Summing Up The Week

The markets continue to look for any metric that might indicate the Federal Reserve could begin cutting interest rates soon which means we’re still very much in the “bad news is good news” approach to catalysts.

Monday’s stagnant manufacturing index followed by Tuesday’s decreasing job openings report both lent a great deal of credence to the rate cut thesis, causing the markets to rally significantly on Wednesday.

Then, on Friday, even the mixed nonfarm payrolls report for May didn’t seem to discourage the bulls with the S&P 500 bouncing back quickly after the markets digested the news.

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

Market News

“Manufacturing appears to have stalled…”

On Monday, the Institute for Supply Management’s (ISM) manufacturing index showed a drop to 48.7% in May versus 49.2% in April, reported MarketWatch. Any figure below 50% is a signal the manufacturing sector is contracting, and a month-over-month downward trend is a sign of even more weakness.

An ISM spokesperson offered no optimistic view on the release, “The manufacturing side of the economy appears to have stalled,” said Timothy Fiore, ISM’s Chairman. “Companies are extremely cautious with any form of investment.”

Job openings drop to pre-pandemic levels, 8.06m vs 8.35m exp

On Tuesday, the Job Openings Labor Turnover Survey (JOLTS) showed that job openings fell to 8.06 million in May versus the 8.35 million expected by economists, reported MarketWatch. Additionally, job openings per worker have returned to pre-pandemic levels.

Some pundits argue that this new data gives the Federal Reserve a lot to consider with Elizabeth Young, Lead Invesment Manager for SoFi (SOFI) commented on X (formerly Twitter), “A lot of data pointing to a cooling labor market here for the Fed to chew on.”

272K new jobs in May but unemployment hits 4%

On Friday, the nonfarm payroll report showed the U.S. economy added 272,000 jobs in May versus the 190,000 expected, but the unemployment rose to 4%, the first time seeing that point since January 2022, reported CNBC. Initially, stocks sold off on the mixed report before bouncing back later in the day.

“On the surface, [the report] was hot, but you’ve also got a bigger drop in household employment,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “For what it’s worth, that tends to be a more accurate signal when you’re at an inflection point in the economy. You can find weakness in the underlying numbers.”

The mixed report left many pundits wondering what effect, if any, the nonfarm payrolls would have on the Federal Reserve’s outlook during next week’s FOMC meeting.

Next Week’s Gameplan

Next week is a big week with an absolute metric ton of potential market-moving news catalysts. On Wednesday, we get the Consumer Price Index (CPI) for May followed by the Federal Reserve’s interest-rate decision and Chair Jerome Powell’s press conference. While the market expects absolutely no movement in rates (neither a hike nor a cut), you better believe Powell’s every word will be parsed to determine whether he’s dovish or hawkish on the U.S. economy and the state of inflation.

Wednesday will be where the biggest catalysts happen, however, there’s still plenty that can move markets later in the week, too. On Thursday, we get the Producer Price Index (PPI) for May. After last month’s showing of an increase in inflation, it’s anyone’s guess where this month’s PPI comes in although the consensus seems to be inflation will be flat to down from last month.

On Friday, we get the University of Michigan’s Consumer Sentiment Survey results, and while I don’t personally expect to see much in the way of market-moving news, anything’s possible.

So, it’ll be an exciting week! As always, make sure to have a plan for both directions on all of your positions – what will you do if the markets head higher next week and what will you do if the markets head lower?

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

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THANK YOU FOR YOUR ONGOING SUPPORT!

Crytpo Corner

Bitcoin Price Action

Bitcoin ALWAYS Does What’s Least Expected!

Bitcoin was looking pretty good until the bottom fell out suddenly mid-day on Friday. Initially, it had maintained last week’s higher weekly low at $66,584.47 and used it as a springboard to rally back above $70,000 again, breaking through the weekly resistance at $70,613.39 to make a new higher weekly high just under the next point of resistance at $71,974.04 on Friday with the next point of resistance a couple dollars higher at $71,980.00.

But, all of a sudden, Bitcoin collapsed and didn’t find support until $68,298.55. While that is a higher low than last week, the sudden drop baffled a lot of traders, and it’s quite possible we could see further downside follow-through over the weekend.

The Bullish Case

Bulls have reached a consensus that a breakthrough to new all-time highs is imminent, with many predicting Bitcoin to hit $84K-$86K before the end of June. The news is so widespread that a headline on the front-page of CNBC suggested that Pro subscribers could see when and where this breakout would occur. Bulls point to the upcoming news of when the Ethereum ETFs will launch as the catalyst that will bring Bitcoin more upside.

The Bearish Case

Bears have started throwing in the towel, with many long-term Bears capitulating and flipping bullish. This capitulation in itself is not a good sign, in my opinion. When the longest-term Bears believe Bitcoin is done headed lower, there are no Bears left to flip bullish… who will do the buying? I have no real fundamental or even technical reason to believe Bitcoin will sell off, however I’ve found that, in the past, whenever everyone seems to agree that Bitcoin will move a particular direction, it typically moves the opposite to what everyone expects… and it usually does so with earnest.

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?

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.