Summing Up The Week

While the week started off in the red, reassuring labor market numbers throughout the weeks caused the stock market to bounce back as investors and traders seem to have formed a consensus around the “Soft Landing” thesis, the idea that the Federal Reserve will perfectly thread the needle with its raising rates and not cause a recession.

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

Market News

Job openings miss – 8.73M vs 9.4M expected, lowest since 2021

On Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) showed a total of 8.73 million jobs for October against the 9.4 million expected by Dow Jones economists, reported CNBC. The datapoint was the lowest since March 2021, leaving some pundits suggesting that maybe the Federal Reserve has tightened the interest rates too much and has caused a contraction.

On the bright side, this could indicate that the Fed is actually seeing success at tamping down inflation, which, for the moment, is a bigger priority than a robust job market (although that thesis could quickly change if we see unemployment numbers rise as some Bears expect).

Private Payrolls increased 103K vs 128K expected

On Wednesday, private payroll processor ADP released figures showing private payrolls increased by 103,000 in November, down from the 128,000 estimated by Dow Jones, reported CNBC. The markets rallied, believing this as a sign that the economy is slowing and, therefore, the “Soft Landing” thesis is taking place.

Payrolls rose 199K vs 190K expected, unemployment falls

What’s been a recurring theme, the official Labor Department’s jobs report, released Friday, gave opposite information to the ADP report released earlier in the week. According to the report, U.S. payrolls rose 199,000 in November versus the 190,000 expected by Dow Jones economists and inflation declined to 3.7% where the expectation had been 3.9%, reported CNBC.

As a result of a stronger-than-expected jobs report, stocks rallied on the back of the release of the report, believing the economy remains strong and resilient.

Next Week’s Gameplan

On Thursday, I jokingly tweeted that the S&P 500 would rally if the jobs report came in cool because that supports the “soft landing” thesis and that the S&P 500 would also rally if the jobs report came in hot because that would show the economy is strong and resilient. At this point, it appears nothing will cause the bulls to lose their edge.

For me, I remain disconcerted. With the amount of debt on the U.S. government’s balance sheets and the trillions in commercial real estate loans that will need to be refinanced combined with ever-increasing credit card debt and delinquencies, I really feel like the stock market is whistling past the graveyard.

However, as I always say, my personal feelings on the stock market do not interfere with my investing discipline. If stocks continue to rally, I will take profits where appropriate. If stocks sell off, I will add where appropriate.

If the bulls are right and the market rallies into the end of the year, this will be an incredibly good year for many investors including myself. For example, at the time of writing, my Investments in Play portfolio is +27.07% for the year, a full +7% of outperformance over the S&P 500’s 20.07%.

I still can’t feel like we’re living on borrowed time, however…

Regardless, I hope you all have an excellent week, and I’ll see you back 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

Has Bitcoin Finally Replaced Gold?!

On Sunday, both Bitcoin and gold exhibited incredible price action with gold rocketing to a new all-time high and Bitcoin shooting through $40,000 and eventually even higher throughout the week, setting an amazing new high on Tuesday at $45,000.00.

However, the two assets diverged dramatically. Shortly after hitting its all-time high, gold sold off in spectacular fashion, giving back all of the gains it saw when trading first started on Sunday and then even proceeded further below Friday’s close during Monday’s trading, leaving many goldbugs bewildered as Bitcoin, the “digital gold,” surpassed its weekend highs and didn’t look back.

After weeks spent contending with the Next Support of Last Resort, I do believe Bitcoin has successfully flipped its resistance into support (as the name implies). This would make Bitcoin’s next key level of rising support right around $38,200.

The Bullish Case

Bulls can certainly give themselves a pat on the back for having confidence that Bitcoin was in the midst of an epic bull rally. While the verdict on whether this is a new bull market cycle will remain up in the air until Bitcoin makes a new all-time high above $69,000, there’s no questioning the strength of the current rally.

The Bearish Case

Bears need to take a step back and re-evaluate every thesis. Bitcoin has disproven nearly every Bearish argument, leaving some grasping at straws, suggesting that the past week’s rally was simply manipulation executed by whales in the space to draw in new buyers. While this suggestion may hold water as it has happened in the past, only time will tell whether this Bear thesis is legitimate or just a Hail Mary defense after getting smacked so incredibly hard.

Bitcoin Trade Update

Trade Reset: +13.17% in gains from 11/20-12/5

Current Allocation: 1.850% (+0.017% since Trade Start)
Current Per-Coin Price: $43,878.24 (-0.28% since Trade Start)
Current Profit/Loss Status: +0.32% (*New Trade*

Once Bitcoin went on the massive raging rally it had all week, I realized it was time to reduce my allocation and reset the trade. As Bitcoin rallied up through $40,000 and on its way to $45,000, I made a series of sale orders which reduced my allocation -1.017% from 2.85% to 1.833%.

At that point, I felt comfortable resetting my trade at $44,000 as my new cost basis, pocketing the +13.17% in profits as Bitcoin from a trade that last just a couple of weeks. 

This trade brings my actual gains in Bitcoin for 2023 to +32.56%. I try not to track my crypto gains in terms of USD since I’m eyeing the prize – the long term – instead of measuring my gains in fiat. As a result, I now have 32.56% more Bitcoin than I did at the start of the year. Yes, it’s been a very good year.

I was able to make one small buy in my new position at $43,056.00 which lowered my per-coin cost -0.28% from $44,000.00 to $43,878.24 and increased my allocation +0.17% from 1.833% to 1.850%.

From here, I’m back to square one in managing the trade, but that’s fine. Personally, I’m actually hoping for a significant pullback so I can start back to my allocation as it’s difficult to tell which way Bitcoin wants to head from here. 

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% @ $42,062
0.014% @ $41,041
0.014% @ $40,068
0.014% @ $39,123
0.014% @ $38,212
0.014% @ $37,301
0.014% @ $36,605
0.016% @ $35,521
0.168% @ $34,707
0.195% @ $33,872

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 +81% to a high of $45,000.00.

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.