Report
Dave Nicoski ...
  • Ross LaDuke
EUR 46.93 For Business Accounts Only

Vermilion Compass: Weekly Equity Strategy

ields Testing Support Ahead Of FOMC Meeting

We continue to see signs of improving risk appetites alongside healthy market dynamics. As a result, our outlook remains constructive. A breakout to new highs in the Russell 2000 (IWM) and Russell Micro-Caps (IWC), above $234.50 and $159, would likely cause us to shift to an outright bullish stance.

Small- & Micro-Caps. The Russell 2000 (IWM) and Russell Micro-Caps (IWC) are testing key resistance at $234.50 and $159, respectively. Sustained breakouts above these levels would be a very healthy sign for the broad market and we would shift to an outright bullish stance on the broad market. On the other hand, a failure to break above these levels would mean more chop and mixed markets ahead.
S&P 500. We got the expected breakout to new all-time highs in the S&P 500 and we are now targeting 4320 with ~4400 also in the cards. In order to get there, we need short-term support to hold at 4168 followed by 4056... see chart below.
10-Year Treasury Yield, Copper vs. Gold, Value vs. Growth. The 10-year yield is testing key support at 1.45-1.5%; a break below this level could create problems for equities (esp. value and small-caps) since it would be a risk-off signal. With that said, the copper/gold ratio is NOT breaking down, an important sign considering the 10-year yield and copper/gold ratio typically track each other closely. The absence of a breakdown in the copper/gold ratio tells us lower rates are far from a foregone conclusion... see pages 3-4.
Relative Strength Turning Lower For Gold, Staples. Gold remains constructive from a price perspective as long as 1845 holds. With that said, RS for gold is turning lower at 14-month resistance, and the same can be said of RS for Staples (XLP). Underperformance from defensive areas is another risk-on signal that is characteristic of historical bull markets... see page 5.
High Yield Spreads, Bitcoin. High yield spreads are not widening or making bullish inflections, a key signal that tells us a major correction is not likely. Additionally, bitcoin is bullishly inflecting, yet another development that suggests risk appetites are improving... see page 6.
Underlyings
Allgemeine Gold- Und Silberscheideanstalt AG

Allgemeine Gold- und Silberscheideanstalt is engaged in the recovery of precious metals and the manufacture of precious metal products. Co. acts as a refinery, receiving refining materials, such as scraps, sweeps and solutions of precious metals from precious metal consuming industries. Co. refines these materials into other products, including sheets and strips, wires, tubes, solder core, casting grain, pre-alloys, gold and silver solders, special alloys, anodes and gold and silver salts for electroplating that are used in jewelry production and industrial applications.

Beam Therapeutics

Beam Therapeutics operates as a biotechnology company. Through its subsidiaries, the company is a research stage biotechnology company committed to creating a new class of precision genetic medicines, based on the company's proprietary base editing technology, with a vision of providing life-long cures to patients suffering from serious diseases.

Box Inc. Class A

Box provides a cloud content management platform that enables organizations to manage their content. With the company's Software-as-a-Service cloud content management platform, users can collaborate on content internally and with external parties, automate content-driven business processes, develop applications, and implement data protection, security and compliance features to comply with legal and regulatory requirements, internal policies and industry standards and regulations. The company's platform enables a set of business use cases across an enterprise and various file formats and media types. The company also provides offerings that address business needs via technology, services and marketing programs.

CommVault Systems Inc.

CommVault Systems is a provider of data and information management software applications and related services. The company develops, markets and sells a suite of software applications and services, mainly in North America, Europe, Australia and Asia, that provides its customers with data protection solutions. The company also sells appliances that integrate the company's software with hardware. Company also provides its customers with a range of professional and customer support services.

Dicerna Pharmaceuticals

Dicerna Pharmaceuticals is a biopharmaceutical company focused on the discovery and development of subcutaneously delivered ribonucleic acid (RNA) interference (RNAi)-based therapeutics using its GalXC? RNAi platform for the treatment of diseases involving the liver, including rare diseases, viral infectious diseases, chronic liver diseases, and cardiovascular diseases. The company's primary development programs include DCR-PHXC for the treatment of primary hyperoxaluria; DCR-HBVS for the treatment of chronic hepatitis B virus; and an undisclosed product candidate against a rare liver disease, which is in Clinical Trial Application or Investigational New Drug application enabling studies.

Dropbox Inc. Class A

Dropbox is a global collaboration platform that centralizes the flow of information between the products and services its users prefer. Dropbox allows individuals, teams, and organizations to collaborate. Anyone can sign up for free via the company's website or app, and upgrade to a paid subscription plan for additional features. Dropbox is a digital workspace where individuals and teams can create content, access it from anywhere, and share it with collaborators. The company also utilizes Amazon Web Services (AWS), for the remainder of its users' storage needs and to help deliver its services. These AWS datacenters are in the United States and Europe, which allows the company to localize where content is stored.

Fate Therapeutics Inc

Fate Therapeutics is a biopharmaceutical company. The company's off-the-shelf, induced pluripotent stem cells (iPSC)-derived cellular immunotherapy pipeline include: FT500, which is an off-the-shelf natural killer (NK) cell cancer immunotherapy for the treatment of solid tumors; and FT516, which is an off-the-shelf NK cell cancer immunotherapy. The company's other iPSC-derived cell product candidates include: FT301, an off-the-shelf, immuno-regulatory cell product candidate derived from a clonal master iPSC line. The company's allogeneic cellular immunotherapy pipeline include: ProTmune?, an investigational programmed cellular immunotherapy for use as an allogeneic hematopoietic cell transplantation cell graft.

Freshpet Inc

Freshpet manufactures and markets refrigerated meals and treats for dogs and cats. The company's products are distributed throughout the U.S. and other international markets into retail classes including Grocery and Mass, and online, and Pet specialty and Natural retail. The company's products consist of dog food, cat food and dog and cat treats, which are made according to its nutritional philosophy of fresh, meat-based nutrition and minimal processing. The company's recipes include meat and combinations of vegetables, leafy greens and anti-oxidant rich fruits, without the use of preservatives, additives or artificial ingredients. The company's products are available in multiple forms, including bagged meals and tubs.

Heska Corporation

Heska sells veterinary and animal health diagnostic and specialty products. The company's segments are: Core Companion Animal, which includes, primarily for canine and feline use, Point of Care laboratory instruments and consumables, digital imaging diagnostic instruments, software and services, local and cloud-based data services, allergy testing and immunotherapy, and single use offerings such as in-clinic diagnostic tests and heartworm preventive products; and Other Vaccines and Pharmaceuticals, which includes private label vaccine and pharmaceutical production, primarily for cattle but also for other species including equine, porcine, avian, feline and canine.

Intellia Therapeutics Inc.

Intellia Therapeutics is a genome editing company focused on developing therapeutics utilizing a biological tool known as Clustered, Regularly Interspaced Short Palindromic Repeats (CRISPR)/CRISPR associated 9 (Cas9). This is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid. The company utilizes its CRISPR/Cas9 platform across two areas: in vivo applications, in which CRISPR/Cas9 is therapy, delivered to target cells within the body; and ex vivo applications, in which CRISPR/Cas9 creates therapy of engineered human cells.

NetApp Inc.

NetApp is the data authority for the hybrid cloud. The company's product, services and solutions portfolio include: cloud data services, which include the NetApp Data Fabric, which manages, secures, and protects the data of its customers from on-premises to public to hybrid cloud; cloud infrastructure, which helps customers build cloud-architected data centers; storage systems and software, which enables customers to modernize their IT architectures with cloud-connected flash to free the resources necessary; and support services, which enable a portfolio of technical services including independent support services, support account managers, residency services, and managed services.

Nutanix Inc. Class A

Nutanix provides an enterprise cloud platform that consists of software solutions. The company's solution allows its customers to virtualize various clouds - private, public, distributed - into one cloud enabling enterprises to choose the right cloud for the right application. The company's enterprise cloud platform converges compute, virtualization, storage, networking, desktop, governance and security services in one integrated solution. Acropolis is the foundation of the company's enterprise cloud platform. Acropolis is comprised of four foundational components: Virtualization, Enterprise Storage Capabilities, Platform Services, and Networking Services.

Phibro Animal Health Corporation Class A

Phibro Animal Health is an animal health and mineral nutrition company. The company develops, manufactures and markets products for a range of food animals including poultry, swine, beef and dairy cattle and aquaculture. The company's products include animal health products such as antibacterials, anticoccidials, nutritional products and vaccines. The company's Animal Health segment also includes antibacterials and other processing aids in the ethanol fermentation industry. The company's mineral nutrition products fortify the animal's diet and help maintain optimal health. The company also manufactures and markets ingredients for use in the personal care, industrial chemical and chemical catalyst industries.

Regeneron Pharmaceuticals Inc.

Regeneron Pharmaceuticals is a biotechnology company that discovers, invents, develops, manufactures, and commercializes medicines for the treatment of diseases. The company's commercialized medicines and product candidates in development are designed to assist patients with eye disease, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, neuromuscular diseases, infectious diseases, and rare diseases. The company's products include: EYLEA (aflibercept) injection, which is used for the treatment of neovascular age-related macular degeneration, diabetic macular edema; and Dupixent (dupilumab) injection, which is used for the treatment of adult patients with atopic dermatitis.

Roche Holding AG ADS

Scientific Games Corporation

Scientific Games is a developer of technology-based products and services and associated content for the worldwide gaming, lottery and interactive gaming industries. The company's portfolio activities primarily includes supplying gaming machines and game content, casino-management systems and table game products and services to licensed gaming entities; providing instant and draw-based lottery products, lottery systems and lottery content and services to lottery operators; providing social casino solutions to retail consumers and regulated gaming entities; and providing a suite of digital real-money gaming and sports wagering solutions, distribution platforms, content, products and services.

Varonis Systems Inc.

Varonis System provides data security and analytics. The company's software enables enterprises to protect data stored on premises and in the cloud: sensitive files and emails; confidential personal data; financial records; strategic and product plans; and other intellectual property. The Varonis Data Security Platform helps enterprises protect data against insider threats and cyberattacks. The company's products enable enterprises to analyze data, account activity and user behavior to detect attacks. The company's Data Security Platform prevents or limits unauthorized use of sensitive information, prevents potential cyberattacks and limits others by locking down sensitive and stale data.

Zoetis Inc. Class A

Zoetis is a holding company. Through its subsidiaries, the company is engaged in the discovery, development, manufacture and commercialization of animal health medicines, vaccines, and diagnostic products with a focus on both livestock and companion animals. The company operates in two segments: the United States and International. The company's main product categories are vaccines, anti-infectives, parasiticides, other pharmaceutical products, dermatology products, medicated feed additives, and animal health diagnostics. The company's other non-pharmaceutical product categories include nutritionals and agribusiness, as well as products and services including biodevices, genetic tests and precision livestock farming.

Provider
Vermilion Research
Vermilion Research

Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.

Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.

Analysts
Dave Nicoski

Ross LaDuke

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