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 MSCI ACWI ETF / Technical Analysis

<ul>
<li>Last week (Aug. 18) we discussed the 10-year Treasury yield and DXY testing respective resistance (4.3%-4.35% and $103.50-$103.70).</li>
<li>As long as no decisive breakouts in the 10-year yield or DXY, we were buyers on the pullback to $93 on MSCI ACWI (ACWI-US).</li>
<li>Outside of our overweight countries (Japan, India, Taiwan, Greece), defensive Sectors continue to lag. We highlight buys in Technology, Services, Consumer Discretionary, Industrials, Materials/Energy, and Financials.</li>
</ul>


Last week (Aug. 18) we discussed the 10-year Treasury yield and DXY testing respective resistance (4.3%-4.35% and $103.50-$103.70).
As long as no decisive breakouts in the 10-year yield or DXY, we were buyers on the pullback to $93 on MSCI ACWI (ACWI-US).
Outside of our overweight countries (Japan, India, Taiwan, Greece), defensive Sectors continue to lag. We highlight buys in Technology, Services, Consumer Discretionary, Industrials, Materials/Energy, and Financials.


Key Supports Holding Strong; 10-Year Treasury Yield Below Key Resistance; Buys in Non-Defensives

<ul>
<li>Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.</li>
<li>We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI <a href="https://www.smartkarma.com/entities/ishares-msci-acwi-etf" target="_blank" data-smartkarma-citation="entities:24402:1" rel="noopener">iShares MSCI ACWI ETF (ACWI US)</a> .</li>
<li>$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US</li>
</ul>


Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.
We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI iShares MSCI ACWI ETF (ACWI US) .
$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US


Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

Our outlook remains unchanged as the weight of the evidence continues to suggest a mixed, but overall constructive market. Cyclical value Sectors continue to be our favorite areas to overweight (i.e., Energy, Materials, Manufacturing, and Transportation), while defensive Sectors also continue to be worth a look (i.e., Staples, Health Care, and Real Estate).

Our outlook remains unchanged as the weight of the evidence continues to suggest a mixed, but overall constructive market. Cyclical value Sectors continue to be our favorite areas to overweight (i.e., Energy, Materials, Manufacturing, and Transportation), while defensive Sectors also continue to be worth a look (i.e., Staples, Health Care, and Real Estate). 

Global Equity Strategy: Value Remains Leadership But Defensives Improving

Our bullish outlook continues to be supported by ongoing positive market dynamics and the absence of breakdowns for major indexes around the globe. The path of least resistance remains higher and we continue to believe a melt-up is likely in the weeks/months ahead. The global Technology, Discretionary, and Manufacturing Sectors remain leadership -- add exposure/remain overweight. The Financial Sector has been playing catch-up and continues to show signs of price and RS bottoms as expectations rise for a global recovery -- add exposure.

Our bullish outlook continues to be supported by ongoing positive market dynamics and the absence of breakdowns for major indexes around the globe. The path of least resistance remains higher and we continue to believe a melt-up is likely in the weeks/months ahead. The global Technology, Discretionary, and Manufacturing Sectors remain leadership -- add exposure/remain overweight. The Financial Sector has been playing catch-up and continues to show signs of price and RS bottoms as expectations rise for a global recovery -- add exposure.

Global Equity Strategy: Santa Claus Rally Underway

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Tachi-S is a small cap (¥30bn market cap) seat manufacturer which counts Honda and the Nissan Alliance as its key customers, though it has been growing sales to Toyota of late and has signed a partnership agreement with Toyota Boshoku, the Toyota group’s seat manufacturer. A dependence on China for profits at present is a concern, but with exposure to North America and Latin America in addition to China, the company offers a rare geographical mix for a Japanese autoparts company. At 5.2x FY2 PE the company is cheap, even compared to the sector. We examine the details below.

Tachi-S is a small cap (¥30bn market cap) seat manufacturer which counts Honda and the Nissan Alliance as its key customers, though it has been growing sales to Toyota of late and has signed a partnership agreement with Toyota Boshoku, the Toyota group’s seat manufacturer. A dependence on China for profits at present is a concern, but with exposure to North America and Latin America in addition to China, the company offers a rare geographical mix for a Japanese autoparts company. At 5.2x FY2 PE the company is cheap, even compared to the sector. We examine the details below.

Tachi-S – Ramped Investment into a Revenue Contraction but There Is Value and a Hint of a Recovery

Japan

TOYOTA BOSHOKU CORPORATION manufactures automobile parts and textile products. The Company provides automobile interior components such as seats, door trims, headliners, carpets, and other interior products as well as exterior components such as bumpers and fender liners. TOYOTA BOSHOKU also manufactures air filters, oil filters as well as seat fabrics and high-performance uniforms.

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Toyota Boshoku (3116 JP)

Key Supports Holding Strong; 10-Year Treasury Yield Below Key Resistance; Buys in Non-Defensives

We remain constructive on global equities as long as $ACWI remains above $93 (1+ year base support). 10-year Treasury yield $TNX holding below 4.3...

Vermilion Research

Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

Normal Pullback, or Something More for global equities?; Watch Resistance on $DXY and 10-Yr Treasury Yield; Value Buys in Consumer Discretionary...

Vermilion Research

Global Equity Strategy: Value Remains Leadership But Defensives Improving

Cyclical value Sectors continue to be our favorite areas to overweight, while defensive Sectors also continue to be worth a look (i.e., Staples,...

Vermilion Research

Global Equity Strategy: Santa Claus Rally Underway

Our bullish outlook continues to be supported by ongoing positive market dynamics and the absence of breakdowns across indexes, and we continue to...

Vermilion Research

Tachi-S – Ramped Investment into a Revenue Contraction but There Is Value and a Hint of a Recovery

Tachi-S is a small cap (¥30bn market cap) seat manufacturer which counts Honda and the Nissan Alliance as its key customers, though it has been...

Mio Kato

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