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

<ul>
<li>Snap-Back rallies have continued in the largest global equity markets (U.S., Japan, and Europe).</li>
<li>Japan's TOPIX is still below 2690-2700 and the EURO STOXX 50 is below 4884, and whether they roll over here or from marginally higher levels, lower highs remain likely.</li>
<li>It all fits with our ongoing belief (since our July 25, 2024 Int'l Compass) that MSCI ACWI is going through a 1- to 4-month pullback/consolidation (we are one month in).</li>
</ul>


Snap-Back rallies have continued in the largest global equity markets (U.S., Japan, and Europe).
Japan's TOPIX is still below 2690-2700 and the EURO STOXX 50 is below 4884, and whether they roll over here or from marginally higher levels, lower highs remain likely.
It all fits with our ongoing belief (since our July 25, 2024 Int'l Compass) that MSCI ACWI is going through a 1- to 4-month pullback/consolidation (we are one month in).


Shift Now to Defensives; Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral Outlook Intact

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>We continue to believe a 1-4-month pullback/consolidation is ongoing. Important supports have been violated, including $110 on MSCI ACWI (ACWI-US) and $41 on MSCI EM (EEM-US).</li>
<li>We're shifting our outlook to neutral on $ACWI after being bullish since early-November 2023. Major price breakdowns combined with deteriorating market dynamics have increased the odds of a topping pattern.</li>
<li>Also downgrading Japan to market weight. 7/25/24 we said "Japan's TOPIX breaking below 2800-2815 is near-term bearish, suggests it could pull back to its long-term uptrend, or worse."</li>
</ul>


We continue to believe a 1-4-month pullback/consolidation is ongoing. Important supports have been violated, including $110 on MSCI ACWI (ACWI-US) and $41 on MSCI EM (EEM-US).
We're shifting our outlook to neutral on $ACWI after being bullish since early-November 2023. Major price breakdowns combined with deteriorating market dynamics have increased the odds of a topping pattern.
Also downgrading Japan to market weight. 7/25/24 we said "Japan's TOPIX breaking below 2800-2815 is near-term bearish, suggests it could pull back to its long-term uptrend, or worse."


Downgrading Japan; Stay Defensive; Downgrading Outlook on Global Equities $ACWI to Neutral

iShares MSCI ACWI ex US ETF / Technical Analysis

<ul>
<li>The bear market rally we have discussed since our Sept. 29 Int'l Compass has managed to surpass our price targets, which were the YTD downtrends on the ACWX-US and EFA-US.</li>
<li>As you will see below, many countries are reversing topside their 6.5-month to YTD downtrends.</li>
<li>As a result of these bullish reversals and breakdowns on the US dollar (DXY) and 10-year Treasury yield, we are upgrading our outlook to neutral. Buy on pullbacks.</li>
</ul>


The bear market rally we have discussed since our Sept. 29 Int'l Compass has managed to surpass our price targets, which were the YTD downtrends on the ACWX-US and EFA-US.
As you will see below, many countries are reversing topside their 6.5-month to YTD downtrends.
As a result of these bullish reversals and breakdowns on the US dollar (DXY) and 10-year Treasury yield, we are upgrading our outlook to neutral. Buy on pullbacks.


Positive Character Changes; MSCI ACWI Ex-US, EAFE, STOXX 50, Countless Others Reversing Downtrends

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Regional rebalance occurring among active EM funds. Out of EMEA and the major Asian nations and in to ASEAN, MENA and South America.</li>
<li>ASEAN reversal shows EM investors moving from underweight to overweight since late 2021, driven by a record ownership and a rising number of funds positioned overweight the benchmark.</li>
<li>Indonesia and Thailand the key drivers and to a lesser extent Malaysia.   The Philippines has been notably absent from the move higher, whilst Singapore allocations fell over the same period.</li>
</ul>


Regional rebalance occurring among active EM funds. Out of EMEA and the major Asian nations and in to ASEAN, MENA and South America.
ASEAN reversal shows EM investors moving from underweight to overweight since late 2021, driven by a record ownership and a rising number of funds positioned overweight the benchmark.
Indonesia and Thailand the key drivers and to a lesser extent Malaysia.   The Philippines has been notably absent from the move higher, whilst Singapore allocations fell over the same period.


<ul>
<li>Vietnam allocations hit all-time highs in Asia Ex-Japan active portfolios.</li>
<li>Still a minor allocation in absolute terms, it's out-of-benchmark status makes it the 2nd largest country overweight.</li>
<li>Vietnam Dairy Products is the most widely held stock, otherwise investment is spread lightly across a dozen or so stocks, invested in by 2 or 3 funds.</li>
</ul>


Vietnam allocations hit all-time highs in Asia Ex-Japan active portfolios.
Still a minor allocation in absolute terms, it's out-of-benchmark status makes it the 2nd largest country overweight.
Vietnam Dairy Products is the most widely held stock, otherwise investment is spread lightly across a dozen or so stocks, invested in by 2 or 3 funds.


Asia Ex-Japan Funds:  Vietnam Allocations Hit All-Time Highs

Vietnam

Vinamilk, formally Vietnam Dairy Products Joint Stock Company, is Vietnam's largest dairy company, specializing in the production and distribution of a wide range of dairy products including liquid milk, powdered milk, condensed milk, yogurt, ice cream, and infant cereal. The company also offers soy drinks, fruit juices, and tea. Vinamilk's headquarters are in Ho Chi Minh City, Vietnam, and it was established in 1976.

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Vinamilk (VNM VN)

Shift Now to Defensives; Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral Outlook Intact

Shift Now to Defensives (Health Care, Telecommunications, Utilities, and Consumer Staples); Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral...

Vermilion Research

Downgrading Japan; Stay Defensive; Downgrading Outlook on Global Equities $ACWI to Neutral

Downgrading Japan TOPIX, Nikkei; Stay Defensive; Downgrading Outlook on Global Equities $ACWI $EEM to Neutral; Many Risk-Off Signals increase odds...

Vermilion Research

Positive Character Changes; MSCI ACWI Ex-US, EAFE, STOXX 50, Countless Others Reversing Downtrends

MSCI ACWI ex-US $ACWX and EAFE $EFA reversing their YTD downtrends, with countless other countries doing the same. This is a clear character...

Vermilion Research

EM Funds Raise ASEAN Allocations

Regional rebalance occurring among active EM funds. Out of EMEA and the major Asian nations and in to ASEAN, MENA and South America.

Steven Holden

Asia Ex-Japan Funds: Vietnam Allocations Hit All-Time Highs

Vietnam allocations hit all-time highs in Asia Ex-Japan active portfolios, making it the 2nd largest overweight among active Asian investors.

Steven Holden

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