Summing Up The Week

Even after the sudden scare provided by Federal Reserve Chairman Jerome Powell’s hawkish commentary, the seasonal “Santa Claus Rally” appeared to carry the stock market higher ahead of the holiday as investors and traders added to their positions going into the Christmas even despite less-than-positive economic data released earlier in the week.

However, Santa seemed to leave the building after the market reopened on Boxing Day with a middling Thursday leading into a downright selloff on Friday with the S&P 500 down around 1.5% and the Nasdaq plummeting more than 2%, all on no news.

Some pundits have been saying this negative price action foretells bad news for next year, too, as the seven days following Christmas historically dictate January’s price action: if the stock market finishes the seven trading days following Christmas lower, that results in a lower January, and how January goes is how the rest of the year goes.

Chilling.

With that, let’s take a look at the news that moved markets this week…

Market News

Consumer confidence shaken by worries over stock market

On Monday, the Consumer-Confidence index fell to a three-month low, dragged down by concerns over the stock market and a potential higher cost of living resulting from promised tariffs, reported MarketWatch. The index came in lower at 104.7 for December where economists were expecting a rise to 113. Despite the surprise decline in consumer confidence, stocks shrugged off the news and headed higher.

“Consumers became a bit less bullish about the stock market in December,” said Dana Peterson, chief economist at the board. Nearly 50% of consumers also thought new tariffs threatened by President-elect Donald Trump would raise their cost of living next year.

There was some good news in the survey results, however, as consumers reported they expect to see disinflation (a decrease in the rate that prices rise) continue in 2025.

U.S. manufacturing slump continues

On Tuesday, the durable-goods orders fell once more, the third time in four months, indicating that manufacturing remains in a slump that shows no sign of ending, reported MarketWatch. While a negative catalyst to be certain, the news didn’t surprise anyone and stocks ignored the headline just as they had with the consumer confidence index on Monday, heading higher once more.

The bright spot in the report was that American manufacturers are becoming slightly more optimistic as the expectations for President-Elect Donald Trump’s business-friendly administration start to make their way throughout the economy.

Next Week’s Gameplan

After stocks sold off toward the end of the week, it’s hard to know where next week will take the markets. Typically, whatever momentum carries stocks through the weeks leading up to the end of the year stays consistent, so that might mean we’ll see even more of a pullback next week, too.

Additionally, with another holiday-shortened week (thanks to the New Year’s Day holiday), there won’t be a lot of economic data, either, with the Chicago Business Barometer (PMI) and pending home sales on Monday followed by the S&P Case-Schiller home price index on Tuesday. The new year kicks off with initial jobless claims on Thursday and ISM manufacturing on Friday, but I don’t expect either of those to be market-moving events.

So, we may have another confusing week ahead of us as we head for the end of 2024. Regardless, I’ll see you back here next YEAR, friends! 😉

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Crytpo Corner

Bitcoin's Road to Nowhere - Get Irked
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Bitcoin Price (in USD)

%

Weekly Change

Bitcoin Price Action

Santa didn’t bring anything for Bitcoin this Christmas. 🙁

Bitcoin didn’t see the love that Santa showed the stock market this week, meandering until Thursday when it was able to eek out a small (but negligible, really) higher weekly-high at $99,387.00 before rolling over almost immediately and selling off once more.

On the downside, Bitcoin also made a slightly higher weekly-low (but once again not significant enough to really be consequential) at $92,360.91 on Monday. It seems the battle between the Bulls and the Bears remains tough with neither side able to make progress in determining the next direction for Bitcoin’s price.

The Bullish Case

Bulls continue to point to President Elect Donald Trump’s promise to establish a Strategic Bitcoin Fund and to Michael Saylor’s MicroStrategy’s (MSTR) significant purchases of Bitcoin as catalysts to drive Bitcoin higher. Some Bulls still claim Bitcoin will see $125,000 before the end of 2024, however with less than a week left, I’d be extremely surprised (but pleased, of course) to see that claim come to fruition.

The Bearish Case

Bears make the argument that Bitcoin’s rejection from its all-time high and subsequent weakness at resistance points established in the last few weeks means that Bitcoin will head much lower than here. I truly hope the Bears are right because, as you’ll see in my trade update below, I’ve been using Bitcoin’s weakness to rebuild my allocation and I’d love to have buying opportunities at $92,000 or much, much lower.

As I’ve mentioned in previous updates, Bitcoin can pull back significantly (as much as -40%) and still remain in a Bull Market Cycle, so these pullbacks don’t reduce my long-term bullish outlook on the sector. Selloffs in Bitcoin are always buying opportunities for me, not reasons for me to get bearish.

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.
  • In December, Bitcoin rallied +121% to a new all-time high of $108,388.88.

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.

Suicide Hotline – You Are Not Alone

Studies show that economic recessions cause an increase in suicide, especially when combined with thoughts of loneliness and anxiety. If you or someone you know are having thoughts of suicide or self-harm, please contact the National Suicide Prevention Lifeline by visiting www.suicidepreventionlifeline.org or calling 1-800-273-TALK. The hotline is open 24 hours a day, 7 days a week.