Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Cross Asset Strategy

<ul>
<li>In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action before anyone else has given it any noteworthy attention.</li>
<li>This week we look at four reasons why the curve steepener is now the trend to watch! There are four reasons for the USD curve steepening now</li>
<li>The issuance profile will move towards longer durations, the BoJ decision has decreased Japanese incentives to buy USTs, the Manufacturing rebound will add to steepening pressures, positioning is already loaded with duration</li>
</ul>


In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action before anyone else has given it any noteworthy attention.
This week we look at four reasons why the curve steepener is now the trend to watch! There are four reasons for the USD curve steepening now
The issuance profile will move towards longer durations, the BoJ decision has decreased Japanese incentives to buy USTs, the Manufacturing rebound will add to steepening pressures, positioning is already loaded with duration


Out of the Box #14: 4 Reasons Why Curve Steepening Is Now on the Cards

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

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>We continue to believe the path of least resistance is higher for the major equity indexes, which has been our stance since our 5/30/23 ETF Pathfinder.</li>
<li>Beginning with our 7/18/23 Compass, we discussed our expectation for major 1+ year breakouts on the equal-weighted S&amp;P 500 (RSP), Dow, and Russell 2000 (IWM). </li>
<li>The breakouts happened later that day on the <a href="https://www.smartkarma.com/entities/invesco-s-p-500-equal-weight-e" target="_blank" data-smartkarma-citation="entities:32932:1" rel="noopener">RSP</a> and Dow (above $153 and 34,280, respectively), and the <a href="https://www.smartkarma.com/entities/ishares-russell-2000-etf" target="_blank" data-smartkarma-citation="entities:32964:1" rel="noopener">IWM</a> is now on the cusp of breaking out above $199.</li>
</ul>


We continue to believe the path of least resistance is higher for the major equity indexes, which has been our stance since our 5/30/23 ETF Pathfinder.
Beginning with our 7/18/23 Compass, we discussed our expectation for major 1+ year breakouts on the equal-weighted S&amp;P 500 (RSP), Dow, and Russell 2000 (IWM). 
The breakouts happened later that day on the RSP and Dow (above $153 and 34,280, respectively), and the IWM is now on the cusp of breaking out above $199.


Expecting Russell 2000 (IWM) Breakout Above $199; Highlighting Buys in Energy

<ul>
<li>We discussed last week how consolidation was likely, so far that has played out with the SPX back testing the 4300-4325 area which we anticipated would cap upside for 2023.</li>
<li>We continue to watch short-term support at 4300, and we cannot be bearish if the S&amp;P 500 is above 4300.</li>
<li>The Russell 2000 (IWM) is back to test support at $180; we would expect to see this hold as support, but a failure to hold would mean a trip to $170<span id="autocomplete"><span id="autocomplete-searchtext"></span></span>
</li>
</ul>


We discussed last week how consolidation was likely, so far that has played out with the SPX back testing the 4300-4325 area which we anticipated would cap upside for 2023.
We continue to watch short-term support at 4300, and we cannot be bearish if the S&amp;P 500 is above 4300.
The Russell 2000 (IWM) is back to test support at $180; we would expect to see this hold as support, but a failure to hold would mean a trip to $170



Russell 2000 (IWM) Testing $180 Support; Breadth Remains Constructive; Construction/Engineering Buys

<ul>
<li>The S&amp;P 500 is 1% above the 4300-4325 area which we anticipated would cap upside for 2023.</li>
<li>Our view since our 5/30/23 ETF Pathfinder is that we cannot be bearish if the SPX is above 4050, and we subsequently moved that line-in-the-sand up to 4165-4200 on 6/6/23.</li>
<li>We are moving that threshold up to 4300, which is short-term support to watch; a break below it could bring selling pressure.</li>
</ul>


The S&amp;P 500 is 1% above the 4300-4325 area which we anticipated would cap upside for 2023.
Our view since our 5/30/23 ETF Pathfinder is that we cannot be bearish if the SPX is above 4050, and we subsequently moved that line-in-the-sand up to 4165-4200 on 6/6/23.
We are moving that threshold up to 4300, which is short-term support to watch; a break below it could bring selling pressure.


Consolidation Likely, But Little Reason to Be Bearish; Buys Within Biotech, Latin American Banks

<ul>
<li>The S&amp;P 500 broke above 4200 and the 2-month megaphone pattern on Friday, and is already approaching the 4300-4325 area which we have anticipated would cap upside for 2023.</li>
<li>While we would be cautious at these levels given our expectation for inflation to remain elevated, we cannot get too bearish if the S&amp;P 500 is above 4165-4200.</li>
<li>Breadth remains weak within the S&amp;P 500, but we are starting to see breadth improvement within small-cap Russell 2000 (IWM). More on that below, IWM targets include $190 and $200-202.</li>
</ul>


The S&amp;P 500 broke above 4200 and the 2-month megaphone pattern on Friday, and is already approaching the 4300-4325 area which we have anticipated would cap upside for 2023.
While we would be cautious at these levels given our expectation for inflation to remain elevated, we cannot get too bearish if the S&amp;P 500 is above 4165-4200.
Breadth remains weak within the S&amp;P 500, but we are starting to see breadth improvement within small-cap Russell 2000 (IWM). More on that below, IWM targets include $190 and $200-202.


Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels

United States

Technology Select Sector SPDR Fund is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of The Technology Select Sector Index. The ETF holds large and mid-cap technology stocks. Its largest investment allocation is in the United States. The ETF weights the holdings using a market capitalization methodology.

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Technology Select Sector SPDR (XLK US)

Out of the Box #14: 4 Reasons Why Curve Steepening Is Now on the Cards

In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action...

Steno Research

Expecting Russell 2000 (IWM) Breakout Above $199; Highlighting Buys in Energy

Expecting Russell 2000 $IWM Breakout Above $199; Many Reasons to be Bullish; $DXY and Treasury Yields $TNX $TYX Remain Below Resistance;...

Vermilion Research

Russell 2000 (IWM) Testing $180 Support; Breadth Remains Constructive; Construction/Engineering Buys

Russell 2000 $IWM Testing $180 Support; $RTY $SPX Breadth Remains Constructive; Highlighting buy ideas in Services (Research/Consulting &...

Vermilion Research

Consolidation Likely, But Little Reason to Be Bearish; Buys Within Biotech, Latin American Banks

$SPX is 1% above 4300-4325 which we anticipated would cap upside for 2023. Our view since May 30 (ETF Pathfinder) is we cannot be bearish if SPX is...

Vermilion Research

Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels

Breadth remains weak within the $SPX, but we're seeing breadth improve within the small-cap Russell 2000 $IWM. All this points to a breakout above...

Vermilion Research

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