Summing Up The Week

In my 26 years investing in the stock market, I’ve seen some absolutely crazy things from the dot-com crash to the near destruction of global financial markets during the Great Financial Crisis. However, as horrible as the negative catalysts can be, what truly amazes me is when there’s incredibly bad news that the stock market ignores entirely.

Case in point: Russia has threatened to use nuclear bombs on the United States after President Biden authorized Ukraine to use American-made missiles in attacks on Russian targets. This is obviously NOT good news. Did the market sell off? Maybe for five minutes before investors started buying the dip and stocks rallied the rest of the week.

See what I mean? Crazy!

As investors, it’s critical for us to separate our emotions from our investing. Just because the market sometimes rallies on bad news doesn’t make investing evil. The stock market is a discounting mechanism – it looks past the crisis at hand to see the outcome after the smoke’s cleared.

Accordingly, it’s important not to make a move based on good or bad news. Instead, stick to your investing discipline and remember the key adage: time in the market beats timing the market.

Let’s take a look at the news that moved stocks (or didn’t) this week… 

Market News

Putin raises concerns of nuclear weapons in the field

On Tuesday, Russian President Vladimir Putin amended Russia’s nuclear doctrine to deploy its nuclear arsenal more easily, reported CNBC. Putin made the move after President Joseph Biden authorized Ukraine to use American-made missiles in its attacks on Russian soil. Initially, the markets opened the day down slightly but quickly shrugged off what should have been negative news.

Kremlin spokesperson Dmitry Peskov said the updated code now “states that the Russian Federation reserves the right to use nuclear weapons in the event of aggression with the use of conventional weapons against it or the Republic of Belarus, which creates a critical threat to sovereignty or territorial integrity. Aggression against the Russian Federation by any non-nuclear state with the participation or support of a nuclear state is considered a joint attack,” according to NBC News reporting.

Target gives disastrous earnings, stock plunges 20%

There aren’t many companies that I report directly on when the release earnings, but Target (TGT) posted its biggest earnings miss in two years and cut its forecast on Wednesday, causing the stock to plummet 20%, reported CNBC. The reason Target is important is because it provides valuable insights into the American consumer. Unlike its competitor, Wal-Mart (WMT), which generates significant revenue from grocery, Target’s product makeup is distinctly more consumer discretionary; items consumers buy when they have extra money.

On a call with reporters, CEO Brian Cornell said “lingering softness in discretionary categories” and costs associated with rushing shipments and preparing for the short-lived port strike in October hurt the company’s quarterly performance. 

Chief Operating Officer Michael Fiddelke said, “it’s disappointing that a deceleration in discretionary demand combined with some cost pressures have caused us to take our guidance back down after raising it last quarter.” But he added that Target feels confident in its long-term outlook. 

Target’s management has been noticing a pickier consumer. “Consumers have become increasingly resourceful and strategic on how they shop,” said Chief Commercial Officer Rick Gomez. “They know deals are out there. They’re willing to search for them, and they’ll wait for the exact right moment to head into our stores or log on to our app.”

Nvidia blows away earnings… but not good enough.

On Wednesday, Nvidia (NVDA) gave yet another stellar quarterly report that was better than expected, however mild concerns over supply constraints caused investors to sell down the stock on Thursday, reported CNBC.

I must admit, I was surprised to see the mediocre price action as the options market had been pricing in a 9% move in either direction yet Nvidia ended up pulling back  only about 2%.

Additionally, CEO Jensen Huang continues to be incredibly bullish as he said Nvidia is selling even more of its next-generation Blackwell chips than it had originally thought. “Blackwell production is in full steam,” Huang said. “We will deliver this quarter more Blackwells than we had previously estimated.”

As a result of Nvidia not overdelivering as much as the markets would have liked, Thursday’s trading was relatively muted with the S&P rising a bit while the Nasdaq pulled back slightly.

Next Week’s Gameplan

With Nvidia’s earnings behind us, next week brings shortened holiday week due to the American Thanksgiving holiday on Thursday. However, we still have economic news catalysts in the form of consumer confidence and new home sales on Tuesday.

On Wednesday, we get durable-goods orders, GDP Q3, and the Personal Consumption Expenditures (PCE) index (the Federal Reserve’s preferred gauge of inflation). Rest assured, any of these could move the markets if they come in different from expected, so, as always, I’ll have my buying and selling plans prepared in advance.

Even though many will be taking Black Friday off, I won’t be, so I’ll see you back here to wrap up the week Friday afternoon, friends!

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Crytpo Corner

Bitcoin Price Action

Bitcoin Heads to Infinity and Beyond!

Bitcoin Bull Markets are truly a sight to see. This is my third market cycle investing in Bitcoin and I’ll never get used to seeing the parabolic moves that last for days or even weeks at a time. Bitcoin seems impenetrable during a bull cycle as it destroys previous all-time highs and offers no buying opportunity.

The Bullish Case

Bulls remain in full control and likely will for some time. While it can be common for Bitcoin to pull back anywhere from -20% to -40% even during a Bull Market Cycle, predicting when such moves might happen is tricky, at best. Additionally, some Bulls have pointed out since the inception of the Bitcoin ETFs, the pullbacks haven’t been nearly as volatile as prior to their creation. Bulls are predicting highs anywhere from $180,000 to $1,000,000 in this cycle so hang on tight!

The Bearish Case

The Bears continue to cry about Bitcoin’s parabolic move, arguing with each new all-time high that Bitcoin’s about to be cut in half. Instead, Bitcoin roars through the previous all-time high, ripping the face off of any Bear dumb enough to try and short it. While I am always hoping for a substantial pullback to add to positions, I’m certainly not counting on it at this point.

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.
• In November, Bitcoin rallied +103% to a new all-time high of $99,543.00.

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.