This week the S&P 500 declined by -2.4% to close the week at 4224. Price is now trading at a confluence of support we mentioned several weeks ago; the weekly 50 SMA (Simple Moving Average) at 4185, the January pivot high at 4195, the daily 200 SMA at 4233. As price has closed below the daily 200 SMA we will not be taking any new positions, and will closely monitor the S&P 500. Price remains 21% above the October lows, and we continue to remain long-term bullish. We will let price dictate our next move.
Despite this round of pullbacks, we are seeing individual stocks perform well. Our portfolio currently compromises 15 US stocks and 3 currencies. We have compounded a number of these assets, in turn, delivering excellent profit for our Phoenix community members.
The FTSE 100, the UK’s premier index, followed up last week’s gain with a bearish engulfing weekly candle, declining -2.6%. Price is now trading below the weekly 50 SMA, but remains above the weekly 200 SMA. Looking at the bigger picture, price remains in a large range of consolidation between 7200 and 7700. Should strength return, the next major area of potential resistance is the pivot high from 17 April at 7936. The all-time high is 8047. We continue to monitor this index, waiting for confirmation of direction.
US & UK INDICES OVERVIEW
The three US indices – S&P 500, Nasdaq 100, and Dow Jones 30 – all peaked in early January and all have declined throughout 2022, by 17%, 26% and 13% respectively. All three indices are trading below the daily 200 simple moving average (SMA).
May’s monthly candle for all indices is displaying indecision. However, we are not currently considering short positions, as all indices are above the weekly 200 SMA and we believe the long term trend, which commenced in 2008, is the dominant market direction.
The UK index we track, the FTSE 100, has performed significantly better in 2022, with a modest gain to date of 0.6%. However, price action has been very volatile with price trading between 6788 and 7688 – a range of 13%. May’s monthly candle is currently showing a decline of 1.7% with a large wick below the price.
OUTPERFORMING ASSET FOR THE WATCHLIST
ConocoPhillips - COP
ConocoPhillips (ticker: COP) is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas. The company has operations in 15 countries, with 49% of its production in the United States.
COP is a stock with an interesting history of strong trends, such as 2004-6 and more recently, throughout 2021-22. Price created an all-time high in November at $138. Price subsequently retreated to the $100 round number where it found support. Price has since gained 26%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Whilst on the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages, which are all aligned and diverging, indicating near-term strength.
Looking ahead, a continuation pattern above the current all-time high at $138 could offer our Phoenix community members an opportunity in a good-performing stock. The next area of potential resistance is the $200 round number.
OUTPERFORMING ASSET FOR THE WATCHLIST
CHF/JPY is the symbol used to denote the currency exchange rate for the Swiss Franc and Japanese yen. CHF/JPY is one of the most liquid and traded currency pairs in the world.
CHF/JPY is an asset with a history of trends. The current, long term trend commenced in October 2021, and has subsequently gained 40%. On the monthly time frame, price has been in a bullish trend since February when price retraced to a key support level at 140.0. Price was particularly bullish in June with a gain of 5.4% and again this month with a further gain of 2.9%.
On the weekly time frame, price is trading above both the 50 and 200 SMAs. Whilst on the daily time frame, a decline in September was met by strong buying in October, resulting in a resumption of the long term trend. Price is currently trading above all moving averages on both the weekly and daily time frames.
Looking ahead, the next area of potential resistance is the 200 round number. As we have this asset in our portfolio, compounding on multiple occasions, we will continue to monitor it, and update our Phoenix community with further opportunities.
This week has seen the bears challenge October’s modest gains. As long term inventors, patience is a key weapon in our arsenal. We continue to apply the necessary patience, and await price to dictate our next move. Despite the recent pullback, our position is the bulls remain in control, resulting in opportunities for savvy investors, such as those in our Phoenix community.
At Sublime, our unwavering commitment lies in conducting thorough analysis based on objective data and factual evidence presented in the charts. By adopting this approach, we aim to provide valuable guidance to our esteemed Phoenix community, collectively exploring opportunities that hold the potential for long-term, profitable trades.
Keep it simple. Keep it Sublime.
The ST Team
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