Summing Up The Week

The week provided a wealth of news events from Iran sanctions to consumer confidence reports and company-specific shockers from market-movers like Boeing (BA) and Apple (AAPL).

However, none of that matters as long as the G-20 Summit is on the horizon and the possibility of news regarding the U.S.-China Trade War is incoming.

Overall, the markets traded fairly smoothly this week, leading to the best June in more than 50 years (the best for the Dow since 1938!) and the best first-half of a year in more than 20 years.

Let’s look at this week’s news stories…

Market News

U.S. to Increase Sanctions on Iran

The Trump Administration isn’t one to stand on historical precedent, once again made evident when, on Saturday morning – an historically atypical day for non-emergency news announcements – a U.S. Special representative told CNBC that the U.S. will increase sanctions on Iran in retaliation for the drone strike last week.

Heightened tension in the middle east is never a good thing for the stock market, so we expected to see a bit of a selloff going into the week, especially following last week’s epic rally from hopes of an interest rate cut by the Fed. However, the markets more or less shrugged off the sanctions news, focusing on the week’s upcoming G-20 summit instead.

Consumer Confidence Lowest in Two Years

Despite the Fed’s comments about concerns over a weakening economy, the market seemed caught off-guard and sold off when June’s update to the consumer confidence index disappointed expectations, reaching its lowest point in almost two years, reported CNBC on Tuesday.

The U.S. economy relies on consumer spending for much of its growth, so when consumers show signs of reducing their spending, traders get nervous and sell their positions. Knee-jerk reactions, anyone?

China Press reports an Trade Deal Offer is Coming

Chinese press released stories stating that President Xi Jinping is expected to present a deal to Trump in the upcoming meeting on Saturday, reported CNBC on Thursday morning. Naturally, positive movement in trade talks caused market futures to rise slightly on the report before the market opened Thursday.

Boeing Issue drags down Dow Jones Average

Boeing (BA), the airline manufacturer, reported a new issue with 737 Max software causing the entire Dow Jones Industrial Average (DJIA) before the market opened on Thursday, reported CNBC.

The new issue, unrelated to the alleged cause of the two plane crashes in the past year, resulted in Boeing stocks to drop 20% during premarket trading with the timeline of the 737 Max’s return to service once again called into question as Boeing currently has no estimate for how long this new issue will take to remedy.

Jony Ive leaves Apple and with Him Goes All Hope…?

Jony Ive, Apple’s chief designer responsible for the look of all “i” devices from the original 1998 iMac to the iPhone and iPad, announced he would be leaving Apple  to start his own company, CNBC reported on Thursday.

Apple’s stock dropped 1% in after-hours trading following the announcement. Does Ive’s departure signify the end of Apple’s prominent reputation as the leader of industrial design, or does it leave an opening for Apple’s next era of revolutionary design?

Only time will tell…

Next Week’s Gameplan

Despite the wealth of news this week, it’s all about the G-20 summit and the results of the meeting between Trump and President Xi. What happens there will determine what happens next week.

When you don’t know what to do, the best thing to do is nothing at all.

This Week in Play

Stay tuned for this week’s episodes of our Investments in Play and Trades in Play coming online later this weekend! 

Crytpo Corner

Important Disclaimer

Get Irked contributors are not professional advisers. Discussions of positions should not be taken as recommendations to buy or sell. All investments carry risk and all readers must accept their own risks. Get Irked recommends anyone interested in investing or trading any asset class consult with a professional investment adviser to determine if an investment idea is suitable to them and their investment goals.

Bitcoin Price (in USD)


Weekly Change

Bitcoin Price Action

Bitcoin positively exploded to the upside on Wednesday, rocketing to a new 2019 high of $13,868.44 – a gain in excess of 40% from last week – in a matter of hours before almost immediately experiencing its first major pullback in 41 days of slightly more than 18%.

The selloff continued in earnest on Thursday with a fast selloff hitting a low of $10,330 before Bitcoin caught its footing, for the moment, rebounding from $10,330.00 to the mid-$11,000 range.

The total selloff amount in less than 24 hours?  -25.5%.

Welcome back, Bitcoin, you dirty bastard. Welcome back.

Bitcoin Gameplan

While pullbacks of 30% were typical in 2017’s Bull Market, we noted last week that the current bull move in Bitcoin is unlike any that have come before with this week’s selloff being the first significant pullback in weeks

We’ve reviewed Bitcoin’s historical price action and have noted several pullbacks of nearly 50% in a just a few days repeatedly over Bitcoin’s life cycle.

While we don’t put a whole lot of credence in Elliot Wave Theory – the theory suggests market moves happen in five different “wave” movements – many analysts who do practice the strategy propose that Bitcoin has not bottomed, and that its next major pullback will cause Bitcoin to drop substantially below its $3,128.89 low.

Due to the extremity of this potential loss of value, our trading plan takes all possible outcomes into account, including the possibility of Bitcoin dropping substantially below December 2017’s lows. An 80% pullback (not unusual in the space) from its recent high of $13,868.44 represents a new 2018-2019 potential low of $2,773.68.

As always, trading or investing in the crypto sector is wildly speculative and the possibility of a significant loss of investment capital is very real – do so at your own risk.

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