Summing Up The Week

Dueling inflation reports kept investors on their toes this week. Initially, Tuesday’s report looked unpleasant until pundits pointed out the revisions of past months might indicate a reversal in rising inflation. Wednesday cinched the the deal when the CPI came in cooler than anyone expected.

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

Market News

Wholesale prices rose 0.5% in April, more than 0.2% expected

On Tuesday, the Producer Price Index (PPI), the gauge which measures wholesale prices producers pay, showed a rise of 0.5% in April, much more than the 0.2% Dow Jones estimate, reported CNBC. Even after stripping out food and energy prices which often contribute significantly to the figure, the core PPI still rose 0.5% versus the 0.2% expected by economists. 

The only saving grace to the report was that March’s report was revised lower, leaving some analysts to posit the current report may not be as bad as it initially looked. “Sticky inflation looked downright stuck this morning after a much hotter-than-expected inflation reading. But with last month’s numbers revised lower, this report may not have been as much of an upside shock as it first appeared to be,” said Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley.

That being said, we’re now in a rising trend for inflation, and that’s not good news. While the markets did not initially sell off on the news, they did not rally, either, remaining flat in morning trading as investors awaited the big report, the Consumer Price Index (CPI), which would be released Wednesday.

CPI comes in at 0.3%, slightly cooler than expected

On Wednesday, the Consumer Price Index (CPI) showed inflation increased 0.3% in April, slightly lower than the 0.4% expected by economists, and year-over-year inflation came in at 3.4% as expected, reported CNBC. Apparently, the market had priced in a hotter number because stocks and Bitcoin both rallied substantially on the back of the report, even though a 0.1% differential is relatively insignificant.

Even economists gave a muted response to the better-than-expected print. “This is the first print in a month that wasn’t hotter than expected, so there’s a relief rally,” said Dan North, senior economist at Allianz Trade North America. “The excitement is a little overdone. This is not Caitlin Clark. She’s exciting, this is not exciting.”

However, the market remains willing to rally on any good news catalyst (and a surprising number of bad news catalysts, too), so, for the moment, risk assets want to go higher.

Next Week’s Gameplan

This week’s inflation data was decidedly positive for stocks and the markets as a whole. In fact, barring an unforeseen geopolitical event, it’s hard to argue the Bulls argument that stocks can head much higher than year, particularly since presidential election years see very positive returns by year-end.

That being said, there are still a few key earnings reports for some of my positions, not the least of which being the mamma-jamma market-mover that is Nvidia (NVDA), still my largest position by a wide margin, and it reports after the bell on Wednesday.

Also on Wednesday, we’ll see the minutes of the Federal Reserve’s May meeting, however I don’t expect to hear much than we haven’t heard from the nonstop fedspeak over the past few weeks. Outside of those minutes, there are no real significant economic catalysts, so Wednesday will be clutch with Nvidia’s report which will almost decidedly be the market catalyst one way or the other.

Personally, I have no idea what to expect from Nvidia, but I will be trimming on my profits if it rallies into the print as one small disappointment could send everything collapsing like a house of cards. Get those buying plans ready!

In the meantime, I’ll see you right back here next Friday, friends!

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THANK YOU FOR YOUR ONGOING SUPPORT!

Crytpo Corner

Bitcoin Price Action

Cooler Inflation Saves Bitcoin’s Bacon!

Bitcoin continued to pull back last Friday after Crypto Corner went to press, not finding a weekly low until $60,150.00, leaving a last line of support at $59,573.32 before the air gap down to $56,500. However, the Bulls finally caught a break on Wednesday, when a cooler-than-expected Consumer Price Index (CPI) showed weaker inflation than economists had been expecting.

Bitcoin rallied incredibly strong. On Thursday, . During its rally, Bitcoin saw a healthy pullback to set a new higher weekly low at $64,588.50 on Thursday. Then, on Friday, it broke through the last weekly weekly high at $65,523.44 followed by cracking through a previous key point of resistance at $67,272.73, making a new weekly high at $67,500.

These higher-highs and higher-lows are incredibly constructive, but Bitcoin still has a lot of work to do before the price action is technically outright bullish with the next point of resistance it must break through at 69,324.58.

If Bitcoin rolls over, hopefully the new weekly low at $64,588.50 holds, but if it doesn’t, last week’s low of $60,150.00 must hold or Bitcoin may fall into the air gap under $60,000 once more.

The Bullish Case

Bulls believe that the decisive bottom made over the last week will hold, with many back to predicting new all-time highs within the next few weeks. I’m reassured by the constructive build from this week’s rally, but, as I said, there’s still much to do before this becomes a bullish trend. 

The Bearish Case

Bears point to the charts and argue that, while this week’s price action was indeed constructive, Bitcoin has made a lower monthly-high to May, a decidedly bearish action on a much more powerful longer timeframe. Some Bears have gone so far as to argue this week’s move was simply an “oversold dead cat bounce,” with some still holding to their thesis that Bitcoin’s headed much lower than $56,500.00.

Bitcoin Trade Update

Current Allocation: 2.267% (+4.61% since Last Update)
Current Per-Coin Price: $62,944.78 (-2.97% since Last Update)
Current Profit/Loss Status: +6.67% (+11.45% since Last Update)

Over the past week, I have made four (4) buys at an average buy price of $61,744.78 (after fees). The buys lowered my per-coin cost -2.33% from $64,873.28 to $63,359.36, and increased my allocation +30.73% from 2.167% to 2.833%.

When Bitcoin rallied on the cooler-than-expected CPI report on Wednesday, it flew above my new cost basis, triggering 17 sales at an average sale price of $65,073.76 (after fees). The sales lowered my per-coin cost -0.65% from $63,359.36 to $62,944.78 and reduced my allocation -19.98% from 2.833% to 2.267%.

Stay frosty, my friends. 😀👍

Bitcoin Buying Targets

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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 March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
• In May, Bitcoin dropped -23% to a low of $56,500.00.

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.