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.

This week ended on a bearish note, triggered by President Trump threatening to impose massive increases in China tariffs. We’ll examine how the markets are performing and what we can expect going forward. Remember, we want to stay calm and objective during these times. We’ve experienced market declines and recoveries before, so we’ll apply the same logic this time as well.

Let’s get into this week’s newsletter!

US & UK INDICES OVERVIEW

S&P 500

The S&P 500 is up 11.41% so far this year, but October has thrown us some challenges. Earlier this month, things looked promising, with the month up 1.15%. However, news about tariffs shook the market, and now October is down 2.03%.

These dips can feel unsettling, but it’s worth taking a step back to see the bigger picture. We’re still in a long-term bull market, and sudden drops like this haven’t changed the overall upward trend.

Remember March and April? We saw a similar pullback then, and the market bounced back shortly after.

This past week wasn’t easy, closing down 2.43%, with Friday particularly standing out. The price dropped below support at $6,670 and is now hovering slightly above $6,530, another key support level.

If $6,530 holds, there’s a good chance we’ll see a bounce and a move back upward. But if it doesn’t, the next major support to watch is $6,147. A level we could hit in the case of a deeper correction.

So, what should you do heading into next week? First, take a breath. These moments are part of the process, and they often present opportunities.

If the decline continues, you should tighten your stops, as this protects your investments. You can always reenter the market when it starts climbing again.

On the other hand, if the support levels hold steady, consider staying the course for now. Keep a close eye on how the market behaves and look for opportunities to capitalise on as we head back up.

The key here is to stay flexible and prepared. Market fluctuations are part of the journey, and learning to navigate them is how you build resilience and long-term growth.

Think of it as an opportunity to refine your strategy and grow your confidence, as every challenge is a chance to learn.

Dow Jones

Looking at the bigger picture, the Dow is still doing pretty well this year, up almost 7%. We did see a dip of just under 2% in October, but it’s holding strong above a really important support level on the monthly chart, which is the 2024 high of $45,073.

This past week was a bit tough, with a 2.73% decline. Friday, much like the S&P 500, closed flat. It ended right around another crucial support level that could, and hopefully will, act as a rebound point moving forward.

What we’re really hoping to see next week is a quick turnaround, pushing back upwards and ideally breaking past its all-time high from October 3rd, which was $47,049.

If things do slide a bit more, there’s a solid cluster of support just below the current price, right around that 2024 high area I mentioned.

My hope is that this area holds firm, allowing the price to get back on track and continue its long-term upward trend. It’s about patience and watching for those key levels to either hold or break.

Nasdaq 100

So far this year, it’s up a strong 15.27%. However, things have been a bit shaky in October, with the month currently down 1.86%. It’s worth noting that it’s forming what appears to be a reversal candle, which could signal a change in direction.

Last week, we saw a drop of 2.27%. While that big bearish candle might seem concerning, the price did find some solid ground in a key support zone. From my experience, this is a critical moment. What we’re hoping to see now is for this support level to hold firm and for the price to turn around, which would get us back on track with the long-term upward trend.

My next target is to see the price break and close above the high we saw on October 10th, which was $25,195. If we can achieve that, it’ll be a great sign that the bulls are back in control.

FTSE 100: 

Overall, the FTSE 100 is still looking strong. It’s had a good year so far, up 15.35%, and while October ended up 0.82%, we did see it pull back a bit along with other global markets.

Just last week, we even saw it hit some new record highs. It peaked up 0.92% before closing down 0.67% by Friday.

We experienced some bearish sessions on Thursday and Friday, and now the price is pulling back. From a practical standpoint, the next key support level we’re watching is 9,358. This was a high from August 22nd, and it’s often the case that old resistance becomes new support, reinforcing it as a strong zone. If the decline continues, this is where we’d typically expect it to find its footing, reverse course, and start heading back up. Below that, keep an eye on the 9,256 level for another potential support zone.

Once we see that bounce from support and the price starts its upward journey again, our next target is a clear break and close above the October 8th high of 9,577. That would be a strong signal for continued bullish momentum.

PERFORMANCE REVIEW

Nvidia (NVDA)

Nvidia has been on a strong long-term upward trend, gaining 36.39% so far this year. While October initially showed a 4.81% rise, the stock is now down 1.83% for the month, hinting at a potential shift in momentum.

This means it’s time to focus on identifying key support levels that could prompt a bounce and keep the long-term trend intact.

Last week, Nvidia dipped 2.38%, with Friday closing down 4.89%. If you’ve been watching the charts, you might have noticed an earlier consolidation area where price stalled before climbing. 

The stock broke above that consolidation high at $184, moved sideways for a bit, and then surged to a record high of $195.

After that peak, Friday’s drop pulled prices back to a critical support zone near $182, which sits just inside the previous consolidation range.

If the $182 support level holds, there’s a good chance we could see a strong push back to the upside. But if it doesn’t, we might need to wait for prices to dip further before finding another opportunity for a reversal.

This is a moment to stay observant and patient. Watching how price reacts at this support zone will give you valuable insight for your next move. Remember, market fluctuations are part of the journey, and staying grounded in your strategy is the best way to navigate them.

OUTPERFORMING ASSET FOR THE WATCHLIST

Cencora  (COR)

Cencora has shown a strong upward trend for a while now, really picking up steam since 2018. If you look back even further, before 2015, this stock had some impressive, steady climbs. What we’re hoping to see is a return to that kind of consistent, long-term growth.

So far this year, Cencora is up a fantastic 41.53%, even gaining 1.75% in October. While other parts of the market are struggling, this stock is holding its own and even thriving.

When everything else is pulling back, the stocks that stand strong really deserve a closer look on your watchlist.

If the broader market returns to a long-term bull trend, Cencora is well-positioned to perform even better. 

History shows us that stocks which prove resilient during market weakness often lead the charge when things turn fully bullish.

Just this past week, it closed up a solid 5.03%.

Now, here’s where it gets interesting for us. We’ve just seen Cencora break out of a consolidation pattern that’s been holding it back since May.

The price has pushed past that resistance. But we don’t want to rush in. What we’re looking for to confirm this move is a clear sequence of a slight push higher, followed by a healthy pullback, and then another strong move up that breaks and closes above the recent high.

That pattern is our signal that the bull trend is truly continuing and Cencora is ready for its next big upward leg.

Looking Ahead

Just 51% of U.S. stocks are trading above their 200-day moving average, a drop from last week’s 60%. Following recent declines in the Dow Jones, S\&P, and Nasdaq, a rebound is expected before the end of the month.

Keep it simple. Keep it Sublime.

The ST Team

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