Welcome to our weekly newsletter where we provide an overview of the main US and UK indices, along with analyses of selected assets that are outperforming the market.
Let’s get into this week’s newsletter!
US & UK INDICES OVERVIEW
The S&P 500 closed the week at 5808, posting a 1.0% decline – its first weekly drop since early September. Following its August lows, the index has rallied by 14%, with October continuing the bullish trend seen in previous months.
As the US election approaches, we anticipate increased market volatility. However, our wide stop losses and long-term perspective position us well to manage through this period, regardless of the election outcome.
Year to date, the S&P 500 has achieved an impressive 23% gain. Despite some market fluctuations, the broader upward trend remains solid, with the index up 43% from its October 2023 low and 68% from its October 2022 low.
While broad indices like the S&P 500 provide an overarching view of market trends, they don’t capture the nuanced performance of individual stocks. We’ve continued to see outperformance from stocks such as NVDA, FI, PWR, ORCL, MMC, PGR, WRB, BSX, WMT, GDDY, and RSG, all highlighted throughout 2024 in this newsletter.
The Nasdaq 100 had a relatively quiet week, inching up 0.1%, while the Dow Jones posted the largest decline, down 2.8%.
In the UK, the FTSE 100 reversed last week’s gains with a 1.3% decline, ending the week at 8249.
OUTPERFORMING ASSET FOR THE WATCHLIST
Walmart Inc. – WMT
Walmart Inc. (ticker: WMT) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States. Walmart is the world’s largest company by revenue, with about US$570 billion in annual revenue, according to the Fortune Global 500 list in October 2022.
WMT’s price movements have historically shown clear trends, particularly after breaking above key monthly pivot levels. This year has been no exception, with price breaking above last year’s high in February and forming a strong, linear uptrend.
Closing the week at $83 with a gain of 1.5%, WMT reached an all-time high, contributing to a year-to-date return of 58%. The stock remains above both the 50 and 200 SMAs, signalling a robust upward trend, and our proprietary Sublime trend filter continues to indicate a bullish outlook.
On the daily chart, the trend filter remains green, highlighting the continued strength. Following its earnings report on 15 August, WMT gapped up, extending its trend and securing an additional 20% gain. The stock currently trades above the 20, 50, and 200 SMAs, with the moving averages well-aligned and price consistently using the 20 SMA as support.
Looking forward, the next level of potential resistance lies at the $100 round number. Members of our Phoenix community will be watching closely for any continuation patterns emerging above the all-time high, which may present a compelling opportunity, given the strong, long-term bullish trend in WMT.
OUTPERFORMING ASSET FOR THE WATCHLIST
CBOE Global Markets – CBOE
CBOE Global Markets (ticker: CBOE) is an American company that owns the Chicago Board Options Exchange and the stock exchange operator BATS Global Markets. Founded in 1973 by the Chicago Board of Trade and member owned for several decades, on March 11, 2010 the Chicago Board Options Exchange (CBOE) filed paperwork to launch an initial public offering and began trading on the NASDAQ stock exchange on June 15, 2010. In 2022 the CBOE had revenue of $3.96 billion and 1543 employees.
CBOE, which went public in 2010, displayed a strong trend from December 2012 to January 2018, rising 293% before entering a prolonged consolidation phase. Last August, however, CBOE broke out of this consolidation, gaining over 52% since. Although price initially pulled back at the $200 round number in February, it reclaimed this level in August and has since settled into a mini-range.
On the weekly chart, CBOE is in a robust uptrend, trading above both the 50 and 200 SMAs, with our Sublime trend filter signalling green. The daily chart confirms this positive momentum, as price holds above all major moving averages with a continued green trend signal from the Sublime filter.
CBOE has a track record of establishing trends following breakouts from pivotal levels, a crucial criterion in our stock selection approach. A continuation pattern above the current all-time high and the $200 level could present an attractive opportunity for Phoenix community members, given CBOE’s history of sustained, long-term trends.
Looking Ahead
This week, U.S. markets broke a six-week winning streak, and with the upcoming U.S. election, market volatility may increase. However, our strategic approach is designed to effectively navigate potential fluctuations, keeping us well-positioned.
Taking a broader view, our disciplined methodology has continued to deliver strong results, with our positions benefiting from ongoing positive momentum in trending stocks. This performance has reinforced the effectiveness of our approach, which remains focused on capitalising on well-defined trends.
Currently, we hold a range of positions in stocks exhibiting robust upward trends. True to our strategy, we continue to allow price action to guide our decisions, ensuring we remain closely aligned with market dynamics and ready to capture new opportunities.
At Sublime, we are dedicated to detailed, objective analysis driven by chart-based data and evidence. This focus allows us to support our Phoenix community in identifying potential for sustained, profitable trades.
Keep it simple. Keep it Sublime.
The ST Team
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