Summing Up The Week

Despite plenty of potentially market-moving news this week, traders and investors were all about the Federal Reserve Bank’s annual conference in Jackson Hole, Wyoming, even though the conference was virtual this year due to COVID.

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

Market News

FDA grants full approval to Pfizer-BioNTech Vaccine

The week kicked off with a bang when, on Monday, the FDA granted Pfizer and BioNTech full U.S. approval of their Covid-19 vaccine, clearing the path to more vaccine mandates, reported CNBC.

Up until Monday, the FDA had only granted “emergency use authorization” for the vaccine meaning employers could not require their employees be vaccinated to maintain employment. Now that the vaccine has been granted full approval, employers can now require all employees be vaccinated.

A survey from the Kaiser Family Foundation found 3 in 10 unvaccinated adults said they would be more likely to get vaccinated if one of the vaccines receives full approval. “It’s more psychological than anything else,” said Dr. Paul Offit, a voting member of the agency’s Vaccines and Related biological Products Advisory Committee. “I mean, you already have more than 320 million doses administered out there; the vaccines already have an enormous safety and efficacy profile.”

Jobless claims hold around pandemic low

On Thursday, the Labor Department reported first-time weekly new jobless claims totaling 353,000, slightly higher than the 350,000 Dow Jones estimate, reported CNBC. Additionally, the Commerce Department revised its economic reading for the second quarter, showing that the U.S. Gross Domestic Product (GDP) increased at an annualized rate of 6.6%, slightly ahead of its own estimate of 6.5% but below the 6.7% Dow Jones forecast.

Continuing jobless claims didn’t change much, dropping a mere 3,000 leaving the total number of Americans accepting continuing unemployment claims at 2.86 million, behind the four-week moving average of 2.9 million.

Taper before 2022, but no foreseeable rate hikes

On Friday, Federal Reserve Chairman Jerome Powell indicated in a speech that the central bank is likely to begin decreasing its easy-money policies before 2021 ends, but interest rate hikes are far off, reported CNBC.

“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test,” said Powell at the virtual Jackson Hole summit. “We have much ground to cover to reach maximum employment.”

Powell did acknowledge the ongoing inflation, but expressed priorities must be of the utmost importance. “Inflation at these levels is, of course, a cause for concern,” he said. “But that concern is tempered by a number of factors that suggest these elevated readings are likely to prove temporary.”

The markets took Powell’s remarks as good news and rose into Friday trading.

Next Week’s Gameplan

September is a notoriously volatile month as traders return from summer vacations and investors plan for the end of 2021. Some years, September finishes in the green, other years, like 2020, September finishes in the red.

As always, the best plan is to have a plan for both directions – what will you do if the market goes higher? What will you do if the market sells off?

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

Bitcoin Price Action

Bitcoin hit $50K before retreating

Bitcoin broke through $50K this week, hitting $50,505.00 on Monday, its highest print since right before the crash in May on May 15. The crypto retreated after that point, dropping to a weekly low of $46,315.48 on Thursday before finding support.

The Bullish Case

Bulls believe Bitcoin’s relatively gentle pullback this week represents price consolidation before the crypto will get its next wind and head higher. Some analysts still claim we’ll see a high of $200K+ before the end of 2021.

The Bearish Case

Bears believe we’ll see Bitcoin retrace to $36,000-$37,500, at the minimum, with a pullback to retest the $28,800 and lower as the more likely option. Just as in the past few months, Bears believe the crypto will make its way under $10,000 before it has any chance of making new all-time highs.

Bitcoin Gameplan

*Trade Closed: +8.523% Gain in 4 Days*

Another week, another completed trade, right? On Saturday, I decided it was time to close the trade I opened on Tuesday when the crypto marked looked toppy. My sell order filled at $48,800.00.

After fees, my starting price was $44,814.73 and my selling price was $48,634.14, giving me a +8.523% gain over just 4 days (an annualized gain of +777.72%!). The trade carried a very small allocation but still added 0.26% to my banked crypto.

Quick Crypto Portfolio Update: By using my “Trade-to-Invest” strategy where I keep my profits in crypto over the course of 2021, I have increased my actual Bitcoin holdings by +15.488%, my Ether holdings by +5.297%, and my entire crypto portfolio is up +33.668% in terms of USD as of Sunday’s pricing. I wish my stock portfolios were performing this well… LOL!

New Trade Opened on Pullback from $50K

Current Allocation: 0.215% (*New Trade*)
Current Per-Coin Price: $47,030.31 (*New Trade*)
Current Profit/Loss Status: +0.34% (*New Trade*)

When Bitcoin lost support and dropped back below $50K, I opened a new trade when Bitcoin made a try for its 21-Day Moving Average Wednesday night with a small 0.215% allocation which opened at $47,030.31 (after fees).

Bitcoin Buying Targets

Using Moving Averages and supporting trend-lines as guides, here is my plan for my next ten (10) buying quantities and prices:

0.054% @ $45,008
0.135% @ $41,861
0.135% @ $40,588
0.135% @ $39,310
0.135% @ $37,155
0.135% @ $35,008
0.135% @ $33,813
0.193% @ $31,957
0.313% @ $30,419
0.362% @ $29,056

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 some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• 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 crashed -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 crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January, Bitcoin dropped -32% to a low of $28,732.00.
• In February 2021, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In March 2021, Bitcoin rallied +44% to a new all-time high of $61,788.45.
• Later in March, Bitcoin dropped -19% to a low of $50,305.00.
• In April 2021, Bitcoin rallied +29% to a new all-time high of $64,896.75.
• In June 2021, Bitcoin crashed -56% to a low of $28,800.00.

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 that 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.