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>Since early-October we have discussed our expectation for a bear rally, targeting the 200-day MAs on the $IWM and $SPX; targets were hit (within 0.5% of hitting on SPX).</li>
<li>We are now seeing short-term uptrend breaks on the IWM and the DJIA; this is a good time to get defensive and/or take profits, as the 1.5-month rally appears over.</li>
<li>We expect more weakness in the weeks ahead, and we cannot rule out another test of the 2022 lows.</li>
</ul>


Since early-October we have discussed our expectation for a bear rally, targeting the 200-day MAs on the $IWM and $SPX; targets were hit (within 0.5% of hitting on SPX).
We are now seeing short-term uptrend breaks on the IWM and the DJIA; this is a good time to get defensive and/or take profits, as the 1.5-month rally appears over.
We expect more weakness in the weeks ahead, and we cannot rule out another test of the 2022 lows.


Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>We write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their the innovation scores and inclusion in the portfolio.  </li>
<li>The three companies are <a href="https://www.smartkarma.com/entities/johnson-johnson-831a1ab9-b291-4564-99b0-dc7f8d2b8175" target="_blank" data-smartkarma-citation="entities:26818:1" rel="noopener">Johnson &amp; Johnson (JNJ UN)</a> , <a href="https://www.smartkarma.com/entities/mondelez-international-inc" target="_blank" data-smartkarma-citation="entities:8111:1" rel="noopener">Mondelez International (MDLZ US)</a> and <a href="https://www.smartkarma.com/entities/qorvo-inc" target="_blank" data-smartkarma-citation="entities:11965:1" rel="noopener">Qorvo Inc (QRVO US), which have the highest weighting in each portfolio</a>
</li>
<li>For the week the large cap portfolio was up 1.2%, the midcap was up 1.4% and the small cap was up 0.9%, all in US$ terms.  </li>
</ul>


We write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their the innovation scores and inclusion in the portfolio.  
The three companies are Johnson &amp; Johnson (JNJ UN) , Mondelez International (MDLZ US) and Qorvo Inc (QRVO US), which have the highest weighting in each portfolio

For the week the large cap portfolio was up 1.2%, the midcap was up 1.4% and the small cap was up 0.9%, all in US$ terms.  


How the Portfolios Did for the First Week

<ul>
<li>We compare how a portfolio composed of our top five picks in each of our thematic reports based on datamining technical publications would have performed versus Indices</li>
<li>The size of outperformance for various periods suggests that incorporating innovation quality index that we use to rank companies can be a solid tool to generate alpha.   </li>
<li>We understand that much of the outperformance is generated by positive skew but even backing out the largest two contributors we see solid outperformance.</li>
</ul>


We compare how a portfolio composed of our top five picks in each of our thematic reports based on datamining technical publications would have performed versus Indices
The size of outperformance for various periods suggests that incorporating innovation quality index that we use to rank companies can be a solid tool to generate alpha.   
We understand that much of the outperformance is generated by positive skew but even backing out the largest two contributors we see solid outperformance.


A Look at How a Portfolio Composed of Our Top Five Innovators in Each Report Would Have Performed

<ul>
<li>We continue to view the price action over the past month as a bear market bounce in the S&amp;P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM).</li>
<li>Each index appears to be forming a bearish flag pattern. Until the S&amp;P 500, QQQ, and IWM can break above their YTD downtrends, we remain bearish.</li>
<li>We continue to believe that this bear market is being fueled by the rising U.S. dollar (DXY), rising 10-yr Treasury yield, and the move higher in WTI crude oil.</li>
</ul>


We continue to view the price action over the past month as a bear market bounce in the S&amp;P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM).
Each index appears to be forming a bearish flag pattern. Until the S&amp;P 500, QQQ, and IWM can break above their YTD downtrends, we remain bearish.
We continue to believe that this bear market is being fueled by the rising U.S. dollar (DXY), rising 10-yr Treasury yield, and the move higher in WTI crude oil.


U.S. Indexes Form Bear Flag Patterns Within Downtrends; Opportunities Within Health Care

<ul>
<li>A bear market bounce is underway after the S&amp;P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM) found support at their respective downtrend channels, a possibility we discussed last week.</li>
<li>Still, until the S&amp;P 500, QQQ, and IWM can break above their various downtrends, we remain bearish, and believe investors should be using rallies to reduce overall exposure.</li>
<li>This 1-week rally has the NDX(QQQ) testing resistance at its falling wedge pattern; a break above $297 would likely mean this bear market bounce has another 2-4 weeks of upside.</li>
</ul>


A bear market bounce is underway after the S&amp;P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM) found support at their respective downtrend channels, a possibility we discussed last week.
Still, until the S&amp;P 500, QQQ, and IWM can break above their various downtrends, we remain bearish, and believe investors should be using rallies to reduce overall exposure.
This 1-week rally has the NDX(QQQ) testing resistance at its falling wedge pattern; a break above $297 would likely mean this bear market bounce has another 2-4 weeks of upside.


Signs of Disinflation?; Commodities Deteriorating; Another Bear Market Bounce; Pharma/Biotech Buys

United States

Vertex Pharmaceuticals Incorporated discovers, develops, and commercializes pharmaceutical products. The Company develops drugs for the treatment of cystic fibrosis, cancer, inflammatory bowel, autoimmune disease, and neurological disorders. Vertex Pharmaceuticals serves healthcare sector worldwide.

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Vertex Pharmaceuticals (VRTX UW)

Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.

Our targets for this bear rally have been hit, which were the 200-day MAs on $IWM and $SPX (within 0.5%). Now seeing short-term uptrend breaks on...

Vermilion Research

How the Portfolios Did for the First Week

We assess how the three portfolios did for the first week and discuss about one stock each from the large, mid and small cap portfolios, briefly...

Pyari Menon

A Look at How a Portfolio Composed of Our Top Five Innovators in Each Report Would Have Performed

Our datamining reports ranks companies within thematic based on innovation quality. We see strong outperformance in a portfolio built using the top...

Pyari Menon

U.S. Indexes Form Bear Flag Patterns Within Downtrends; Opportunities Within Health Care

We continue to view the price action over the past month as a bear market bounce in the S&P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM), as each...

Vermilion Research

Signs of Disinflation?; Commodities Deteriorating; Another Bear Market Bounce; Pharma/Biotech Buys

A bear market bounce is underway after the SPX, QQQ, and IWM found support at their respective downtrend channels. Until these indexes can break...

Vermilion Research

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