Summing Up The Week

The market seems to have broken its pattern of crashing immediately following incremental all-time highs as all the indexes continued to head higher this week, making new all-time high after new all-time high.

This newfound strength was only made even stronger when Bank of America Merrill Lynch’s survey found that many underpositioned investors now possess incredible fear of missing out.

Check out that story and more in the news that moved the markets this week…

Market News

Survey Says: FOMO is Worse Than Recession

Bank of America Merrill Lynch’s (BAC) survey of global fund managers shows most investors have swapped “fear of missing out” or FOMO for fears of recession, reported CNBC on Tuesday.

The market’s rally over recent weeks has left many investors with too much cash on the sidelines and no exposure to the upward swing meaning many of them are now putting cash back to work, further accelerating the upside growth.

“The bulls are back… global recession concerns vanish and ‘Fear of Missing Out’ prompts waves of optimism and jump in exposure to equities & cyclicals,” wrote Michael Hartnett, chief investment strategist at B of A, in a note to clients.

Trump: Everything is Fault of Fed & Past Presidents

During a speech to the Economic Club of New York on Tuesday, President Trump blamed the Federal Reserve Bank and poor trade approaches with China made by past presidents for the current economic weakness, reported CNBC.

Trump used the opportuntiy to bash the Fed, “If we had a Federal Reserve that worked with us, you could have added another 25% [to the markets],” he said. “But we all make mistakes, don’t we?”

Trump renewed his trade attack on China by calling the nation “cheaters” while blaming the situation on past U.S. leaders. 

Kudlow: China Deal Getting Close

The markets rose on Friday after White House economic advisor Larry Kudlow said China and the U.S. are getting close to reaching a trade deal, reported CNBC.

On Thursday, Kudlow claimed a deal between the two nations is approaching despite comments made earlier in the week by other officials suggested a logjam was holding up the phase one agreement.

At this point, trade news feels more akin to Charlie Brown playing football with Lucy, every time the deal feels close, either country pulls away the deal.

Impeachment Hearings Not Heard On Wall Street?

Despite ongoing impeachment hearings creating political rumblings throughout the past few weeks, news reports about impeachment appear to have no impact on Wall Street with the markets not reacting to any news.

The markets showed no reaction even on Friday when President Trump attacked former U.S. Ambassador to Ukraine Marie Yovanovitch on Twitter as she testified, reported CNBC.

Later on Friday, Roger Stone, a Trump ally, was found guilty of lying to Congress and witness tampering by a jury in U.S. District Court, reported CNBC.

While this may seem odd, historically, this behavior is exactly how the markets react. The markets were volatile in the late 1990s heading into President Bill Clinton’s impeachment hearings, however, the hearings themselves had little to no impact, even when Clinton was finally impeached.

Next Week’s Gameplan

As markets make new all-time highs, the herd gets excited with many investors on the sidelines piling into stocks. For me, this is not the time to buy, rather it’s now the time to sell and take profits.

While I do remain long-term bullish with so many catalysts on the horizon which could potentially elevate the markets further, the entire market is in overbought conditions, so I’m eyeing positions for profit-taking far more than positions to add to (except on the rare case-by-case basis, of course).

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

Bitcoin Price Action

The past week was a bit of a Bear Beatdown for Bitcoin with the Bears stifling any bullish price action and working hard to keep the price of the cryptocurrency down.

Friday seems to be the day for action, however, as the Bears finally broke through the week’s prior low of $8556.56 to create a new weekly low at $8361.00 earlier on Friday just like last week’s Friday selloff.

If the new low doesn’t hold it’s likely that Bitcoin may test its monthly low of $7296.44 set back on October 23. If it breaks through, the next point of support may be the “Support of Last Resort” trendline around $6500.

Bitcoin Gameplan

I’ve been slowly adding to my position as Bitcoin shows levels of support. I currently hold 3.92% of my overall desired allocation with a per-coin cost of $8970.61. Given that Bitcoin seems to be intent on weakening, not stronger, I’m anticipating adding more in the near future.

My buying quantities and target prices are as follows:

• 1.12% @ $7956.33
• 2.24% @ $7418.23
• 2.24% @ $6034.16
• 4.49% @ 4844.25
• 9.10% @ $3816.60
• 14.79% @ $3019.16
• 15.78% @ $2608.66
• 17.07% @ $1879.18
• 33.17% @ $1467.29

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.