Summing Up The Week

While a shortened trading week thanks to the Labor Day holiday, the return of trading volume to the markets brought with it the seasonal volatility I’ve been warning about for the past weeks.

Markets sold off in all sectors on very little news as returning traders and investors rotated their portfolios in preparation for the upcoming fourth quarter (as well as the seasonal downtrend expected… there’s a reason it’s called the “September Slide”).

Let’s take a look at what few news stories there were in the markets this week…

Market News

China bans government from using iPhones

On Wednesday, China banned all government employees from using Apple’s (AAPL) iPhones and reports suggested Thursday that crackdown would be extended, reported TheStreet.com. The move comes as retaliation for trade sanctions and the recent trend for companies to de-risk themselves by moving out of China to solidify supply trains and separate themselves from the communist nation.

As a result, Apple’s shares saw the biggest one-day slump in more than a month on Wednesday only to continue their slide on Thursday. China remains a huge growth engine for not only Apple but also other American multinationals like Nike (NKE) and Starbucks (SBUX), so many pundits raised concerns that what China has started with Apple will only extend to other American companies in the future, too.

Jobless claims better than expected, labor costs rising

On Thursday, jobless claims fell to the lowest level since February at 216,000 versus the 234,000 estimate and labor costs continue to increase, reported Yahoo! Finance. If “bad news is good news” for the markets, lately, than this is a case of “good news is bad news.”

The job market remains tighter than many analysts had hoped, and this is not good news for what might happen when the Federal Reserve meets later this month. While the general consensus on the Street is that the Fed will pause and not hike interest rates in September, this data could sway the opinion of the Fed, causing them to bump rates up another 0.25%.

Combine this news with the seasonal downward tendency of September and the markets continued to pull back following the report on Thursday.

Next Week’s Gameplan

Despite the Bulls trying to argue that, historically, September is an up month following a down August, I prefer to stick to my tried-and-true seasonality that shows September to be a volatile month usually resulting in a correction from the summer highs. Especially since that’s what we’ve been seeing in the last four days.

I’ve already started adding to positions in my portfolios as well as my ETF accounts where solar energy and clean energy stocks are getting hit particularly hard. In fact, the iShares Global Clean Energy ETF (ICLN) is breaking through to lows not seen since 2020 – lower than the lows it made in 2022’s pretty epic selloff.

As always, make your plan in advance, stick to it, and don’t panic during selloffs. We’ll all get through this just fine.

See you here next Friday!

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

Is Bitcoin warming up for a big move?

After the significant rally from the news of the Court of Appeals overturning the SEC ruling on the Grayscale Bitcoin Trust two weeks ago, Bitcoin has been very solidly trading in a range with many analysts expect it to make a significant move in the coming days.

Not only did Bitcoin hold the $25,350.00 low from weeks ago, it made a higher weekly high at $26,460.41, so those are now the upper and lower bands for its trading range. If the crypto cracks through resistance or breaks down through support, the momentum will take it significantly in the direction of the move.

The Bullish Case

Bulls believe that Bitcoin ETFs will be approved… and soon. Many argue that interested investors should start stocking up at Bitcoin at the current prices as it’s unlikely, in their opinion, that Bitcoin will head lower. 

The Bearish Case

Bears argue that there’s nothing positive in the micro or macro environment for Bitcoin and that the next big move will be lower. Given that we’re also in a seasonally bad time for Bitcoin, Bears believe we will see much lower lows, and I once again point to that long-term bullish/short-term bearish analyst from Blackrock a few weeks ago who believes Bitcoin will crash to $7,500. Yikes!

Bitcoin Trade Update

Current Allocation: 1.837% (+0.106% since last update)
Current Per-Coin Price: $27,890.49 (-0.54% since last update)
Current Profit/Loss Status: -7.23% (+0.36% since last update)

My buying resumed quickly, very shortly after last week’s Week in Review printed on Friday with a buy at $25,679.22 and a series of other filling over the course of the week leaving me with an average buying price of $25,617.62 (after trading fees).

The buys lowered my per-coin cost -0.54% from $28,040.70 down to $27,890.49 and raised my allocation +0.106% from 1.767% to 1.873%. 

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:

0.022% @ $25,537
0.027% @ $25,399
0.027% @ $25,206
0.054% @ $24,668
0.082% @ $24,053
0.163% @ $23,564
0.343% @ $22,949
0.430% @ $22,308
0.697% @ $21,466
0.446% @ $21,052

Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use either my Gemini or Coinbase referral links to open accounts.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

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 (possible moves include drops of -90% or more and gains of +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.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , 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 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, 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 April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In August, Bitcoin dropped -21% to a low of $25,234.76

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.