Welcome to another edition of our weekly newsletter where we provide an overview of the main US and UK indices, a specifically selected outperforming asset with deep analysis, and finally, an analysis of an asset we have in our portfolio, including a discussion on the returns the asset is generating for our Phoenix members.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
This week the markets have again demonstrated the importance of education – knowing how to scan for the best opportunities, along with how to manage positions. Whilst volatility remains, those that hold the knowledge, such as members of our Phoenix community, will continue to navigate the markets with confidence.
On the monthly time frame, the S&P 500 continues to trade within a large channel from the high in January. A close above the high in June and July at 4200 would represent a breakout of the channel. This week the S&P 500 declined by 4.5%. On the weekly time frame price continues to trade below the 50 SMA but remains above the 200 SMA. Whilst on the daily time frame, this week price declined to close below both the 20 and 50 SMA – price is now trading below all moving averages, and this week the 20 SMA crossed below the 50 SMA. Friday provided some hope for the bulls with a dragonfly doji, but we await confirmation.
The weakness in the S&P 500 was seen across the markets, with weekly declines in both the Nasdaq 100 and Dow Jones indices of 5.6% and 3.8% respectively. However, our position remains unchanged; we continue to seek opportunities but remain vigilant.
This week the FTSE 100, the UK index, weakened by 1.6% to remain below the 50 SMA. Price is in a range between the all-time high at 7687 and the weekly SMA, currently at 6945. On the daily time frame, weakness has resulted in price closing below all three moving averages which are in a tight range between 7350 and 7400. As with the US indices, we are actively looking for opportunities, but remain vigilant.
OUTPERFORMING ASSET FOR THE WATCHLIST
AZPN - Aspen Technologies
Aspen Technology, Inc., known as AspenTech, is a provider of software and services for the process industries headquartered in Bedford, Massachusetts. AspenTech has 35 offices around the world, on all continents (excluding Antarctica). Founded in 1981, AspenTech was born out of a joint research project between the Massachusetts Institute of Technology (MIT) and the US Department of Energy—called the Advanced System for Process Engineering (ASPEN) Project.
AZPN is a stock with a history of linear trends dating back to 2011. These trends are evident on the monthly time frame during 2012-13 and 2016-18. Price broke above last year’s high in May and has since gained 43%, resulting in an all-time high last month of $230.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. Price action has mixed over recent weeks, with price making an all-time high 18 August, followed by a pull back, and then rebound to touch the previous all-time high.
On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages and, importantly, all moving averages are aligned.
Looking ahead, the next area of potential resistance is the 250 round number, followed by the 300 round number. A continuation pattern above the all-time high and the formation of a linear trend could present opportunities for our Phoenix community members.
USDJPY is an asset with a history of trends. As we mentioned previously, investing in forex assets can be difficult, but with the proper knowledge and support, such as that which our Phoenix community receive, successfully trading the asset class is achievable.
We first entered USDJPY earlier this year. Price has been particularly bullish since price broke above last year’s high at 115.52, with a gain to date of 24%. August’s monthly candle closed very bullish with a gain of 4.3%, whilst September’s candle has continued the momentum with a gain to date of 2.8%. We will monitor this asset as it approaches the 150 round number.
The return to date on the total portfolio is currently 7%; we have compounded this position twice, and we anticipate this asset trending for many months as we continue to see strength in the US Dollar Basket (‘DXY’).
The total amount of time required to set up and manage this trade has been less than two hours – this is the benefit of trend trading; using higher time frames such as monthly and weekly charts avoids the noise and stress of shorter time frames. This approach enables busy professionals the freedom to pursue other interests and avoid hours each day in front of a trading screen.
This week the US and UK indices have declined as broad volatility in 2022 continues. As mentioned in previous weeks, price never moves in a straight line. We continue to actively monitor all markets, scanning for opportunities such as the stocks described today, along with the JPY forex pairs and Dollar strength, and sharing these with our Phoenix community for excellent returns.
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Keep it simple. Keep it Sublime.
The ST Team