Welcome to our reformatted newsletter, where we provide an overview of the main US and UK indices, a selected 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
The three US indices – S&P 500, Nasdaq 100, and Dow Jones 30 – all peaked in early January and all have declined throughout 2022 – all reaching technical bear market levels. Whilst all three indices are trading below the daily 200 simple moving average (SMA), May’s monthly candle for all indices displayed indecision. The first week of June has commenced with weakness, albeit a shorter week with US Memorial Day on Monday.
This week has also been short in the UK with both Thursday and Friday as holidays for the Queen’s Jubilee celebrations. The FTSE 100, the UK index, performed better in May with a modest gain of 0.8%, with a large wick below the price.
Whilst all equity markets are displaying continued weakness in 2022, we are not currently considering short positions, as all indices are above the weekly 200 SMA. We should also be mindful that the indices are still trading above the pre-pandemic highs; indicating the strength of the bull run throughout 2020 and 2021. We believe the long term trend, which commenced in 2008, is the dominant market direction.
OUTPERFORMING STOCK FOR THE WATCHLIST
ConocoPhillips - COP
ConocoPhillips is a stock with an interesting history of strong trends, such as 2004-6 and more recently, throughout 2021 and 2022. Since price broke above last year’s high at $78, strength has been prevalent, resulting in a gain of 52%.
On the weekly time frame, price is trading above the 50 and 200 SMA, and the Sublime trend filter is green. This week’s price gapped and has continued higher. On the daily time frame, the Sublime trend filter is also green. Price is currently trading above all moving averages, which are all aligned. Importantly, the 20 and 50 SMA are diverging, indicating near term strength. Price is also trading comfortably above the $100 round number.
Looking ahead, a continuation pattern above the current all-time high could offer our Phoenix community members an opportunity in a very bullish stock. The next area of resistance is the $200 round number.
CHFJPY is an asset with a history of trends. Trading forex assets can be difficult, but with the right knowledge and support, such as that which our Phoenix community receive, successfully trading the asset class is achievable.
We first entered CHFJPY in October 2021 and have since compounded. We monitored the asset through the pullback in May which has to date proven to be the correct approach, as evidenced by May’s monthly candle. June has shown bullishness with strength. The return to date on total portfolio value exceeds 2% using a total risk of just 2%.
The total amount of time required to set up and manage this trade has been less than one hour over nine months – 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 markets have consolidated following last week’s strength; we await to see if the weakness experienced throughout 2022 has been exhausted. We continue to actively monitor the markets, scanning for opportunities such as COP, and sharing these with our Phoenix community for good returns.
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Keep it simple. Keep it Sublime.
The ST Team