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

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Shanghai Stock Exchange Composite Index / Technical Analysis

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

FTSE China A50 Index / Technical Analysis

Price action on Chinese equity markets at the start of this week now raise eyebrows as the FTSE China A50 Index shows clear risk of further losses while the Shanghai Composite is testing pivots.Whether this translates to CNH weakness is not clear.

Price action on Chinese equity markets at the start of this week now raise eyebrows as the FTSE China A50 Index shows clear risk of further losses while the Shanghai Composite is testing pivots.Whether this translates to CNH weakness is not clear. 

New developments suggest caution is warranted, and leads us to believe the mixed market environment is poised to continue. The new and concerning developments include widening high yield spreads in the U.S. and Europe and improving relative strength for defensive Sectors -- both are clear signs of risk aversion. At the same time, global indexes remain above critical support levels; until this changes our neutral outlook remains appropriate.

New developments suggest caution is warranted, and leads us to believe the mixed market environment is poised to continue. The new and concerning developments include widening high yield spreads in the U.S. and Europe and improving relative strength for defensive Sectors -- both are clear signs of risk aversion. At the same time, global indexes remain above critical support levels; until this changes our neutral outlook remains appropriate.

Global Equity Strategy: Reason For Caution; Actionable Themes: Services/Technology & Staples

Chinese indices have started to stabilise and bounce from the identified buy zones. The setups emerging are looking very encouraging for a decent rally ahead.When combined with the recent economic data and rhetoric/position of policy makers, the relative charts against the S&amp;P 500 are once again looking very interesting both from historical and short term perspectives.

Chinese indices have started to stabilise and bounce from the identified buy zones. The setups emerging are looking very encouraging for a decent rally ahead.When combined with the recent economic data and rhetoric/position of policy makers, the relative charts against the S&amp;P 500 are once again looking very interesting both from historical and short term perspectives.

China

The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The index was developed on December 19, 1990 with a base value of 100. 

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Cracks are beginning to show, particularly in EM/China. Key support violations include the MSCI EM index below $52, the Shanghai Comp below 3500,...

Vermilion Research

Chinese Equity Markets: Supports Crack

The FTSE China A50 Index has breached the support zone and is at risk of falling further while the Shanghai Composite is testing important levels....

Shyam Devani

Global Equity Strategy: Reason For Caution; Actionable Themes: Services/Technology & Staples

With interest rates expected to move sideways to lower, we recommend a mix of growth and defensive Sectors. Today we focus on Services/Technology...

Vermilion Research

China Back at the Buy Zone

Chinese indices are turning from great levels. The emerging setups suggest a significant rally ahead and possibly the outperformance against the...

Shyam Devani