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

Deputy Chief Economist

Sharmila Whelan

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Macroeconomics

We have been losing confidence in the Japanese growth story for some time, arguing that the best is behind. The reason for staying long Japanese equities is the underlying strength of corporate balance sheets. We prefer Japanese companies that are globally diversified especially those invested in the regional growth story and those increasing exposure to China’s Belt and Road Initiative.

We have been losing confidence in the Japanese growth story for some time, arguing that the best is behind. The reason for staying long Japanese equities is the underlying strength of corporate balance sheets. We prefer Japanese companies that are globally diversified especially those invested in the regional growth story and those increasing exposure to China’s Belt and Road Initiative.

The so called global savings glut is a popular theme among mainstream economists and an excuse frequently used by global central bankers to explain why after more than a decade of pump-priming global growth remains relatively lacklustre. Its all done to those Chinese, German and Japanese companies and households that save too much and spend too little of course you would respond. But here’s a thought – suppose it is down to a global glut of poor policy decisions?

The so called global savings glut is a popular theme among mainstream economists and an excuse frequently used by global central bankers to explain why after more than a decade of pump-priming global growth remains relatively lacklustre. Its all done to those Chinese, German and Japanese companies and households that save too much and spend too little of course you would respond. But here’s a thought – suppose it is down to a global glut of poor policy decisions? 

Japan’s policymakers continue to fret about the lack of inflation but it is worth remembering the norm globally and historically is for the price of manufactured goods to decline over time. As companies grow, specialise and scale up the cost of production falls and with it final consumer goods prices. Falling retail prices which increase consumer real purchasing power is good news for Japanese households and for discretionary spending. Moreover with labour productivity growth outpacing wages costs by a wide margin, companies can absorb lower prices without sacrificing profitability. Stay overweight Japanese equities.

Japan’s policymakers continue to fret about the lack of inflation but it is worth remembering the norm globally and historically is for the price of manufactured goods to decline over time. As companies grow, specialise and scale up the cost of production falls and with it final consumer goods prices. Falling retail prices which increase consumer real purchasing power is good news for Japanese households and for discretionary spending. Moreover with labour productivity growth outpacing wages costs by a wide margin, companies can absorb lower prices without sacrificing profitability. Stay overweight Japanese equities.

Japanese Inflation - Much Ado About Nothing

Following 3Q’s contraction, economic activity rebounded in the final quarter of 2018 led  by investment spending. Global trade tensions and the planned increase in the consumption tax in 2019 are headwinds but we expect the Japanese economy to sail through. The investment upcycle remains intact underpinned by rising profits and consumption spending well supported by easy monetary and fiscal policy. We reiterate our overweight call on Japanese equities.

Following 3Q’s contraction, economic activity rebounded in the final quarter of 2018 led  by investment spending. Global trade tensions and the planned increase in the consumption tax in 2019 are headwinds but we expect the Japanese economy to sail through. The investment upcycle remains intact underpinned by rising profits and consumption spending well supported by easy monetary and fiscal policy. We reiterate our overweight call on Japanese equities. 

Japan

WisdomTree Japan Hedged Equity Fund is an exchange-traded fund incorporated in the USA. The Fund seeks investment results that correspond to the WisdomTree Japan Hedged Equity Index. The Fund invests in dividend paying companies incorporated in Japan and listed on the Tokyo Stock Exchange, while neutralizing the risk of the Japanese yen's fluctuations relative to the USD.

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Wisdomtree Japan Hedged Eq (DXJ US)

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

Japan: Don't Hold Your Breath

We have been losing confidence in the Japanese growth story for some time, arguing that the best is behind. The reason for staying long Japanese...

Sharmila Whelan

High Savings - The Curse Of Plenty?

The so called global savings glut is a popular theme among mainstream economists and an excuse frequently used by global central bankers to explain...

Sharmila Whelan

Japanese Inflation - Much Ado About Nothing

Japan’s policymakers continue to fret about the lack of inflation but it is worth remembering the norm globally and historically is for the price...

Sharmila Whelan

Japan: Upcycle Intact

Following 3Q’s contraction, economic activity rebounded in the final quarter of 2018 led by investment spending. Global trade tensions and the...

Sharmila Whelan

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