Summing Up The Week

Positive economic reports combined with positive quarterly earnings from companies to result in all-new highs on the S&P 500, Dow Jones Industrial Average, and NASDAQ indexes this week.

With the potential of a Phase One U.S.-China Trade Deal combined with not-as-bad-as-feared economic data, many analysts calling for a recession are scrambling to reposition their portfolios in light of the unexpected rally in the markets.

However, with the he-said, Xi-said action between Trump and China where both parties continually change their minds and flip-flop their actions, predicting the volatility is tricky, to say the least.

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

Market News

Non-Manufacturing Index Tops Estimates

The ISM non-manufacturing index – a reading of the U.S. economy’s services sector – topped estimates for the month of October, reported CNBC on Tuesday.

Economists polled by Dow Jones expected 53.5 and the index came in higher at 54.7.

Given that the manufacturing sector is experiencing a slowdown, Tuesday’s services report reassured investors as any weakness in other areas of the market could indicate a potential selloff in the markets.

With weak manufacturing data, economists point to the services sector and the strong U.S. consumer as the main reasons for the market’s rally in October.

Will They? Won’t They? Unease Over Trump-Xi Meeting

The markets sold off slightly and became skittish on Wednesday following reports that President Trump and President Xi may not meet to sign Phase One of the Trade Deal until December, reported CNBC.

With stocks at record highs, any bit of bad news can cause an upset, and reports implying that there has been a lot of difficulty deciding on a location for the two world leaders to meet caused the markets some concern.

Analysts suggest that the longer the wait until the deal is signed, the greater the possibility of something going wrong.

Tariff Tantrum! What’s Going On?!

Concerns over a signing location for Phase One of the U.S.-China Trade Agreement were alleviated when China said it has agreed to cancel existing trade tariffs in phases on Thursday, reported CNBC.

China’s Commerce Ministry announced that both China and the U.S. agreed to simultaneously cancel some existing tariffs on one another’s goods. Gao Feng, the ministry’s spokesperson, insisted that an important condition was for both countries to remove the same amount of charges at the same time.

The announcement renewed hopes for a phase one trade agreement and caused the markets to rally Thursday morning.

However, on Friday, Trump announced that he has not agreed to roll back tariffs on China, reported CNBC. Naturally, the markets did not take the news kindly and sold off accordingly during Friday trading.

Next Week’s Gameplan

The stock market is always unpredictable, but 2019 has been downright crazy.

Being a contrarian seems to be the path of the herd as I’ve heard from many people that they’re waiting on the sidelines for the next big dump in prices. However, with “recession” being the rallying-cry for bears all year long, the market continues to defy all expectations by repeatedly rallying to record all-time highs with no retest of last December’s lows in sight.

For me, while I do keep an eye on the macro conditions to get a feel for the general market dynamic, I find focusing on the stocks of quality companies and making sure to add into weakness and sell into strength to be a consistent approach.

Who knows what next week will bring, but I’m going to keep on keepin’ on.

This Week in Play

Stay tuned for this week’s episodes of my two portfolios Investments in Play and Speculation 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

Why I don’t “HODL

Last week, a few readers asked why I closed out my position with an average selling price of $9485 instead of holding (or “hodling”) out for higher levels. The volatility in the cryptocurrency space is out of this world. In order to survive its many peaks and valleys, I’ve learned that I need to take profits when I have them.

This week’s price action is proof of the effectiveness of that strategy:

After spending the past few weeks consolidating after its nearly-historic run from the $7300 range to set a high of $10540.49 back on October 26, Bitcoin’s bottom fell out earlier this morning, Friday, November 8, 2019 with the crypto crashing through $9000 before finding support at the $8600 level.

Since Bitcoin’s 50% collapse last year (2018) happened around the same time in November, some analysts are suggesting that November is a seasonally bad time for Bitcoin. Personally, I don’t think there’s any seasonality to cryptocurrency – it’s just luck of the draw when a drop or pop will occur.

Even following this morning’s drop, there is still a significant amount of strength remaining in the Daily Relative Strength Indicator (RSI) which implies that today’s drop could be just the beginning of another significant downturn with a possible re-test of the $7296.44 low made on October 23. 

If the recent $7300 low doesn’t hold, well… look out below. 

Bitcoin Gameplan

Since Bitcoin rocketed so dramatically from $7300 in late October, I have no trouble believing that it could collapse in price just as quickly so I’m eyeing much lower levels before I add to my current position.

Right now, I hold just 1.69% of my target allocation with a per-coin price of $9305.89.

I plan to add to it at the following levels:

1.51% @ $8073
2.25% @ $7388
2.25% @ $6677
2.25% @ $6016
3.55% @ $4806
8.5% @ $3817
14.0% @ $3018
16.25% @ $2609
16.25% @ $1878
31.5% @ $1418

In the meantime, keep calm and HODL on?

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.

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