several states on Election Day, only to have that vote count overturned in favour of Biden once the mail-in/absentee ballots were (legitimately) counted. Our estimate suggests that former Vice President Biden will still win the presidency, but do so after a messy counting process, with wild swings in many states -- particularly the battleground states of Pennsylvania, Michigan, Wisconsin, Nevada, Georgia and North Carolina. Trump won Ohio (as polls had suggested) and Florida (against the polls, which had suggested a narrow Biden win there). As was widely expected, Michigan and Pennsylvania were able to start counting mail-in ballots only on Election Day, and these have delayed the process. But with likely victories in Michigan, Wisconsin, Nevada and Georgia, Joe Biden will get past the magic mark of 270 in the Electoral College, and be elected President. However, the Democrats are likely to see their majority in the House of Representatives whittled down severely, and the Senate will likely stay in Republican hands, which will oblige President-elect Biden to hew to the centrist line he prefers.  Biden is still likely to be able to raise the corporate tax rate to 28% (30.8% for corporates that have offshored goods and services), and undertake some of his plans for boosting infrastructure and green investment. But the more radical parts of the Democratic platform will be much tougher to enact -- including expanding the Supreme Court, widening Obamacare, and extending green regulation. Instead, Biden is likely to include a couple of Republicans in his Cabinet, and rule from the centre. While the next few days will be taken up with Trumpian legal challenges to the counting process -- which will prolong the uncertainty over the election outcome -- a Biden win will soon come to be accepted by most, including many Republicans. We were expecting a big sell-off in the market in November if there was a "blue wave". But this form of divided government is a better outcome: after a sell-off of 4-5% as the market digests the uncertainty and the impact of the Biden tax hikes on corporates, we expect the equity market to rebound. On a 3-6 month view, we are positive on the outlook for equities.    

Election Cliffhanger Brings Near-Term Nightmare; but a Curtailed Left Helps Biden

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Macroeconomics

Despite the US economy's resilience, the next Administration still faces formidable challenges, notably maintaining sufficient public demand to support continued healing in the labour market. Without further federal assistance, deep budget cuts by state &amp; local governments could imperil the economic recovery.
Arguments between Democrats and Republicans about the size of fiscal stimulus are essentially pointless, particularly given the lower value of fiscal multiplier during economic expansions. Targeted spending at alleviating restrictions on social gatherings will raise aggregate demand for those sectors of the economy that continue to be impacted by the COVID-19 pandemic.
Vice President Biden has pledged to raise the minimum wage and repeal part of the corporate tax cuts that were invoked in 2017, claiming that companies did not engage in meaningfully higher capital spending with their higher after-tax profits. Further costs will also be imposed on the corporate sector by a Biden Administration under the auspices of a Paycheck Fairness Act that would mandate equal pay between sexes and boost paid child care leave.
Both US Presidential candidates have vowed to reduce the country's economic reliance on China via legislation. A Biden Administration may be constrained in terms of offering major goodwill gestures to China due to strong protectionist sentiment amongst Congressional Democrats.
The COVID-19 pandemic has massively compounded an underlying level of business uncertainty that already prevailed due to trade tensions with China, and it is doubtful that a Biden Administration could quickly ignite animal spirits in sectors adversely impacted by tariffs. The available time to reset relations with China and deal with income inequality is very short for a Biden Administration, thereby making it difficult for the rapid return of animal spirits.

Despite the US economy's resilience, the next Administration still faces formidable challenges, notably maintaining sufficient public demand to support continued healing in the labour market. Without further federal assistance, deep budget cuts by state &amp; local governments could imperil the economic recovery.
Arguments between Democrats and Republicans about the size of fiscal stimulus are essentially pointless, particularly given the lower value of fiscal multiplier during economic expansions. Targeted spending at alleviating restrictions on social gatherings will raise aggregate demand for those sectors of the economy that continue to be impacted by the COVID-19 pandemic.
Vice President Biden has pledged to raise the minimum wage and repeal part of the corporate tax cuts that were invoked in 2017, claiming that companies did not engage in meaningfully higher capital spending with their higher after-tax profits. Further costs will also be imposed on the corporate sector by a Biden Administration under the auspices of a Paycheck Fairness Act that would mandate equal pay between sexes and boost paid child care leave.
Both US Presidential candidates have vowed to reduce the country's economic reliance on China via legislation. A Biden Administration may be constrained in terms of offering major goodwill gestures to China due to strong protectionist sentiment amongst Congressional Democrats.
The COVID-19 pandemic has massively compounded an underlying level of business uncertainty that already prevailed due to trade tensions with China, and it is doubtful that a Biden Administration could quickly ignite animal spirits in sectors adversely impacted by tariffs. The available time to reset relations with China and deal with income inequality is very short for a Biden Administration, thereby making it difficult for the rapid return of animal spirits.

Ensuring US Economic Growth: Next US Administration Faces Short Honeymoon to Deliver Promises

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

SPX turned bearish below 3,410 and we used the DJI to short at 27,700 (break below 28k pivot support) given the Dow is underperforming the SPX. NDX below 11,600 is the core risk driver. Lack of stimulus clarity and Covid on the rise weighing on pivot support breaks. Big tech earnings today expected to give NDX a lift (bounce trade up).SPX 3,410 and NDX 11,600 represent key pivot resistance points for a fresh short phase and the bull/bear line.Asia long levels outlined on weakness.

SPX turned bearish below 3,410 and we used the DJI to short at 27,700 (break below 28k pivot support) given the Dow is underperforming the SPX. NDX below 11,600 is the core risk driver. Lack of stimulus clarity and Covid on the rise weighing on pivot support breaks. Big tech earnings today expected to give NDX a lift (bounce trade up).SPX 3,410 and NDX 11,600 represent key pivot resistance points for a fresh short phase and the bull/bear line.Asia long levels outlined on weakness.

Yesterday’s break below 3425 short-term support in the S&amp;P 500 opens the door for potential visits to 3325 and 3200, two important support levels we are watching moving forward. With that said, as long as 3200 holds (the September lows) we are constructive and would be buyers on a pullback. At the same time, small-caps are providing a risk-on signal with the Russell 2000 (IWM) still holding above $159 short-term support. Leadership from small-caps is something we would expect to see in a broad-based bull market, and if IWM is above $159 it is hard to get too bearish overall.

Yesterday’s break below 3425 short-term support in the S&amp;P 500 opens the door for potential visits to 3325 and 3200, two important support levels we are watching moving forward. With that said, as long as 3200 holds (the September lows) we are constructive and would be buyers on a pullback. At the same time, small-caps are providing a risk-on signal with the Russell 2000 (IWM) still holding above $159 short-term support. Leadership from small-caps is something we would expect to see in a broad-based bull market, and if IWM is above $159 it is hard to get too bearish overall.

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

U.S. Equity Strategy: Markets Bouncing off Key Support

In today’s report we highlight attractive Groups and stocks within Financials: Asian Banks, Puerto Rican banks, Banks, Southwest, and Investment...

Vermilion Research

Election Cliffhanger Brings Near-Term Nightmare; but a Curtailed Left Helps Biden

Uncertainty will be prolonged by legal challenges. But President-elect Biden will govern from the center, given a GOP Senate. After initial sell...

Prasenjit K. Basu

Ensuring US Economic Growth: Next US Administration Faces Short Honeymoon to Deliver Promises

Whoever wins the Presidential Election, the next US Administration cannot be complacent about the economy. Quick resolution to elevated economic...

DeSaque Macro Research

SPX 3,410 and NDX 11,600 Breaks

SPX 3,410 and NDX 11,600 breakdown points will act as resistance on a rally attempt and the bull bear lines for global risk. Tech earnings today...

Thomas Schroeder

U.S. Market Sending Mixed Signals

In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Materials, Health Care, & Services

Vermilion Research