Summing Up The Week

The markets continued to soften this week as the reality of no stimulus package before the presidential election began to set in. Additional negative news catalysts included poor economic data in the form of retreating mortgage applications and global strife with Russia and Iran allegedly attempting to interfere with U.S. elections.

Let’s take a look at the news that moved the markets this week…

Market News

Pelosi gives White House 48 hours to reach stimulus deal

On Sunday, House Speaker Nancy Pelosi gave the Trump administration 48 hours to reconcile remaining stimulus deal disputes and pass a bill before the 2020 election, reported CNBC.

Pelosi was careful to also point out that the deadline only pertained to getting a stimulus deal passed before the election, not that a stimulus deal wouldn’t pass at all unless it was made in the 48 hours. “We’re saying to them, we have to freeze the design on some of these things – are we going with or not and what is the language?” she said in an interview on ABC News. “I’m optimistic, because again we’ve been back and forth on all this.”

While the question of a second stimulus deal seems to be “when” not “if,” the markets have sold off in recent months at the potential of a deal not passing prior to the election in November. Now that the election is only a few weeks away, analysts on Sunday posited whether or not the market would react negatively to a deal not being passed prior to the election.

On Monday, the markets weakened and sold off as the potential for stimulus prior to the election seemed bleak. As talks yielded no fruit throughout the week, the markets continued to exhibit weakness as traders started to acknowledge the likelihood that no new stimulus would make it to the American public prior to the election.

Mortgage demand falls for fourth straight week

Mortgage demand decreased for the fourth straight week in a row according to the Mortgage Banker Association’s index, reported CNBC on Wednesday.

Purchase demand dropped 7% compared to four weeks ago and as the average interest rate for a 30-year fixed-rate mortgage increased to 3.02% from 3%. Despite interest rates at a full percentage point higher a week ago, buyer demand appears to have slowed, although economists are unsure if this drop in demand is due to COVID-19 or other factors.

Regardless of the reason, lower interest in homebuying is not a good sign for economic recovery and economists will continue to watch this sector closely.

Iran attempts U.S. election interference

Iran appeared to have been taking steps to interfere in the U.S. presidential election while Russia has obtained American voter information, the FBI announced in a press conference on Wednesday night, reported CNBC.

Acting committee Chairman Marco Rubio (R-Fla.) and Vice Chairman Mark Warner (D-Va.) said they “urge every American – including members of the media – to be cautious about believing or spreading unverified, senational claims related to votes and voting.”

While unsettling, the news had little real impact on stock market futures as traders and investors eyed stimulus talks and economic data as having more importance to moves in the markets.

Jobless claims drop to lowest level since March

First-time claims for unemployment benefits totaled 787,000 last week versus the 875,000 expected by economists and marked the lowest level since the pandemic started in March, reported CNBC on Thursday.

On its face, a lowering jobless claims number appears positive, but the media finally started picking up on the figure’s inability to accurately portray true unemployment as CNBC stated, “One reason for the decline in jobless claims has been the migration of workers who have exhausted their regular benefits and have moved to the Pandemic Unemployment Assistance emergency compensation program.”

The Pandemic Unemployment Assistantce program isn’t included in the Labor Department’s unemployment calculations, combined with the fact that unemployment benefits expire, potentially hundreds of thousands, if not millions, of unemployed Americans may not be counted in the ongoing figures.

The result? An economy that is in even worse shape than believed.

Next Week’s Gameplan

The markets feel nervous as if everyone’s preparing to sell on any negative news catalyst or “Black Swan” event.

To make matters worse, some Bearish analysts believe we’ll see a “sell-the-news” event where investors and traders will sell the markets the instant a stimulus package is passed. Others believe we’ll see the market sell off if a stimulus package isn’t passed before the election.

On the Bull side, analysts believe we’ll see a rally into the presidential election as Joe Biden’s lead widens, counter-intuitively. Typically, Democrats raise taxes which slows the stock market, however, Bull analysts believe stimulus will have a bigger effect on the market than taxes so the potential of a bigger package from Dems over the Republicans means better gains in the markets… at least temporarily.

For me, all of the potential volatility heading into the election means calmly reviewing my trading plans and price targets, adding to positions if the opportunity presents itself, and taking profits where my discipline dictates I need to.  

This Week in Play

Stay tuned for this week’s episodes of my two portfolios Investments in Play and Speculation in Play coming online later this weekend! 

Crytpo Corner

Important Disclaimer

Get Irked contributors are not professional advisers. Discussions of positions should not be taken as recommendations to buy or sell. All investments carry risk and all readers must accept their own risks. Get Irked recommends anyone interested in investing or trading any asset class consult with a professional investment adviser to determine if an investment idea is suitable to them and their investment goals.

Bitcoin's Road to Nowhere - Get Irked

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Bitcoin Price (in USD)


Weekly Change

Bitcoin Price Action

Bitcoin finally blew threw $12,486.61 – 2020’s previous high – to make a new yearly high at $13,250.04 on Wednesday following news that Paypal would begin offering cryptocurrency options to its customers (Source: CNN).

The resulting powerful bull rally also caused Bitcoin to blast past the Support of Last Resort trendline which continues to be a point of significant battling between the Bulls and Bears over the years.

The Bullish Case

Bulls believe the mass adoption of Bitcoin by companies like Paypal combined with the perception that cryptocurrency could be used as a safe haven storage of wealth will lead Bitcoin higher. Should Bitcoin be able to break through and stay above $13,868.44 (the high of 2019), Bulls believe the next stop is its all-time high at $19,891.99 with new all-time highs made shortly thereafter.

The Bearish Case

Bears were caught flat-footed by this rally and many are licking their wounds with no unique commentary since Bitcoin’s rally. However, some Bears argue that the media’s excessive coverage of Bitcoin’s recent run will result in a selloff similar to what happened in January 2018 following Bitcoin’s last all-time high. Bears continue to point to the positive correlation between Bitcoin and the stock market, suggesting that if the stock market sells off before the end of 2020 as many expect, Bitcoin will follow and plummet, too.

Bitcoin Gameplan

Current Allocation: 1.161% (-0.421% from last week)
Current Per-Coin Price: $9,950.45 (-5.568% from last week)
Current Profit/Loss Status: +30.312%

After Bitcoin broke through last week’s high, it began price consolidation around $11,750-$11,800 so, just like last week, I used stop-loss limit orders to take some of my position off the table at $11,722 on Monday. On Thursday, I once again used stop-loss limit orders to take profits in some more of my position once Bitcoin broke through $13k, selling some at $12,920.

This week’s sales lowered my allocation -0.421% to $1.161% and reduced my per-coin cost by -5.568% from $10,537.14 to $9,950.45.

If Bitcoin continues its bull run, I’ll continue using stop-loss limit orders to pull profits until I’ve removed my initial capital where I’ll reboot the trade.

If Bitcoin sells off, I’ll start adding slightly above $10,000 and use my revised trendlines and analysis performed during the week to add more at lower levels if it continues to drop. Historically, Bitcoin pulls back to its 200-day Simple Moving Average (SMA) before rocketing to new all-time highs, which means we could potentially see Bitcoin drop to the low $9900s before breaking $20k, a huge buying opportunity if it happens again. 

Bitcoin Buying Targets

Using Moving Averages and supporting trend-lines as guides, here’s my plan of buying quantities and prices:

0.709% @ $10,059
0.935% @ $9927
0.935% @ $9317
0.935% @ $8806
0.935% @ $8322
0.935% @ $7816
2.039% @ $6750
5.835% @ $5632
5.835% @ $5108
13.260% @ $4276


Why the differing quantities at each level instead of a flat percentage?
Rather than buying an equal percentage, I change my buying quantity at each stage as a reflection of how likely Bitcoin could bottom and rebound from that stage. Rather than increasing my quantity on the way down, I’m used a fixed amount of money, so I’m basing how much I buy by how likely I think Bitcoin will drop to a certain level. In this case, I don’t think it’s likely Bitcoin will be able to break its $3128 low, so my quantities under that price point are less to account for the chances it will get to them.

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.
While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (sometimes a drop of near -90% or a gain of up to +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are just a few recent price movements over the past couple of years:

  • Bitcoin rose +2,707% from its January 2017 low of $734.64 to make an all-time high of $19,891.99 in December of the same year.
  • Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
  • In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
  • From June 2019, Bitcoin dropped -54% to a low of $6430.00 in December 2019.
  • From December 2019’s low, Bitcoin rallied +64% to $10,522.51 in February 2020.
  • In March 2020, Bitcoin dropped -63% to a low of $3858.00, mostly in 24 hours.
  • From March 2020, Bitcoin rallied +243% to $13,250.04 in October 2020.
  • Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?
The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero.

I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated less than 2% of my assets to speculating in crypto.

I feel that anyone who doesn’t fully believe in the long-term viability of cryptocurrency would be better served not speculating in the space.

On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator. If a speculator isn’t confident in the space, the moves will cause mistakes to be made.

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.

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Suicide Hotline – You Are Not Alone

Studies show that economic recessions cause an increase in suicide, especially when combined with thoughts of loneliness and anxiety.

If you or someone you know are having thoughts of suicide or self-harm, please contact the National Suicide Prevention Lifeline by visiting or calling 1-800-273-TALK.

The hotline is open 24 hours a day, 7 days a week.