Summing Up The Week

Historically, the stock market moves up slightly into the end of the year in what’s called The Santa Claus Rally, a period that takes place in the last five trading days of the year and the first two of the next year. During this time, the market floats up on an average of 1-2%.

Last year was certainly exciting and broke with the history as we saw the worst Christmas Eve in the history of the stock market. (For a scary refresher on exactly how bad last year was, check out my Week in Review #18 released the Friday before with an ominous message warning it could get worse before it gets better)

This week was definitely quiet in comparison with last year, however, that doesn’t mean we didn’t have news. The country’s biggest exporter, Boeing (BA), fired its CEO! 

Market News

Boeing Fires CEO Dennis Muilenburg, Stock Pops on News

Typically, single-company stories don’t move the market, however when Boeing (BA), the biggest component of the Dow Jones Industrial Average (DJI), fired CEO Dennis Muilenburg on Monday, it was a big deal.

As everyone likely knows by this point, Boeing has been struggling since two tragic airline crashes within a 6-month timespan killed nearly 400 people resulted in the grounding (and eventual production halt) of the company’s best-selling model.

To make matters worse, CEO Dennis Muilenburg, historically an excellent CEO, bungled the ordeal in a cascade of events from reports that test pilots specifically called out the component responsible for the crashes as acting “wonky” before the plane’s initial certification to Muilenburg virtually taunting the Federal Aviation Administration (FAA) by repeatedly claiming that Boeing expected the 737-Max to be approved and in the air by the end of 2019.

Last week’s announcement that the company would be halting production altogether indefinitely must have been the final straw for Boeing’s board as they replaced Muilenberg with Chairman David Calhoun on Monday, reported CNBC.

And, to all the CEOs out there, know this – you can take it as verification that you’ve done a terrible job when your beleaguered company’s stock jumps nearly 3% on the news that you’re out. Yikes! 

Next Week’s Gameplan

Next week should be similar to this week with slight upward movement. Taking profits and making trading plans are really the only activities any investor should be doing right now – no buying.

The stock market is very overbought at this point, so there could be some serious profit-taking in January, however it’s likely not to start happening until after next week seeing as how we’ll still be in throes of the Santa Claus Rally timeline.

Feeling FOMO about the markets?
Rather than making an ill-advised move, consider learning how you can make money with your sidelined cash or work on your trading plan for the next sell-off.

Happy New Year, everybody! We’ll see you next decade! 😉

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

Bitcoin remained flat for the past week. Or did it? 

While analysts claim that Bitcoin’s price has remained relatively flat after making a new weekly high of $7688.99, keen readers of Get Irked may notice that Bitcoin’s low on Friday, December 27, bounced off the Support of Last Resort… exactly.

What does this mean?

Technical Analysis is, without question, more art than science. If we don’t see a break in Bitcoin’s price consolidation over the next week, then D-Day could be the weekend of January 4-5, 2020 when Bitcoin’s price will be forced through the support trendline.

At that point, it’s 50/50 whether Bitcoin will break Bullish or Bearish, however, it will likely be a big move whichever way it ends up going. 

Bitcoin Gameplan

It’s boring when nothing’s happening. And boring is dangerous. The hardest thing to do is to not force a trade. In cases of price consolidation like this, I just sit on my hands, tweak my buying and selling targets, and wait.

My position remains unchanged from last week with 6.96% of my total allocation and an average per-coin cost of $8,045.39 (down -10.64%).

Bitcoin Buying Targets

Here are my target buying quantities and prices from this point:

0.29% @ $6572
1.88% @ $5977
5.89% @ $5037
4.29% @ $4686
6.09% @ $4326
17.30% @ $3607
12.84% @ $2463
12.44% @ $2089
20.03% @ $1287

Bitcoin Selling Targets

Here are my target selling quantities and prices from this point:

7.29% @ $11,738 (+45.4%)    <– Key downward trendline
8.22% @ $13,265 (+64.4%)    <– Approaching 2019 High
12.83% @ $19,751 (+145%)  <– Approaching All-Time High (ATH)
71.65% @ $29,969 (+272%)  <– Ridiculous target at upper trend-line

While neither buying nor selling targets are set in stone, it’s far more likely that I’ll get stopped out before hitting my higher selling targets; it never hurts to dream, right? 😉

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 likely Bitcoin could bottom and rebound from that stage. The greater the pullback, 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 in order to practice conservative risk management, a requirement for the sector.

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 a drop of near -90% or a gain of up to +1000% or more), 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 $3128.89.
• In the first half of 2019, Bitcoin rebounded 343% from $3128.89 to $13,868.44.
• Since June 2019, Bitcoin has dropped -53.64% to a low of $6430.00 in December.

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

What if Bitcoin’s headed to zero?
The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero.

I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated only 1.8% of my assets to speculating in crypto.

I feel that anyone who doesn’t believe in the long-term viability of cryptocurrency would be better served not speculating in the space.

On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator.

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.