Summing Up The Week

November was an incredible month with the all of the indexes rallying spectacularly off the slightly cooler-than-expected Consumer Price Index (CPI) released a few weeks ago.

This week, an in-line Personal Consumption Expenditures (PCE) index combined with record Black Friday shopper turnout set the stage for the rally to continue through the month’s end… until Thursday when the Chicago PMI leapt pass all expectations into expansion territory.

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

Market News

Black Friday weekend turnout hits record

Despite reports that the consumer is weakening and 25% of American households still carry debt from last year’s holiday season, the National Retail Federation released figures showing 200.4 million people hit stores and websites from Thanksgiving Day through Cyber Monday, setting a new record, reported CNBC on Tuesday.

However, while consumers did spend $9.8 billion online, up 7.5% from last year, those figures are still lower than pre-pandemic figures. In other words, the promotional sales offered by online stores as well as their brick-and-mortar counterparts have been so intense, that the increased number of sales has led to lower revenue.

Some stores offered dramatic discounts with J.C. Penney’s offering an average -55% discount on every item. The retailers themselves warned investors last week that they’re expecting lower overall numbers, so it is still far too early to tell if this increased shopping traffic will reverse the theory that the consumer is weakening.

PCE rises 0.2% in October, 3.5% from last year, as expected

On Thursday, the Personal Consumption Expenditures (PCE) index showed an increase of 0.2% in October and a Year-Over-Year rise of 3.5%, in line with expectations from economists, reported CNBC. The PCE is the Federal Reserve’s preferred gauge of inflation and is the indicator the Fed primarily uses to determine if their policies are restrictive enough to reduce inflating prices.

Consumers may also be spending less, an outcome the Fed desires as consumption drives up prices. “I’m hearing consumers slowing down,” Richmond Fed President Thomas Barkin said Wednesday at the CNBC CFO Council Summit. “I’m not hearing [the] consumer falling off the table. I’m hearing normalizing, not recession, but I am hearing consumer slowing down.”

Chicago PMI explodes to 55.8 from 46 expected

On Thursday, the Chicago PMI came in unbelievably hot with a 55.8 rating for November versus 44 for October and significantly beating economists’ expectation for 46, reported MarketWatch.

The PMI measures industrial activity and any rating 50+ indicates economic expansion. While this is typically good news, we remain in the same “good news is bad news” territory as the Federal Reserve certainly does not want to see the economy expanding at a rapid rate. As a result, the markets, which had been initially rallying on the day, were tempered by the PMI result.

Next Week’s Gameplan

As we head into December, the Bulls believe the party will continue as they point to historical trends where, when November rallies the rally typically continues through the end of the year. Other Bulls also believe we’ll see the seasonal “Santa Claus Rally” which takes place the final trading days of the year after Christmas and the first trading days of the new year.

Bears remain much more skeptical. Many Bears point out that portfolio managers likely have their fingers on the “sell button,” prepared to go to cash at any provocation in order to preserve the incredible gains we’ve seen this year. Bears also point out that the flight to U.S. Treasurys continues which is usually a sign that the “smart money” is pulling out of risk assets in preparation for a massive selloff.

Only time will tell which of these outlooks come to fruition, so, as always, make a plan for either outcome and don’t FOMO-buy or panic-sell.

I’ll see you all here next Friday, friends!

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 makes new Year-to-Date Highs!

Bitcoin’s bullish price action doesn’t stop with the crypto breaking above its year-to-date high to set a new high on Wednesday at $38,846.09. While Bitcoin continues to struggle around the Next Support of Last Resort trendline, it appears to be magnetized to it, moving up with each passing day.

If Bitcoin can break above the trendline and flip it to support, there could be even better news for the Bitcoin Bulls on the horizon.

The Bullish Case

Bulls maintain the upper-hand as they have for weeks. Even negative news catalysts can’t seem to bring down Bitcoin as it rallies higher and higher, making higher lows and higher highs throughout the week. The price action remains Bullish and there’s no arguing that.

The Bearish Case

The Bears are starting to flip. Noted YouTube channel, DataDash, has been negative for all of 2023 and even he threw in the towel this week with videos about potential high prices of $200K+ in the next bull cycle.

Of course, for me, the fact that a long-time Bear has now capitulated is a Bearish sign to me. When there are no Bears left and everyone’s on the same side of the boat, that’s usually a sign that we’ve peaked. We’ll have to wait and see on this one.

Bitcoin Trade Update

Current Allocation: 2.850% (+0.067% since last update)
Current Per-Coin Price: $37,611.12 (-0.40% since last update)
Current Profit/Loss Status: +1.84% (+1.16% since last update)

Bitcoin started to pull back on Sunday, filling my first buy at $37,266.90 (before fees). The crypto subsequently pulled back further, filling additional buys throughout the week and leaving me with an average buy price of $36,903.48 (after fees).

When Bitcoin rallied on Tuesday, it started triggering my sell orders with my first sale filling at $38,052.70 (before fees) and a few additional sales as Bitcoin broke through past highs with my last sale at $38,442.53 on Friday morning.

The combined buys and sales lowered my per-coin cost -0.40% from $37,762.25 to $37,611.12 and raised my allocation +0.067% from 2.783% to 2.850%.

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:

0.014% @ $36,563
0.028% @ $36,156
0.028% @ $35,804
0.028% @ $35,369
0.028% @ $35,052
0.028% @ $34,507
0.028% @ $33,969
0.028% @ $33,603
0.028% @ $32,885
0.154% @ $32,202

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 September, Bitcoin dropped -22% to a low of $24,900.00.
• In December, Bitcoin rallied +56% to a high of $38,846.09.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

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.