Summing Up The Week

For a shortened trading week thanks to closed markets on Thanksgiving and a half-day on Friday, you’d think it would also be a slow news week.

From a new Democratic candidate for president to a new front in the trade war, it was anything but slow in stock market news this week.

Let’s take a look at the stories that moved the markets…

Market News

Bloomberg for President 2020?

Arguably the biggest news this week happened before the week even started when Mike Bloomberg announced his bid for the 2020 Democratic presidential nomination, reported CNBC on Sunday.

With a proven track record serving as the Mayor of New York City combined with years of success in the private sector led many pundits to believe Bloomberg not only has a significant chance of winning the nomination, but perhaps the presidency.

“Defeating Trump – and rebuilding America  – is the most urgent and important fight of our lives. And I’m going all in,” Bloomberg said in a news conference. “If [Trump] wins another term in office, we may never recover from the damage.”

In an interesting twist, Bloomberg News announced it will refrain from investigating both Mike Bloomberg as well as his Democratic rivals, reported CNBC on Sunday.

 “We will continue our tradition of not investigating Mike (and his family and foundation) and we will extend the same policy to his rivals in the Democratic primaries,” said Editor-in-Chief John Micklethwait in a memo to staff. “We cannot treat Mike’s democratic competitors differently from him.”

U.S. GDP Grew 2.1% in Third Quarter

The U.S. economy grew at a moderate 2.1% rate over the summer, slightly faster than first estimated, reported CNBC on Wednesday.

The news comes after the Commerce Department revised the July-September report, estimating the economy’s total output of goods and services slightly exceed its initial estimate of a 1.9% rate.

Economists estimate GDP growth is weakening to less than the 1% annual rate in the current quarter due to the U.S.-China trade war affecting business investment and inventory management.

U.S. Supports Hong Kong, China Throws Tantrum

On Wednesday, President Trump signed the Hong Kong Human Rights and Democracy Act of 2019 into law along with a second bill banning the sale of munitions like tear gas and rubber bullets to Hong Kong police, reported CNBC.

As any historian will tell you, the first rule of maintaining a communistic dictatorial regime is keeping your population in check by any means necessary, particularly tear gas and rubber bullets, so, naturally, China’s Ministry of Foreign Affairs said Thursday that it firmly opposes the U.S. signing of a bill into law that supports the Hong Kong protesters.

Ladies and gentlemen, start your engines…

China Threatens ‘Strong Counter-Measures’ over Hong Kong

On Friday, China’s Foreign Ministry threatened “strong counter-measures” over the bills passed by the U.S. Congress, reported CNBC.

However, the Foreign Ministry did not specify what, exactly, those counter-measures would be. Investors and analysts expressed concern that the signing of these bills supporting Hong Kong’s protesters will complicate trade deal negotiations.

Given the repeated unpredictability of the trade negotiations at this point, only time will tell what happens from here.

Next Week’s Gameplan

The market continues to make all-time highs. At this point, I have almost no buying targets within range, instead preferring to take profits as we reach higher and higher levels.

If the indexes continue their current trajectories higher without at least a garden-variety 1-5% pullback, the next time the markets pull back, it could be a doozy.

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

If you only check in once a week, Bitcoin’s price action might appear pretty positive since we’re up +6.44% over the week, however, if you review the day-to-day charts you’ll see that Bitcoin attempted to crash through the Support of Last Resort, making a low of $6526.00 just four short days ago on Monday, Nov 25. 

As has been the case for the past several weeks, Friday is the day for action when, last Friday, Bitcoin saw a nearly 14% price swing between its daily high of $7720 and its new low at the trend line named the Support of Last Resort by Get Irked, so-named because the it creates a line of support from Bitcoin’s 2018 low of $3128.89 and its first Coinbase all-time low of $109.87 on Jan 14, 2015.

Since last Friday, Bitcoin has performed a very admirable bounce, rocketing 20% up from its $6526 low to create a weekly high of $7870.10 just this morning, yet another substantial Friday move. Does crypto experience TGIF?

As always, Bitcoin only has three scenarios from here:

Bitcoin’s Bullish Scenario
Bitcoin will continue its upward momentum, perhaps trying to hit a high around the Line That Shall Not Be Crossed (a trendline that connects to Bitcoin’s all-time high in December 2018).

Bitcoin’s Bearish Scenario
Following such a substantive bounce from its low, Bitcoin has cooled off its oversold status which gives Bears more ammunition if they decide to push it down from here. If Bitcoin breaks its $6526 low, significantly downward momentum is likely since that trend line has offered consistently strong support to this point..

Bitcoin’s Indecisive Scenario
With its new high of $7818.89 and its new low of $6526, Bitcoin’s price action may simply consolidate between these two points indefinitely, waiting for a catalyst to cause a break in its new range.

Bitcoin Gameplan

Over the past week, I added a total of 0.90% to my position divided into buys at $6963, $6839 and $6547. I currently hold 6.13% of my desired allocation at a per-coin price of $8199.77, a price reduction of -3.50% from last week’s $8496.90.

Below are my buying quantities and targets from this point.

You may notice some significant plan changes since last week. In addition to my own Technical Analysis, an analyst I have faith in painted a new doomsday scenario where Bitcoin could potentially crash to below $1000.

While I think the scenario is incredibly unlikely, I do want to account for its potential so I’m allocating some of my position to capitalize at that level, however unlikely reaching it may be:

0.35% @ $6672
2.57% @ $5288
3.94% @ $4536
8.93% @ $3517
6.24% @ $3190
13.41% @ $2537
15.38% @ $2187
28.03% @ $1786
15.01% @ $1017

Why the differing quantities at each level instead of a flat percentage?
Rather than buying an equal percentage, I change my buying quantity at each stage as a reflection of how possible I feel it is that Bitcoin could bottom and rebound from each point. The more Bitcoin pulls back, the more likely a rebound becomes. Therefore, higher price points have a lesser likelihood of rebounding than lower price points and deserve a smaller quantity buy.

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 (sometimes near -90% or up 1000%), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are just a few recent price movements over the past couple of years:

• Bitcoin rose 2,707% from its January 2017 low of $734.64 to make an all-time high of $19,891.99 in December of the same year.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.
• In the first half of 2019, Bitcoin rebounded 343% from $3128.89 to $13,868.44.
• Since June 2019, Bitcoin has dropped -52.94% to a low of $6526.

 Where will Bitcoin go from here? Truly, anything is possible.

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.