Summing Up The Week

The markets finally seemed to realize that the presidential election is coming up in a matter of days which brought volatility into stocks over the past week. Rising 10-year treasury yields gave the S&P 500 and Nasdaq three days of relentless selling before, finally, a surprise blowout quarter from Tesla (TSLA) sent stocks bouncing on Thursday.

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

Market News

Rising 10-Year Yield Pauses Rally

Throughout the start of the week the rise of the yield on the 10-year Treasury caused traders and investors to pull back from stocks, reported CNBC. The 10-year rose to 4.2%, a level not seen since last July, and the 2-year rose to 4.05%, a level not seen in nearly two weeks. Pundits point to robust economic data and deficit worries as the factors behind the rise in the 10-year yield even following the Federal Reserve’s 50-basis-point cut in September.

The reason strong economic data causes a rise in yields is that a strong economy often leads to inflation. Combine inflationary pressures with increased government spending, and the U.S. Treasury will have to raise rates on its bond issuance to attract buyers.

Housing Sales drop to slowest pace since October 2010

On Wednesday, sales of existing homes fell 1% in September compared with August to an annualized rate of 3.84 million, the slowest pace since October 2010, according to the National Association of Realtors (NAR), reported CNBC.

“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing,” said NAR’s Chief Economist Lawrence Yun. 

“More inventory is certainly good news for home buyers as it gives consumers more properties to view before making a decision,” Yun went on. “However, the inventory of distressed properties is minimal because the mortgage delinquency rate remains very low. Distressed property sales accounted for only 2% of all transactions in September.”

Listed homes now stay on the market an average of 28 days versus 21 days from a year ago as first-time buyers pull back, making up only 26% of September’s sales and matching the all-time low from August.

Tesla rockets 22% in best day in more than 10 years

After reporting a surprise blowout quarter on Wednesday evening, Tesla’s (TSLA) share price rallied an amazing 22% on Thursday, capping off the stock’s best performance since 2013, reported CNBC. Driven by surprising revenue generation and outstanding forward guidance provided by CEO Elon Musk, the stock reignited the bulls in the Nasdaq which had experienced three straight days of selling prior to Tesla’s report.

“We expect this surprising earnings beat to power a strong positive reaction in Tesla shares Thursday, given the degree to which investors have become conditioned to earnings misses from the company,” analysts at JPMorgan wrote in a note.

Next Week’s Gameplan

Next week, it’s time for earnings from tech’s big guns with Alphabet (GOOGL) reporting Tuesday; Meta (META) and Microsoft (MSFT) reporting Wednesday; and Apple (AAPL) and Amazon (AMZN) reporting Thursday. Sprinkle earnings from AMD (AMD), Coinbase (COIN), Intel (INTC), and even Twilio (TWLO in there and it’s a big week simply from an earnings standpoint.

However, we’ve got more than earnings, too, with the consumer confidence survey for October coming out on Tuesday, ADP employment and Q3 GDP Wednesday, Personal Consumption Expenditure (PCE) on Thursday, and, finally, the nonfarm payrolls report for October on Friday.

Not to mention, next week marks the end of October, plus the presidential election will be less than a week away by next Friday!

Next week will be pivotal and almost guarantees an increase in volatility either to the upside, the downside, or both, so get your buying and selling plans ready and hang on to your hats – it’s gonna be wild!

I’ll see you here next Friday for the debriefing, friends!

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Crytpo Corner

Bitcoin Price Action

Bitcoin Bulls wrestle the Bears once more!

Bitcoin continued to follow through with bullish momentum after last week’s update, setting a new weekly high at $69,498.00 on Monday before pulling back. Bitcoin maintained a higher weekly low at $65,149.51 on Wednesday before returning to its rally Thursday.

The Bullish Case

Despite the sudden dip below $60,000 a few weeks ago setting a new weekly low, Bulls have completely regained the narrative with a series of higher-lows and higher-highs on the Daily, Weekly and, most importantly, Monthly timeframes. Naturally, a few are getting a bit too enthusiastic with predictions of $100,000 before 2024, but who am I to complain? If Bitcoin ends up getting that high, it’d be fine by me.

The Bearish Case

As early as Monday, Bears started to claim that Bitcoin’s breakout from last week was simply a “perp-driven rally… not conducive to a sustainable breakout” and that Bitcoin has now entered a “potential rising wide with bearish divergence everywhere.”

One Bear even claims Bitcoin’s price could crash to $35,720 (lower than where it was trading after pulling back to $38,500 following the launch of the ETFs in January) based on “muted buying volume” attributed to a “lack of momentum from muted whale activities.”

Accordingly, Bears are expecting a retest of October’s starting price around $63K, a selloff I would welcome and buy with both hands since I have reset my trade once more (as you’ll read below).

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.