Summing Up The Week

While many think the tried-and-true stock market adage is “Sell in May and Go Away” due to professional traders going on vacation for the summer, the original quote was actually “Buy in May and Make Some Hay.” While the original quote referenced a seasonal agricultural cycle that resulted in profits through July and August, recent historical price action reinforces the latter quote as being more accurate, not the former.

Over recent years, the market has actually rallied from May to June and July to August, with the biggest concerns for a market selloff actually running from the end of August to the end of October when many hedge funds, institutional investors, and family offices rebalance their holdings going into the end of the year.

This week’s price action was sluggish, however, likely due to heading into the end of May which had been an excellent month in terms of overall performance, despite its lackluster end of the month.

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

Market News

Consumer Confidence rebounds in May after 3 months of decline

On Tuesday, the U.S. index of consumer confidence survey came in at 102 in May, up from a revised 97.5 in April, and the first increase in the survey after three months of declines, reported MarketWatch. The consumer confidence survey tends to focus on how consumers feel about inflation and how they feel about the economy over the next six months, so a positive increase in confidence is good news.

However, despite the positive growth data in the index, a Harris poll performed recently showed that 56% of Americans believe the United States is in a recession (which it definitively is not). “This is a puzzle for polling experts,” wrote MarketWatch. “Economists tend to think that Americans are still grappling with the higher level of prices left behind after the wave of inflation.”

Despite a relatively positive report, the broad market indexes sold off on Tuesday except for the Nasdaq which was lifted higher by continued strength in Nvidia (NVDA), which once again rallied to new all-time highs and even surpassed Apple (AAPL) in market cap for the first time.

GDP grew 1.3% in 2024-Q1, meets expectations

On Thursday, reports showed the U.S. Gross Domestic Product (GDP) grew 1.3% in the first quarter of 2024, as expected by Dow Jones economists, reported MarketWatch. While the report was in-line with expectations, this is not good news, as a robust economy requires a minimum growth rate of 2.00%. This report shows the U.S. economy is slowing.

The culprit appears to be consumer spending, the main driver of the U.S. economy, which only grew at 2.00% where household spending had increased at a rate of 3%+ in the previous two quarters.

Some pundits are optimistic for the second quarter according to MarketWatch, “GDP could show a nice bounce back in the second quarter, however,” their release stated. “The latest forecasts indicate the economy may have grown at a 3%-plus pace, similar to the last two quarterly readings of 2023.”

Despite optimistic poteential for the future, the market, which was already weak prior to Thursday’s opening, did not recover on the release of the GDP.

PCE rose 0.2% in April, as expected

On Friday, the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred gauge of inflation, showed a rise of 0.2% in April, in line with Dow Jones economists’ expectations, reported CNBC. As a result, annual PCE was up 2.8%, 0.1% higher than what had been previously estimated. Some pundits pointed to how inflation appears to remain persistent, something the Federal Reserve would likely prefer not to see. “The core index came in at 2.8%. That’s fine, but it’s been trading in a range for five months now, and that’s pretty sticky to me,” said Dan North, senior economist for North America at Allianz Trade. “If I’m [Fed Chair Jerome] Powell, I’d like to see that start moving down, and it’s barely creeping. … I’m not reaching for the Pepto yet, but I’m not feeling great. This is not what you want to see.”

Next Week’s Gameplan

Next week brings a slew of potential economic catalysts in the form of ISM manufacturing on Monday, ISM services on Wednesday, and both consumer credit and the nonfarm payroll jobs report on Friday. That provides a lot of fodder to move the markets one way or another.

Now that we’ve exited earnings season completely, the markets will return their focus to news catalysts and the fluctuating interest rates. The combination of these two will determine which way the animal spirits take stocks from here.

As always, make a plan for both directions and I’ll see you all back here next week, friends!

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Crytpo Corner

Bitcoin's Road to Nowhere - Get Irked
Click chart for enlarged version

Bitcoin Price (in USD)


Weekly Change

Bitcoin Price Action

No news is not good news or bad news for Bitcoin

With no significant news catalysts over the past week, Bitcoin kind of meandered around. The world’s largest crypto didn’t make a higher-high on the weekly timeframe, finding resistance at $70,613.39 when it rallied on Monday. However, the good news is that Bitcoin did make a higher weekly-low, finding support at $66,584.47 when it pulled back on Friday.

Overall, I’d argue that Bitcoin maintains bullish price action as the weekly higher-low shows the buyers are still very aggressive. From here, it must break through $70,613.39 on the upside to create higher-highs at which point the next point of resistance is $71,980.00. On the downside, if Bitcoin can’t hold its new low, the next point of support is quite close at $66,259.00 followed by $64,588.50.

The Bullish Case

Bulls argue that the approval of the Ethereum ETFs last week is bullish for the entire space, suggesting Bitcoin could rally ahead of the launch of the ETFs which isn’t expected until July or August, at the earliest. Bulls are predicting highs of $80K by the end of June with some of the more enthusiastic ones estimating six-figures for the summer.

The Bearish Case

Bears argue that the upside seen from the Ethereum ETF approval last week wasn’t good enough, and that the lack of true upside momentum with no new all-time highs for Bitcoin indicates the buyers are weakening. Further, the Bears argue that since institutional buying is going on right now, the lack of upside momentum even with significant buying means lower-lows are in store in the coming weeks.

Bitcoin Trade Update

Premium subscribers to Get Irked get access to all the moves I’ve made in my Bitcoin trade over the past week as well as my next thirty (30) … yes, 30 … buys in Bitcoin including price levels, quantities, and a full layout of my ongoing long-term trade in the world’s biggest crypto.

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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?

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.

Suicide Hotline – You Are Not Alone

Studies show that economic recessions cause an increase in suicide, especially when combined with thoughts of loneliness and anxiety. If you or someone you know are having thoughts of suicide or self-harm, please contact the National Suicide Prevention Lifeline by visiting or calling 1-800-273-TALK. The hotline is open 24 hours a day, 7 days a week.