Summing Up The Week

Despite Tuesday’s consumer confidence survey falling the most in three years, stocks shrugged off the news and rallied. In fact, the S&P 500 made new intraday all-time highs nearly every single day regardless of whether stocks finished higher or lower. 

Volatility remains the name of the game, however, as each day saw stocks turn from green to red several times as investors seem to be getting jittery about the seemingly never-ending rally. Thursday’s economic data came in positive which caused yet another decent pop for all three of the major indexes.

On Friday, the Personal Consumption Expenditures (PCE) index was released and capped off a fantastic week, showing inflation coming in even lower than economists expected!

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

Market News

Consumer confidence falls the most in 3 years

On Tuesday, the consumer confidence index for September fell to 98.7, down from 105.6 in August, the biggest single-month decline in more than three years, reported CNBC. Consumers view the rise of unemployment as a sign that the economy could be weakening.

“Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income,” said Dana Peterson, Chief Economist at The Conference Board, the organization that performs the survey for the index.

Economic data indicates labor market and economy remain strong

On Thursday, initial jobless claims came in lower than expected at 218,000; August durable goods orders came in better than expected; and U.S. GDP rose 3% in Q2, in-line with market expectations, reported CNBC.

The jobless claims, in particular, were a high point for the day. “If there’s a problem in the labor market, it’s not showing up in the weekly jobless claims data. As is always the case, though, the monthly jobs report will play a bigger role in defining market sentiment,” said Chris Larkin, Managing Director of Trading and Investing for E-Trade from Morgan Stanley. “But until there’s evidence to the contrary, numbers like this will likely keep soft-landing hopes alive and well.”

August PCE drops to 2.2%, lower than expected

On Friday, the markets received the all-important Personal Consumption Expenditures (PCE) index which showed a drop to 2.2% in August versus 2.3% expected by economists, reported CNBC. The PCE remains the Federal Reserve’s preferred gauge of inflation so this lower-than-expected number helps validate the Fed’s decision to go with a jumbo 0.50% rate cut last week compared to the historically typical 0.25%.

Economists were pleased with the PCE’s reflection of inflation in the U.S. economy. “All quiet on the inflation front,” said Chris Larkin, Managing Director of Trading and Investing at E-Trade from Morgan Stanley. “Add today’s PCE Price Index to the list of economic data landing in a sweet spot. Inflation continues to keep its head down, and while economic growth may be slowing, there’s no indication it’s falling off a cliff.”

Next Week’s Gameplan

So far, September has shocked the Bears by being one of the strongest Septembers in history, and with only one trading day left in the month, it’s hard to see any reason stocks will do anything but close green for the month.

With PCE out of the way, next week sees the market turn back to looking at the strength of jobs in the United States with the U.S. employment report for September coming out next Friday. We’ll also see other data points in the form of manufacturing PMI and ISM on Tuesday, services PMI and ISM on Thursday, and even some Fedspeak sprinkled throughout the week.

So, of course, next week is backloaded to Friday… again. And, as always, I’ll see you back here next Friday afternoon to review the moves of the week, friends!

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Crytpo Corner

Bitcoin Price Action

Bitcoin Blows Away the Bears!

Bitcoin maintained its bullish price momentum from last week, breaking through the resistance it found at $64,140.67 last Friday and not stopping until it hit $66,000.00 on Friday. Additionally, Bitcoin made a much higher weekly-low, finding support at $62,380.55 last Sunday. 

On the upside, the next key levels of resistance start coming in around the $68,000 mark with a pivotal one at $68,495.00. After that, we’re looking to the round number resistance at $70,000, just under $72K, and so on.

On the downside, we’ve got several areas of key support if our weekly low doesn’t hold starting with the psychological support at $60,000 followed by $57,477.00; $55,534.41; $52,530.00; $50,000; and $49,050.01.

The Bullish Case

The Bulls have maintained the narrative for two weeks in a row with the series of higher-highs and higher-lows on the Daily timeframe looking incredibly strong. Even the longer timeframes are staging turnarounds. A bearish-to-bullish reversal can be clearly identified on the Weekly timeframe and even the Monthly has made a higher-high and higher-low from August to September.

The Bearish Case

The Bears have now been smacked down for two weeks in a row, yet some are still claiming that this a false breakout and Bitcoin will break below its current cycle lower at $49K. While enterprising Bears can make this argument using the Monthly chart, even the Weekly timeframe has become extremely constructive. A Bearish rollover would require a pretty significant unknown catalyst.

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 August, Bitcoin dropped -33% to a low of $49,050.01.

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.