Summing Up The Week

Going into this holiday-shortened 4-day trading week, it felt like everyone and their great-grandmother was waiting for Nvidia’s earnings on Wednesday evening.

Nvidia did not disappoint.

Even with sky-high expectations which Bears claimed there was no way Nvidia would be able to beat, CEO Jen-Hsun Huang once again brought home the bacon with unbelievable revenue and forward guidance.

As crazy as it sounds, Nvidia is more or less the spirit of the markets right now. As long as everyone’s bulled up on Nvidia, the markets keep heading higher despite all of the cautionary indicators out there.

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

Market News

Mortgage demand drops with 30-yr back over 7%

On Wednesday, mortgage demand dropped -10.6% compared with the previous week thanks to interest rates spiking 30-year fixed-rate mortgages back over 7% according to the Mortgage Bankers Association’s (MBA) seasonally-adjusted index, reported CNBC.

The average interest rate for 30-year mortgages increased to 7.06% from 6.87% last week thanks to concerns that the Federal Reserve will likely not cut the benchmark rate until much later in 2024, if this year at all.

“Potential homebuyers are quite sensitive to these rate changes, as affordability is strained with both higher rates and higher home values in this supply-constrained market,” said Mike Fratantoni, the MBA’s chief economist in a press release.

Fed cautious against lowering rates too quickly, minutes show

It’s funny how the market always reacts when the minutes from the prior month’s Fed meeting are released – Chairman Jerome Powell is plenty forthright telling the markets exactly what their plan is. Regardless, the market selloff continued on Wednesday after the Federal Reserve meeting minutes showed officials expressed caution about lowering rates too quickly, reported CNBC.

“In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle,” the minutes stated. But, “Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent.

Just as Powell had previously stated, the Fed will remain data-dependent and has no plans to lower interest rates anytime soon.

Nvidia does it again! Record revenue up 265%!

Bears have been swarming (do bears do that?) for weeks now, claiming that Nvidia’s (NVDA) earnings would disappoint and destroy the epic rally in both the stock and potentially the entire market.

Nvidia disappointed… the Bears.

On Wednesday evening, Nvidia posted a record revenue number up 265%, based on its incredibly-booming Artificial Intelligence (AI) business, reported CNBC.

Earnings came in at $5.15 per share versus the $4.64 expected by analysts (however, these are adjusted numbers and may not be like-for-like) and revenue came in at $22.10 billion versus the $20.62 billion expected.

Even the gaming business which includes graphic cards for laptops and desktops was up +56% year-over-year, though it now only accounts for about 10% of Nvidia’s earnings at $2.87 billion.

Can you believe it? This company got its start as a gaming graphic card manufacturer and now that part of the business accounts for only 10%!

Next Week’s Gameplan

Given last week’s dearth of news catalysts, it’s almost a relief to be heading into a week that carries some real “oomph” to it. In addition to consumer confidence on Tuesday, we get the first release of Q4 GDP on Wednesday, which stands to be a real market mover. If GDP surprises to the upside or the downside by any significant amount, the market sentiment will follow suit.

As if all that wasn’t enough, on Thursday we get the Personal Consumption Expenditures (PCE) index. The PCE is the Federal Reserve’s preferred gauge of inflation, and if it shows that inflation has reared its ugly head once more as the CPI and PPI did last week, Thursday could be very interesting, too.

Whew! So, make sure you get plenty of rest because next week’s going to be hopping no matter which way the markets decide to go.

And, as always, I’ll see you back here on 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’s about to make a move… but which way?

Bitcoin was able to tweak a slightly new yearly high last week, breaking just above $52,890.00 before finding resistance at $53,000.00 even. Additionally, the Bulls refuse to let the crypto break down, either, with significant buying support giving Bitcoin a weekly low of $50,628.60 and putting it in an incredibly tight consolidation pattern.

The Bullish Case

Bulls point to the consistent buying as a sign of significant strength, and they’re right. Additionally, there’s a distinct lack of retail involvement in the space. Bulls argue that if retail gets the frenzy as it has at this point in similar cycles in the past, Bitcoin will likely break out from here and achieve a new all-time high above $69K in no time.

The Bearish Case

Bears try to suggest that Bitcoin’s inability to break out above $53K with any real confidence indicates that the buying is becoming exhausted. These Bears predict that Bitcoin will break down again, likely not finding support until the $42K mark. However, the Bears have been very wrong for months now, so it’s hard to take their suggestions very seriously until and unless we see a true breakdown.

Bitcoin Trade Update

Current Allocation: 2.933% (+0.60% since Last Update)
Current Per-Coin Price: $52,501.02 (-0.57% since Last Update)
Current Profit/Loss Status: -2.57% (-1.74% since Last Update)

I made 15 buys over the past week ending with an average buying price of $51,369.86 (after fees). The buys lowered my per-coin cost -0.57% from $52,799.98 down to $52,501.02 and increased my allocation +0.60% from 2.333% to 2.933%.

From here, I’m going to make one more buy above $50K and then wait to see where the price consolidation takes us. Bitcoin’s definitely at a key turning point here, and I believe we’ll see a breakout or breakdown some time in the next week.

While I am leaning bullish, I’m comfortable with my current allocation and have no problem resetting my trade again in the event of the high-quality problem of a continued bull rally from here. If we break down, I want to make sure I keep enough dry powder on the sidelines to add in force at lower levels.

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% @ $50,108
0.054% @ $48,914
0.054% @ $47,886
0.054% @ $46,706
0.054% @ $46,037
0.054% @ $45,616
0.054% @ $44,519
0.054% @ $43,511
0.081% @ $42,711
0.239% @ $42,028

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 my Gemini referral link to open an account.

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 January 2024, Bitcoin rallied +97% to a high of $49,102.29.
• Later in January, Bitcoin dropped -22% to a low of $38,501.00.
• In February 2024, Bitcoin rallied +38% to a high of $53,000.00.

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.