Summing Up The Week

The delayed November jobs report drove this week’s price action when investors learned the labor market may be weaker than even the Bears thought, losing 105,000 jobs in October and only making 64,000 new ones to replace them in November.

While there is a brief respite when the delayed inflation report for November showed the annual rate lower than expected, those hopes were quickly muddied when NY Fed President Williams said “technical factors” created a cooler-than-actual CPI report.

Let’s take a deeper dive into the news that moved markets this week…

Market News

Payrolls rose 64K in November but fell 105K in October

On Tuesday, we received the delayed November nonfarm payrolls report from the Bureau of Labor Statistics (BLS) showing the economy added 64,000 jobs in November, however there was a substantial fall of 105,000 in October, a net deficit of 41,000 jobs, reported CNBC. There’s no way to show this jobs report in a positive light, the economy is weakening.

To make matters worse, the unemployment rate to 4.6% in November – more than economists had expected – to the highest level in more than four years since September 2021. Additionally, a lesser-reviewed factor of discouraged workers and those holding part-time jobs for economic reasons jumped to 8.7%, its highest level since the peak in August 2021.

“The U.S. economy is in a jobs recession,” said Heather Long, Chief Economist at Navy Federal Credit Union. “The nation has added a mere 100,000 in the past six months. The bulk of those jobs were in healthcare, an industry that is almost always hiring due to America’s aging population.”

Despite the jobs report showing a weakening labor economy, pundits believe the Federal Reserve will actually take this report in stride and not change their outlook. “The Fed is unlikely to put much weight on today’s report given data disruptions,” said Kay Haigh, Global Co-Head of Fixed Income and Liquidity Solutions at Goldman Sachs Asset Management. “The report on December’s employment data, released in early January ahead of the next meeting, will likely be a much more meaningful indicator for the Fed when it comes to deciding the near-term policy trajectory.”

November inflation rose less-than-expected

On Thursday, the Consumer Price Index (CPI) for November showed prices increased at a 2.7% annualized rate, much less than estimates for a 3.1% increase from Dow Jones economists, reported CNBC. Core CPI – which removes food and energy prices that tend to be more volatile – showed an annual increase of just 2.6% versus expectations for 3.0%.

Thursday’s CPI report represented the first real read on inflation that investors have seen in months due to the prolonged U.S. Federal government shutdown, and a weak report indicates the Federal Reserve may have made the right move with last week’s rate cut.

“A tame CPI will reinforce the Fed is focused on protecting the employment market. And that means a Fed ‘put’ is now in place for the economy,” said Tom Lee, Head of Research at Fundstrat, in a note ahead of Thursday’s release. “In other words, if the Fed is concerned about downside risks to the economy, the Fed ‘put’ comes into play and this would be for stocks to rise.”

Lee was correct as markets – including Bitcoin and other cryptocurrency – rallied after the release of the report while Safe Haven assets like precious metals weakened slightly.

NY Fed President disputes cooler CPI report

On Friday, John Williams, President of the New York Federal Reserve Bank, called November’s inflation report “distorted,” reporting some “technical factors” that affected the report to the downside, reported CNBC. Williams’ comments threw cold water on the rally that stemmed from the Consumer Price Index’s (CPI) release on Thursday.

“There were some special factors of practical factors that really are related to the fact that they weren’t able to collect date in October and not in the first half of November. And because of that, I think the data were distorted in some of the categories, and that pushed down the CPI reading, probably by a tenth or so,” Williams said on CNBC’s  “Squawk Box.”

“It’s hard to know, we’ll get some when we’ll get to December date, I think we’ll get a better reading of how much that distortion, how big the effect was, but I do think that that was pushed down a bit by these technical facts,” he added.

While just one of 12 voting members on the FOMC, Williams’ opinion carries serious heft as the New York Fed is considered the flagship among the Fed’s various branches with a close eye on what’s representative of the U.S. economy on a wide scale. 

Next Week’s Gameplan

With next week’s Christmas holiday, the week will both be shortened and likely have significantly lower volume than a normal trading week. For the majority of history, Christmas weeks have been very uneventful, although there are a few examples (*cough* December 2018 *cough*) which were shockingly painful. I don’t anticipate next week to be one of those weeks, though.

Despite being a short week, we will receive some critical data on Tuesday in the form of Q3-GDP, durable-goods orders for October, and December’s consumer confidence survey. None of these should be true market-moving events, however a surprise either way could move stocks in the corresponding bullish or bearish direction.

And, yes, I will meet you back here last Friday to go over everything that happened throughout the week!

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Crytpo Corner

Bitcoin Price Action

The Bulls put up a good fight for Bitcoin but lost when the world’s largest crypto broke through last week’s low at $87,733.18 on Sunday and didn’t stop dropping until it found support on Monday at $85,129.63. The price action went bad from worse on Thursday when Monday’s low didn’t hold and Bitcoin sold off once more, making its weekly-low at $84,400.00, only a bit above key support at $83,800.00.

The lower weekly-lows reinforce the ongoing Bearish downward trend that Bitcoin continues to be stuck in, particularly with the anemic lower weekly-high set at $90,336.36 on Wednesday.

The Bullish Case

Bulls desperately cling to the thesis that since Bitcoin hasn’t broken below its low at $80,524.65, that there’s still time to turn around the Bearish downtrend. Despite the lack of any positive catalysts on the horizon, these Bulls continue to fight the fight that Bitcoin’s much, much, much longer trend is toward the upside and that’s only a matter of time before Bitcoin breaks out higher from here.

The Bearish Case

Bears continue to have the upper-hand. Both fundamentally and technically, there is nothing positive going on for Bitcoin right now. The downtrend remains incredibly strong, and, as you can see from the chart, Bitcoin remains distinctly below key exponential moving averages substantially below the 50-Day in orange, 100-Day in red, and 200-Day in black.

In fact, Bitcoin continues to have difficulty flipping the easiest of the moving averages – the 21-day – from resistance into support. Until this happens, there is no sign of a reversal in the ongoing Bearish 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.
• In January 2025, Bitcoin rallied +150% to a new all-time high of $109,358.01.
• In April, Bitcoin dropped -32% to a low of $74,420.69.
• In May, Bitcoin rallied +51% to a new all-time high of $112,000.00.
• In June, Bitcoin dropped -12% to a low of $98,247.01.
• In July, Bitcoin rallied +25% to a new all-time high of $123,231.07.
• In September, Bitcoin dropped -14% to a low of $107,250.00.
• In October, Bitcoin rallied +18% to a new all-time high of $126,296.00.
• In November, Bitcoin dropped -36% to a low of $80,524.65.

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.