Summing Up The Week

Just like September before it, October seems to be defying seasonality as stocks continued to rally this week. This week, the U.S. consumer remains resilient, earnings (particularly from banks) continue to come in strong, and news about nuclear energy has sent the uranium trade into the stratosphere!

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

Market News

Amazon to go nuclear – Uranium explodes!

While not entirely market-moving, the entire nuclear energy and uranium sector rallied significantly on Wednesday after news broke that Amazon is investing more than $500 million in small nuclear reactors, reported CNBC. The nuclear energy sector has been consolidating for a little more than a year after rallying huge off its 2020 lows, however nuclear has been picking up heat once again as AI powerhouses have been making plays to invest in nuclear energy.

First, Microsoft (MSFT) announced plans to reopen the one remaining working reactor at Three Mile Island followed by Alphabet (GOOGL) announcing  it would be investing nuclear energy solutions for its AI data centers. It should have come as no surprise when Amazon announced on Wednesday that its Amazon Web Services (AWS) division had signed an agreement with Dominion Energy (D) in Virginia to explore the development of small modular nuclear reactors (SMRs).

I’ve been heavily invested in uranium and nuclear energy plays since early 2021 and continue to add to positions as well as open new ones. Currently, my top four holdings in the space are the Global X Uranium ETF (URA), the Sprott Junior Uranium Miners ETF (URNJ), Cameco (CCJ), and the Sprott Uranium Trust (SRUUF).

ECB cuts interest rate to 3.25%, 3rd cut this year

On Thursday, the European Central Bank cut its key interest rate to 3.25% in its third 0.25% reduction of the year, reported CNBC. Europe, Canada, and much of the world reported much lower-than-expected Consumer Price Index (CPI) figures this week, indicating that disinflation is well in-hand for much of the global economy.

“The inflation outlook is also affected by recent downside surprises in indicators of economic activity,” said ECB’s Governing Council which also pointed out that disinflation is “well on track” in a statement.

Retail Spending stronger than expected

The U.S. consumer continues to remain surprisingly resilient as Thursday’s retail sales numbers came in at 0.4% for September, up from 0.1% in August and better than the Dow Jones estimate of 0.3%, reported CNBC. With inflation remaining relatively flat, the labor market cooling but not crashing, and the consumer remaining strong, the soft-landing thesis is very much intact.

While the news has left some wondering if the Federal Reserve will cut or stay pat at they’re next meeting, these reports show the Fed doesn’t need to cut unless they want to.  In addition, jobless claims came in 19,000 lower than expected this week despite expectations for increased claims as a result of hurricanes Helene and Milton.

Next Week’s Gameplan

In addition to heading further into the thick of earnings season, next week will bring us some Fedspeak, some more information on the housing market on Wednesday with existing home sales, the flash services and manufacturing PMIs on Thursday, and consumer sentiment with durable goods orders on Friday. 

All in all, next week promises to be a busy one. The Bears are still pointing out that October is a seasonally volatile time for the markets, particularly when heading into the Presidential election, however the market seems to have snubbed its nose at any kind of seasonality this year with both September and even October being quite good on the whole (so far).

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

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Crytpo Corner

Bitcoin Price Action

Bitcoin plays the Uno Reversal Card!

Bitcoin finally got off its duff and played the “Uno Reversal Card” on the Bears. For those not familiar with the game, playing the reverse card in Uno changes the play from clockwise to counter-clockwise or vice versa.

In this case, just when the Bears thought they had the upper-hand when Bitcoin careened to a new low at $58,863.90, the Big Orange Crypto once again flipped the deck and rallied higher, breaking through resistance at $64,467.02 and $66,550.00 before setting a new weekly high just under a key resistance point at $68,399.00 on Wednesday. The new weekly low (a HIGHER weekly-low) was set at $62,033.00 on Sunday.

The Bullish Case

Bulls have a lot to get excited about after the past week’s price action. After weeks of setting lower-highs and lower-lows on the Weekly timeframe, the outlook wasn’t too hot for anyone Bullish on Bitcoin. However, as I’m fond of saying, “Bitcoin’s favorite pastime is making fools of Bulls and Bears.”

In this case, it was the Bears’ turn as Bitcoin rallied to new highs not seen since late-July/early-August. Bulls are back on the bandwagon, calling for Bitcoin to hit new all-time highs in the coming days, weeks, and months.

The Bearish Case

Bears have returned to the penalty box after many got incredibly excited when Bitcoin broke below $59K last week only to have hopes for a lower crash dashed when Bitcoin rallied to new highs on the Weekly and Monthly timeframes. While some stubborn Bears claim this is a false breakout, it’s hard to argue with the technicals which currently favor a reversal of trend.

Bitcoin Trade Update

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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.