Summing Up The Week

No matter what the pundits have been saying about the markets pricing in an election win by President-Elect Donald Trump for weeks now, the unbelievable rally in stocks and Bitcoin following Tuesday’s sweep by Trump solidly proves the market did not see a definitive Trump win as the likely outcome.

Stocks exploded to the upside with the indexes making new all-time highs across the board and Bitcoin blowing through its own past all-time high, too.

When the Federal Reserve announced another 0.25% interest rate cut and Fed Chair Jerome Powell said the economy looks healthy, stocks didn’t look back and continued rallying.

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

Market News

Trump wins re-election over Harris

Despite pundits claiming a Donald Trump victory had been priced into the markets, the indexes exploded following Trump winning re-election on Tuesday evening, reported CNBC. The Dow Jones Industrial Average (DJI), S&P 500 (SPX), and Nasdaq (IXIC) each made new all-time highs in Wednesday trading.

Bitcoin (BTCUSD) made a new all-time high, as well, while precious metals like gold and silver as well as U.S. Treasurys all saw steep pullbacks as a result of being considered “safety trades.”

“For now, investor sentiment is pro-growth, pro-deregulation, and pro-markets, as seen in the overnight market action,” David Bahnsen, chief investment officer at The Bahnsen Group. “There is also an assumption that M&A activity will pickup and that more tax cuts are coming or the existing ones will be extended. This creates a strong backdrop for stocks.”

Fed cuts rates 0.25%: “Looking Good. Feeling Good.” 

On Thursday, the Federal Reserve announced they cut interest rates by another 0.25%, as expected, down to 4.5% to 4.75%, reported CNBC. During his press conference, Chair Jerome Powell said he was “feeling good” about the state of the economy (thus, the obligatory reference to the famous line from the movie “Trading Places” in the headline).

“The federal government’s fiscal path, fiscal policy, is on an unsustainable path,” Powell said. “The level of our debt relative to the economy is not unsuitable, the path is unsustainable. “And we see that in a very large deficit, you’re at full employment [and] that’s expected to continue, so it’s important that be dealt with,” Powell added. “It is ultimately a threat to the economy.”

As a result, the markets continued their epic rally from Wednesday with the S&P 500 finishing the day up an additional +0.74% and the Nasdaq up nearly +1.5%.

Next Week’s Gameplan

Next week brings more earnings, but we also have the release of inflation data including the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday.

Some market participants believe we’ll see a reinflation of inflation in the coming weeks as a result of a variety of factors, so next week’s CPI and PPI will be key in providing a gauge of how the Federal Reserve’s fight against inflation is faring. 

As for my own portfolios, I’ll be looking for earnings from Shopify (SHOP) and Skyworks Solutions (SWKS) on Tuesday along with Brookfield (BN) and Disney (DIS) on Thursday.

While next week likely won’t be as busy as this past week, it promises to bring a lot of action, so I’ll meet you back here next Friday to review, friends!

Check out Get Irked Premium on Substack!

After providing FREE content since 2018, the time constraints of producing Investments in Play, Speculation in Play, the Pandemic Portfolio, and Stock Shopping List have become too much to continue doing for free.

On Substack, you can subscribe for FREE to have the Week in Review and Crypto Corner, now separate newsletters, sent to your email inbox at no cost. The portfolio updates and Stock Shopping List are now part of a premium subscription plan.

I hope you will join me on Substack as I continue on this exciting journey!

THANK YOU FOR YOUR ONGOING SUPPORT!

Crytpo Corner

Bitcoin Price Action

Bitcoin, the Ultimate “Trump Trade?”

Bitcoin rallied more than +15% from its low on Monday to its new all-time high at $76,954.22 on Thursday after Donald Trump surprised many by winning re-election in a sweeping victory Tuesday evening. In June, Trump announced his support of Bitcoin and belief in it as a potential reserve currency for the United States. In fact, rumors have been swirling that his administration may create a Bitcoin Fund for the United States, buying as much as 1,000,000 Bitcoin for it.

As a result, Trump’s win caused the Bitcoin price to skyrocket to new all-time highs and dashing all of the Bears’ hopes that it would crash back down to $40,000 and lower.

The Bullish Case

Bulls were gratified to see Bitcoin’s price action support the Trump Trade thesis this week. Many Bulls are claiming Bitcoin will hit five-figure prices before the end of the year with some suggesting we’ll see Bitcoin at $250,000 some time in 2025. These are all very exciting predictions that I have no way to invalidate; I’ve been watching Bitcoin since 2011 and I’ve seen it do some downright crazy things.

The Bearish Case

Bears are making the argument that Bitcoin has moved too far too fast, and that investors should expect a significant pullback of 20% or more. Since that sort of pullback is actually quite common in Bitcoin Bull Markets, I would relish the opportunity to add back to my trade at much, much lower prices.

However, I will also point out that in Bitcoin’s run in 2020, it never pulled back that much before rallying more than +1,600% from its March 2020 low just below $4,000 to its new all-time high at $69,000. That’s a LOT of profit to miss sitting on the sidelines waiting for a -20% pullback that might never come.

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.

If you aren’t already, subscribe to my Substack today!

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.
• In November, Bitcoin rallied +57% to a new all-time high of $76,954.22.

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.